[Brazil] Frade - FPSO Frade

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escveritas
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[Brazil] Frade - FPSO Frade

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PetroRio closes Frade deal with Chevron

Frade Field Historical Financial Information

On March 25, 2019, we completed the acquisition of a 51.74% working interest in the Frade Field (and related operational assets) from Chevron Corporation (“Chevron”), and on October 1, 2019, we completed the acquisition of an additional 18.26% working interest in the Frade Field (and related operational assets) from INPEX. See “Business—Properties in Production and Development—The Frade Field.” As of December 31, 2019, our interest in the Frade Field thus reflected the acquisition of five separate companies, including Petro Rio Jaguar Petróleo Ltda., Frade LLC and Frade B.V., acquired from Chevron (the “Frade Field Chevron Acquisition”), and Petro Rio White Shark Petróleo Ltda. and IONC (Japan), both acquired from INPEX Corporation (“INPEX”) (the “Frade Field INPEX Acquisition” and collectively with the Frade Field Chevron Acquisition, referred to herein as the “Frade Field Acquisitions”).

We have only prepared financial statements for PetroRio Jaguar and PetroRio White Shark for the year ended December 31, 2019 in accordance with IFRS, which were audited by BKR – Lopes, Machado (the “Jaguar and White Shark 2019 Audited Financial Statements”), because PetroRio Jaguar and PetroRio White Shark represented the vast majority of the revenues, assets and liabilities related to the Frade Field. No audited financial statements for Frade LLC, IONC (Japan) and Frade B.V. existed at the time of the Frade Field Acquisitions because these entities had an immaterial amount of revenue, assets and liabilities, and therefore we have not prepared audited financial statements for these entities. We have not included the Jaguar and White Shark 2019 Audited Financial Statements in this Offering Memorandum for two main reasons. First, in connection with our reassessment of some estimates during the re-auditing of the PetroRio Audited Consolidated Financial Statements, it was determined that various adjustments as described herein were needed to the 2018 and 2019 audits previously performed and that the Jaguar and White Shark 2019 Audited

Financial Statements were not subject to the changes made in the discount rate for abandonment provisions, reduction of liabilities or adjustment to the price paid by us for interests in the Frade Field. Because of this lack of direct comparability, we have determined that providing the Jaguar and White Shark 2019 Audited Financial Statements could lead to confusion for investors seeking to determine whether to invest in the Notes offered hereby. Second, as from March 25, 2019, the PetroRio Audited Consolidated Financial Statements consolidated our 51.74% working interest in the Frade Field, which management believes shows the impact of the bulk of the Frade Field Acquisitions, with the 51.74% working interest reflected from and after March 25, 2019 and the remaining 18.26% reflected from and after October 1, 2019, both being the actual dates of acquisition.

Pursuant to the Frade Field Petrobras Acquisition, we acquired an additional 30% working interest in the Frade Field from Petrobras. The Frade Field Petrobas Acquisition closed on February 5, 2021 and since February 5, 2021, PetroRio accounts for 100% of the working interests in the field. As further discussed in the sections entitled “Business—Overview” and “Business—History and Development,” we have made certain strategic
Acquisitions that have materially impacted our business. In particular, on March 25, 2019, we completed the acquisition of a 51.74% working interest in the Frade Field from certain subsidiaries of Chevron pursuant to the Frade Field Chevron Acquisition. On October 1, 2019, we completed the acquisition of an additional 18.26% working interest in the Frade Field from certain xii subsidiaries of INPEX pursuant to the Frade Field INPEX Acquisition, after which we had a 70% working interest in the Frade Field.

On November 28, 2019, we entered into an agreement with certain subsidiaries of Petróleo Brasileiro S.A. — Petrobras (“Petrobras”) for the acquisition of the remaining 30% working interest in the Frade Field pursuant to the Frade Field Petrobras Acquisition (as defined herein). The Frade Field Petrobras Acquisition closed on February 5, 2021. Accordingly, since February 5, 2021, PetroRio accounts for 100% of the working interest in the Frade Field. See “Business—Details on the Acquisition of Fields—The Frade Field Petrobras Acquisition.”
escveritas
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Re: [Brazil] Frade - FPSO Frade

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RIO DE JANEIRO, Brazil — PetroRio has completed its first issue of local debentures, worth R$2 billion (US$59.2 million).

Among these resources, R$1.5 billion (US$296.1 million) will be directed to PetroRio's infrastructure projects, such as the Frade Field development plan, and the rest will be allocated to other corporate investments.

On Aug. 15, PetroRio said it had interrupted production in the Frade Field due to an inert gas line. The company had initially estimated that the interruption of production from the field located in the Campos Basin would last between five to seven days.

Average production from the Frade Field in second-quarter 2020 was 14,759 boe/d, a dip compared to the average output of 14,941 boe/d in second-quarter 2021.

In July, PetroRio brought online the ODP4 well at the field, nearly doubling the Frade Field's output. Average production from the Frade offshore oil field in July was 28,509 boe/d.

In May, a subsidiary of Aquadrill LLC has entered into a memorandum of agreement for the sale of the Capricorn semisubmersible drilling unit in its current condition, together with everything belonging to it on board or onshore, with buyer Petro Rio Jaguar Petroleo Ltda., a subsidiary of Petro Rio S.A., for $40 million.

In January, PetroRio commissioned a workover on the OGX-44HP well at the Tubarão Martelo Field in the southern Campos Basin offshore Brazil, following a failure in the electrical submersible pump.
escveritas
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Re: [Brazil] Frade - FPSO Frade

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