Petro-Victory Energy Expands Operations with New Oil Field Acquisition in Brazil

Petro-Victory Energy's Major Acquisition in Brazil

Petro-Victory Energy Corp., listed on the TSX Venture Exchange as VRY, recently made headlines with its announcement regarding the acquisition of 13 oil fields situated in the Potiguar Basin, a key oil-producing region in Rio Grande do Norte, Brazil. This strategic decision follows the execution of a Sale Purchase Agreement (SPA) in collaboration with Azevedo Travassos Petroleo (ATP), marking a significant milestone for the company.

Highlights of the Acquisition

These new oil fields, including Polo Porto Carão and Polo Barrinha, encompass a total area of 38,301 acres and are fully operational. Currently, these fields boast a combined production capability of 250 barrels of oil per day. Petro-Victory's acquisition is set to boost this number significantly through an aggressive work program aimed at enhancing production levels. The total acquisition cost stands at USD $15 million, with Petro-Victory responsible for netting USD $7.5 million of that, payable in structured tranches—beginning with a USD $600,000 payment upon signing.

According to the National Agency of Petroleum's report, these fields have an estimated volume of oil in place of about 125 million barrels, with a recovery factor of 13.3%. This acquisition is not merely a growth tactic; it is expected to increase Petro-Victory’s proven reserves by roughly 50%.

Strategic Rationale

By acquiring these fields, Petro-Victory aims to create significant shareholder value in line with its strategy of investing in high-impact, low-risk assets in Latin America. With this acquisition, Petro-Victory consolidates its position in the Potiguar Basin, enhancing an already impressive portfolio that includes three oil-producing fields and an additional 34 exploration blocks within the same basin.

Petro-Victory has invested heavily in reprocessing 3D seismic data and conducting detailed reservoir analysis in this prolific area. The company aims to leverage the expertise developed over the last five years to maximize the oil production potential in these newly acquired fields.

Financial and Operational Growth

The immediate operational impact is substantial; the acquisition adds 125 barrels of oil per day to Petro-Victory's existing output. Furthermore, cash generation linked to oil production will be transferred upon the signing of the deal, enhancing cash flow as the deal reaches closure.

The operational infrastructure included in the acquisition scales from production stations, storage tanks, to advanced pumps, all aimed at improving efficiency. Notably, the integration of the new fields will enable shared resources with existing facilities, driving down overall operational costs through logistics streamlining and service sharing. This move enhances the company’s negotiating power with suppliers, further optimizing their cost structure.

Future Production Enhancements

Petro-Victory has outlined a comprehensive work program tailored to maximize oil extraction and minimize costs. Plans include reactivating inactive wells, implementing advanced wellbore diagnostics, and utilizing secondary recovery techniques to enhancing production rates. These strategic initiatives are anticipated to further solidify Petro-Victory's position as a leader in the Brazilian oil sector.

The transaction is anticipated to be completed in the second half of 2025, pending the requisite regulatory approvals from the National Agency of Petroleum in Brazil.

Conclusion

In conclusion, Petro-Victory's acquisition of the oil fields in the Potiguar Basin signifies a transformative step forward, promising enhancements in both production capacity and shareholder value. As Brazil remains a focal point for oil exploration and production, Petro-Victory Energy stands poised to capitalize on the burgeoning opportunities within this critical market. This acquisition not only expands their operational footprint in Brazil but also reinforces their commitment to responsible energy production and sustainability in the region.