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March 30, 2020 /CNW/ - Petro-Victory
Energy Corp. (TSX-V: VRY) ("Petro-Victory"
or "Company") is pleased to provide the market with
a drilling and operational update across the Company's portfolio of
assets in Brazil.
Exploration Well (Vida) Currently Drilling
The Company is pleased to announce that it commenced the
drilling of the 1-VID-1-ES (Vida) exploration well located in Block
ES-T-487 Espírito Santo Basin, Brazil. The wholly owned Petro-Victory Energy
subsidiary, Petro-Victory Energia, Ltda., has a 50% working
interest in the block following the acquisition of five (5)
exploration concessions located in Espirito
Santo, previously announced October
26, 2018. Imetame Energia, Ltda. is 50% working interest
partner and operator in the project.
The Vida well will be drilled to a total depth of 1,800m and will target prospective sandstone
reservoirs in the São Mateus Formation. Petro-Victory internal
mapping and volumetrics estimate the mean recoverable resources of
the Vida prospect to be 855,000 BO. Over 2.5MMBO of prospective
resources are mapped within the proximity of Vida. Upon
reaching total depth of 1,800 meters, the Vida well will be
suspended, and the drilling rig will be demobilized in order to
move in a workover rig to test the well.
Preliminary results of the Vida well are expected within the
next thirty days. On reaching total depth, Petro-Victory will
obtain wireline and pressure/fluid samples over the target
intervals. The AFE of the Vida well is US$1.86MM (US$0.93MM net to the Company) and will be funded
from the Company's previously announced financing facilities.
Upon successful completion, the Company projects ongoing OPEX to be
in the US$10-12 per BO range,
generating positive cash flow and profitable netbacks in the
current price environment.
Oil Sales, Pricing, Production
Following the recent market volatility related to the ongoing
COVID-19 pandemic and increased global crude oil supply,
Petro-Victory is encouraged by the strong oil sales seen in
Brazil, particularly for the
Company's producing fields Carapitanga and Andorinha. Oil sales at
Carapitanga and Andorinha are currently trading at a US$10+ premium
to Brent pricing, with recent sales to an industrial buyer in March
at US$38 per barrel. With low base
OPEX costs and 5% - 10% royalty rates, the fields are able to
generate positive cash netbacks in the current pricing
environment.
Production in the first quarter has averaged approximately 24
BOPD net to Petro-Victory, from four mature wells, three in
Andorinha and one in Carapitanga. The Company is applying for
environmental permits for future development well locations and
workovers with the intent of achieving 1,000 BOPD of production by
Q4 2021. All future CAPEX spending will be based on
generating positive cash flow and netbacks at $25 Brent oil pricing.
Lagoa Parda, Lagoa Parda Norte, and Lagoa Piabanha
Acquisition
The previously announced transaction to acquire a 50% of Imetame
Energia Lagoa Parda, Ltda. is awaiting final Agencia Nacional do
Petroleo Gas Natural e Biocombustiveis of Brazil ("ANP") approval which is expected
later this year.
Permanent Offer Acquisition
Following the announcement of the successful participation and
bidding in the ANP Oferta Permanente 1 ("Permanent Offer Round 1")
held in Rio de Janeiro, Brazil on
September 10 2019, the Company is
pleased to confirm that the acquisition is expected to close in
Summer 2020. Petro-Victory is transferring the remaining technical
data onto its database to evaluate, map, and rank development,
appraisal, and exploration opportunities across the licenses.
Sao Joao Oil Field
Through its 50% net working interest operating partner, Oeste de
Canoas, Ltda., the Company has contracted a workover rig for the
Sao Joao field in order to conduct production testing on SJ-01,
SJ-06, and SJ-11 with the intention of declaring commerciality in
Q2 2020.
The Sao Joao oil field produced 87,500 BO between 1984-1988 from
four wells. The Company plans to re-enter 3 of these wells and
complete them for commercial production. On completion of the
production tests, an update will be given on production forecasts
and expectations.
Management Comments
Richard F. Gonzalez, Chief
Executive Officer of Petro-Victory commented, "First and foremost,
our thoughts and prayers go out to all the people of the world who
have been affected by COVID-19. These are certainly challenging
times for us all."
"We have an exceptional portfolio of premium, low production
cost assets that are well positioned to generate positive cash flow
in the current low-price environment. We also continue to actively
pursue value-accretive acquisitions of high-quality production and
development assets in Brazil
capable of delivering positive cash flows and shareholder
returns."
About Petro-Victory Energy Corp.
Petro-Victory Energy Corp. is engaged in the acquisition,
development, and production of crude oil and natural gas resources
in Brazil. The company is a
certified onshore and shallow water operator in Brazil and holds working interests in
twenty-eight (28) licenses totaling 168,433 acres in four (4) oil
producing basins in Brazil, and a
royalty agreement in a 2-million-acre concession in Paraguay. Petro-Victory generates accretive
shareholder value through disciplined investments in high impact,
low risk assets. The Company's Common Shares trade on the TSX
Venture Exchange ("TSXV") under the ticker symbol VRY.v.
Cautionary Note
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
Advisory Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and
potential investors with information regarding Petro-Victory's
future plans and operations, certain statements in this press
release are "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable
Canadian securities legislation (collectively, "forward-looking
statements"). In some cases, forward-looking statements can be
identified by terminology such as "anticipate", "believe",
"continue", "could", "estimate", "expect", "forecast", "intend",
"may", "objective", "ongoing", "outlook", "potential", "project",
"plan", "should", "target", "would", "will" or similar words
suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak
only as of the date thereof and are expressly qualified by this
cautionary statement.
Specifically, this press release contains forward-looking
statements relating to but not limited to: our business strategies,
plans and objectives, and drilling, testing and exploration
expectations. These forward-looking statements are based on certain
key assumptions regarding, among other things: our ability to add
production and reserves through our exploration activities; the
receipt, in a timely manner, of regulatory and other required
approvals for our operating activities; the availability and cost
of labor and other industry services; the continuance of existing
and, in certain circumstances, proposed tax and royalty regimes;
and current industry conditions, laws and regulations continuing in
effect (or, where changes are proposed, such changes being adopted
as anticipated). Readers are cautioned that such assumptions,
although considered reasonable by Petro-Victory at the time of
preparation, may prove to be incorrect.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors. These and additional risk factors
are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities
regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to
forward-looking statements in this press release has been provided
in order to provide shareholders and potential investors with a
more complete perspective on Petro-Victory's current and future
operations and such information may not be appropriate for other
purposes. There is no representation by Petro-Victory that actual
results achieved will be the same in whole or in part as those
referenced in the forward-looking statements and Petro-Victory does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities law.
SOURCE Petro-Victory Energy Corp.