GeoPark announces strategic entry to Brazil

Latin American oil and gas explorer GeoPark has announced its strategic entry into Brazil with the acquisition of a 10 per cent working interest in the offshore Manati gas field.

Latin American oil and gas explorer GeoPark has announced its strategic entry into Brazil with the acquisition of a 10 per cent working interest in the offshore Manati gas field.

On May 14th, GeoPark executed a stock purchase agreement with Panoro Energy do Brasil, the subsidiary of Panoro Energy ASA, a Norwegian listed company with assets in Brazil and Africa. This agreement was to acquire all of the issued and outstanding shares of its wholly-owned Brazilian subsidiary, Rio das Contas Produtora de Petrleo, the direct owner of 10% of the BCAM-40 block, which includes the shallow-depth offshore Manati Field in the Camamu-Almada basin.

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The Manati Field is an upstream asset in Brazil and currently provides approximately 50% of the gas supplied to the northeastern region of Brazil and more than 75% of the gas supplied to Salvador, the largest city and capital of the northeastern state of Bahia.

It is operated by Petrobras with a 35% working interest. Other partners in the block include Queiroz Galvao Exploracao e Producao with a 45% working interest and Brasoil Manati Exploracao Petrolifera S.A. with a 10% working interest, GeoPark added.

GeoPark reported that it had agreed to pay a cash consideration of $140m at closing, which would be adjusted for working capital with an effective date of April 30th, 2013.

It said that the consideration was expected to be funded from existing cash resources and the agreement also provided for possible future contingent payments by GeoPark over the next five years, depending on the economic performance and cash generation of the block, the company added.

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In the year to December 31st, 2012 Rio das Contas generated audited revenues of approximately $45.9m, EBITDA (earnings before interest, tax, depreciation and amortisation) of approximately $37.2m and net income of approximately $23.2m.

Net production to Rio das Contas during fiscal year 2012 and first quarter 2013 averaged 3,686 barrels of oil equivalent per day (boepd) and 4,140 (boepd) respectively.

GeoPark said that the acquisition of the Manati Field would provide it with a solid foundational platform in Brazil to support future growth and expansion in the country which it described as "one of the world's most attractive hydrocarbon regions"."

James Park, Chief Executive Officer of GeoPark, said: "This attractive acquisition represents an important development in our consistent and long term business plan to build a large scale risk-balanced oil and gas asset portfolio throughout Latin America."

GeoPark's share price was up 0.87% to 580p at 13:19 on Wednesday.




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