#Brazil #Petro-Victory Energy #BlueOak Investments #Capixaba Energia #Espírito Santo

Introduction

Petro-Victory Energy Corp. has taken a bold step in expanding its operations within Brazil's oil and gas industry by partnering with BlueOak Investments. Their recent agreement to acquire Capixaba Energia, a significant player in Brazil's onshore production landscape, is anticipated to create a strategic hub for growth, further emphasizing the potential of the Espírito Santo Basin.

The Acquisition Overview

On March 6, 2025, Petro-Victory Energy Corp. (TSXV: VRY) and BlueOak Investments announced their sale and purchase agreement to acquire Capixaba Energia LTDA. This acquisition is valued at USD $17.5 million (BRL $105 million) and is projected to close in the second quarter of 2025. The deal is crucial as it positions both companies strategically to enhance their operations and market presence in Brazil’s onshore oil sector.

Key Highlights of Capixaba Energia

• - Financial Strength: Capixaba Energia boasts a strong cash flow and owns pivotal infrastructure assets, making it an attractive target for acquisition.
• - Oil Fields and Exploration: The acquisition involves four productive oil fields located in the Espírito Santo Basin, including the Lagoa Parda Cluster, alongside two exploration blocks that are strategically situated next to significant producers in the region.
• - Potential for Production Growth: Currently, Capixaba Energia produces approximately 400 barrels of oil equivalent per day (boe/d), with plans to significantly increase production in the next 12-18 months through targeted workovers and drilling campaigns focused on proven reserves.

Strategic Partnership and Joint Venture Agreement

Following their earlier announcement of a partnership on January 7, 2025, Petro-Victory and BlueOak formalized their agreement with the execution of a Joint Venture Agreement (JVA) on February 28, 2025. Under this JVA, BlueOak will wholly fund the acquisition and assume a controlling position, while Petro-Victory will operate the assets. This structure allows Petro-Victory to commence with a nominal equity stake that will grow to a significant position as various operational thresholds are met, without requiring any additional capital input from the company.

Leadership Perspectives

Richard F. Gonzalez, the CEO of Petro-Victory, expressed his enthusiasm about this acquisition, describing it as a pivotal moment for the company. "This acquisition not only marks our first collaboration with BlueOak but serves to solidify our production base in Espírito Santo, enhancing our operational capabilities in Brazil," he stated.

Meton Morais, CEO of BlueOak, highlighted the investment’s significance in the Brazilian energy market, noting the favorable conditions for onshore asset consolidation. He believes that their strategic engagement will drive growth and foster operational excellence while ensuring disciplined capital deployment.

Operational Strategy and Market Insights

Petro-Victory's prior engagements in the Lagoa Parda Cluster have equipped them with valuable technical expertise and insights into Brazil's oil and gas market. Moving forward, their operational strategy aims to leverage this knowledge to maximize production capabilities, enhance recovery rates, and reduce operational costs effectively.

The acquisition is particularly timely, given the current landscape where opportunities for onshore investment in Brazil are expanding. BlueOak’s extensive background in the region adds confidence in the successful execution of this acquisition and the overall operational strategy.

Reserves and Production Certification

Capixaba Energia is backed by a certified reserve report dated December 31, 2019, provided by GLJ. They are set to undertake a new evaluation by an independent reserves evaluator, which could reveal even higher certified reserves. Historically, the fields have already yielded 38,000 Mbbl, showing a promising potential for future production.

Conclusion

In light of this acquisition, Petro-Victory Energy Corp. and BlueOak Investments are poised to significantly impact Brazil's oil landscape through strategic growth and operational excellence. As they embark on this venture, their combined expertise and resources aim to unlock the tremendous potential of Capixaba Energia, ultimately driving long-term value and growth in their respective businesses. The deal represents an essential evolution in their operational footprint in Brazil, promising a bright future in the energy sector.