Petro-Victory Vitality Corp. stated it has signed a binding memorandum of understanding (MoU) underneath which Brazilian vitality agency Azevedo & Travassos Energia S.A. (ATE) will purchase all of its issued and excellent frequent shares in an arm’s size enterprise mixture.
The transaction is meant to mix the companies and property of the 2 firms, leading to Petro-Victory changing into an entirely owned subsidiary of ATE, with the present shareholders of Petro-Victory changing into shareholders of ATE.
The mix is predicted to “enhance shareholder worth by way of the event of ATE’s progress technique with the supplementation of the corporate’s diversified portfolio of manufacturing and exploration property,” Petro-Victory stated in a information launch.
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Underneath the transaction, ATE will full a personal placement of round 205,5 million models at a problem value of $0.13 (BRL 0.73) per unit for gross proceeds of round $27.7 million (BRL 150 million).
ATE will then buy 100% of the issued and excellent Petro-Victory shares and can challenge 266 million shares at $0.13 (BRL 0.73) per share, supplied proportionately to the shareholders of Petro-Victory, in keeping with the discharge.
Additional, ATE will assume all excellent debt of the corporate, with the estimated enterprise worth of the transaction being roughly $39.5 million, together with internet debt and earlier than contemplating any valuation for contingent funds.
As a part of the transaction, Petro-Victory shareholders of file at closing might be entitled to a gross overriding royalty (GORR) of 10 % on the gross income from all new manufacturing arising from fields that exist already within the concessions owned by the corporate previous to the MoU or that might be created after the date of the MoU within the concessions owned by the corporate.
The royalty exempts the manufacturing of the reservoirs of the São João Area which are the topic of a partnership between Petro-Victory and Eneva S.A.
The GORR will apply for 15 years from the beginning of its business manufacturing or, for current fields which are already in manufacturing, from the time limit, Petro-Victory stated.
The transaction is topic to plenty of situations precedent, together with the completion of the non-public placement on or earlier than July 12, topic to a 30-day extension on the sole discretion of ATE.
The 2 events will conduct customary due diligence and count on to barter and execute a definitive settlement on or earlier than 120 days from the date of the completion of the non-public placement, in keeping with the discharge.
If the transaction is accomplished, Petro-Victory stated it plans to delist from the TSX Enterprise Alternate because the acquisition will trigger the corporate to now not meet the change’s itemizing necessities.
Andorinha Area Drilling Profitable
In the meantime, Petro-Victory stated that it efficiently concluded the drilling operations for the AND-5 properly within the Andorinha Area, positioned in Brazil’s Potiguar Basin, in partnership with ATE.
Drilling reached a complete depth of 3822 toes (1,165 meters) by way of sedimentary and basement rock layers. The operation utilized the Drake-2 onshore hydraulic rig, with wireline logging by Halliburton, Petro-Victory stated in a separate assertion.
Primarily based on standard petrophysical analysis, making use of a salinity cut-off of three,500 ppm, 42.7 toes (13 meters) of internet pay had been recognized, distributed throughout 4 oil-bearing intervals. The technical crew is constant detailed evaluation of the acquired logs and related information, the corporate stated.
Petro-Victory stated it plans to mobilize an onshore completion rig, aiming to amass particular saturation logs to extra precisely characterize the productive intervals. Subsequently, properly testing and completion operations might be carried out to organize the properly for manufacturing, adopted by tie-in to the Andorinha Assortment Station, the corporate stated.
To contact the writer, electronic mail rocky.teodoro@rigzone.com
