3R Petroleum Óleo e Gás SA and Enauta Participações SA will create a new entity with production that exceeds 100,000 boe/d and compete head-to-head with Brazilian producer Prio, according to Wood Mackenzie. (Source: Shutterstock.com)
A merger agreement between 3R Petroleum Óleo e Gás SA and Enauta Participações SA aims to create a diversified Rio de Janeiro-based independent competing head-to-head with Prio, currently the largest independent operator in Brazil, according to Wood Mackenzie.
Operations under the combined businesses could surpass the 100,000 boe/d production mark, Wood Mackenzie Upstream Research Analyst Amanda Bandeira said in a May 21 research report.
“This is a complementary merger between the two companies. Enauta adds expertise in offshore operations, while 3R Petroleum, with a more diversified portfolio, brings to the table heavy onshore operations experience,” Bandeira said.
Wood Mackenzie sees the newly combined operation focusing first on integration, but constantly looking for new inorganic growth opportunities in Brazil or even internationally.
“Mid-term, stronger cash generation and the combined expertise of both companies can also open space for the new company to be exposed to riskier activities such as exploration. Both companies have exploration acreage that hasn't seen activities due to other capital investment priorities,” Wood Mackenzie Upstream Research Analyst Vinicius Diniz Moraes said in the report.
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