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.

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.

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.

MF

Recommended

Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022
Invest in VCTs: tax-free investments set to break records
Investment strategy

Invest in VCTs: tax-free investments set to break records

Generous tax breaks make VCTs – venture capital funds – an attractive supplement to pensions.
21 Jan 2022
HubSpot: a tech stock set to tumble
Trading

HubSpot: a tech stock set to tumble

US tech stocks have had a fantastic couple of years. But this year is unlikely to be so bullish for high-fliers that can’t turn big profits.
18 Jan 2022

Most Popular

Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022
Interest rates might rise faster than expected – what does that mean for your money?
Global Economy

Interest rates might rise faster than expected – what does that mean for your money?

The idea that the US Federal Reserve could raise interest rates much earlier than anticipated has upset the markets. John Stepek explains why, and wha…
6 Jan 2022