Brazilian oil company Petroreconcavo SA has agreed to buy Maha Energy's subsidiary in the Latin American country, the companies said on Wednesday, marking another step in the Brazilian firm's ongoing expansion.
According to a securities filing, Petroreconcavo will pay $138 million for 100% of Maha Brasil, which operates oilfields in the country's northeastern region, plus a potential earnout of up to $36.1 million.
The move comes just days after Petroreconcavo's chief executive told Reuters the company had not ruled out fresh acquisitions while planning to boost investments to develop onshore fields in the region.
The Brazilian firm has grown significantly in recent years after buying assets from state-run oil giant Petrobras, going public last year in a 1.2 billion-real ($226.72 million) initial public offering and raising an additional 1.03 billion reais in a follow-on offering this year.
It said the northeastern Brazilian location of the Maha Energy assets would "enable future integration" with Petroreconcavo's own onshore assets in the states of Rio Grande do Norte and Bahia. The fresh deal will provide it with another asset in Bahia, as Maha Brasil operates the Tie oilfield in the state. It will also allow it expand to shallow-waters in the neighboring state of Sergipe, where Maha operates the Tartaruga field, holding a 75% stake in the asset alongside Petrobras.
In a separate statement, Maha Energy said its board of directors considered the deal "advantageous and aligned with the company's new portfolio management strategy," which included a recent business combination with DBO, a firm focused on mature offshore fields in Brazil. The assets had an average total production of 2,928 barrels of oil equivalent per day in 2022, Petroreconcavo said, adding that Maha Brasil reported net revenue of $62 million in the first nine months of the year.
($1 = 5.2928 reais)
(Reuters - Reporting by Gabriel Araujo in Sao Paulo and Gdansk Newsroom; Editing by Christian Plumb)