(Reuters) – Shares of Brazilian energy company Brava Energia (BRAV3.SA), opens new tab soared on Friday after it received approval from the country’s oil regulator to resume output at a key oilfield and said it was in talks with banks to prepare for potential asset sales.
Brava’s shares rose as much as 11.5%, making it the top gainer on Brazil’s benchmark stock index Bovespa (.BVSP), opens new tab, which was down 0.5%.
Investors were upbeat on news that Brazil’s oil regulator ANP allowed Brava to resume production at the Papa-Terra field, which had been halted in September after ANP requested information about its platform’s operational systems.
“The company will begin preparations to resume production, which is expected to begin early next week,” Brava said in a securities filing.
Papa-Terra had been producing 15,000 barrels of oil equivalent per day at the time of the stoppage, according to Brava.
“We see the approval of Papa-Terra’s production resumption as positive and important for Brava’s deleveraging story going forward, which is the key component that supports our ‘outperform’ rating,” Santander analysts said.
They also noted that a main driver for the stock looking ahead may be the sale of Brava’s onshore assets, which could also contribute to deleveraging.
Brava said on Friday in a separate statement that it was negotiating a mandate with two banks to evaluate potential partnership transactions or asset sales.
According to a person familiar with the matter, Itau BBA is one of the banks in talks with Brava. Itau BBA declined to comment.
Brava said that one of the two banks had presented an overview of the firm’s onshore assets to potential interested parties and set Jan. 9 as the date for proposals to be delivered.
Analysts at JPMorgan estimated that Brava’s onshore assets could be worth around $1.4 billion.
Brava was created this year through a merger between 3R Petroleum and Enauta.
Brazil Energy Insight 
Leave a comment