3R Petroleum hires Itau BBA to help evaluate a possible merger of assets with PetroReconcavo

(PN) 3R announced that it hired Itaú BBA as the company’s financial advisor in evaluating the operation. The consultancy includes, together with internal teams and legal advisors, the evaluation of the strategy and schedule, and the analysis of the best corporate structure for implementing the potential transaction, if implemented.

As a reminder, the merger proposal was presented by the Swedish company Maha Energy, which owns 5% of 3R’s capital. According to the plan outlined, the intention is to consolidate all onshore fields of the two companies under PetroReconcavo, resulting in gains of US$ 1 billion in synergies. In turn, 3R would maintain its current offshore assets, and shareholders would receive shares in PetroReconcavo.

According to the schedule prepared by Maha Energy, the business combination proposal to PetroReconcavo will be presented together with the Board of Directors of 3R Petroleum, seeking an agreement on the term of commitment by February 28. Negotiations are expected to extend throughout the second quarter to finally obtain approvals from the relevant authorities and creditors, concluding the transaction in the third quarter.

In Maha Energy’s calculations, the combined onshore portfolio would encompass approximately 458 million barrels of proven reserves and 604 million barrels of proven and possible reserves (based on the most recent public information). These numbers would translate into a combined production of around 80,000 barrels of oil equivalent per day in 2024, with the potential to generate US$2.1 billion in revenue and US$1.1 billion in pre-EBITDA synergies.