Junior oils negotiate merger to strengthen themselves in the Brazilian market
04/05/2024
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Seacrest’s sale process comes at a time of significant activity in the market — Foto: Seacrest Petróleo/Divulgação
Seacrest is looking for a buyer amid a strong wave of consolidation of independent oil companies in Brazil, Valor found. The company, which went public last year on the Norwegian stock exchange, hired Goldman Sachs as its financial advisor, according to sources who spoke on condition of anonymity.
Other companies in the sector have already been surveyed about potential interest in the independent oil company, a newcomer in the segment.
The company’s sale process comes at a time of significant activity in the market. This week, Enauta proposed a merger with 3R Petroleum—a memorandum of understanding is expected to be signed next week, according to sources.
3R had already received a proposal to combine assets with PetroReconcavo, but the talks did not progress because the two companies could not reach an agreement on the exchange of shares between them, according to people familiar with the matter. Enauta has undergone recent changes in the shareholding base and board, and its movement reflects the agility of its creditors, Bradesco and Jive. Until last year, the independent company was identified as a target for consolidation, not as a protagonist in this process.
In the proposed merger with 3R, Enauta conveyed the message that, if the merger with the competitor materializes, the result could be a company capable of fostering other mergers and acquisitions (M&A) processes in the sector, driving the consolidation movement in an industry led by Petrobras.
A consolidation movement of these smaller companies was already anticipated by the market because the oil and gas industry needs scale. The game changed after Petrobras stopped the process of divesting more mature wells with the election of President Lula. Assets sold in previous administrations gave rise to independent oil companies.
Seacrest emerged from this process after purchasing the Norte Capixaba field from Petrobras. The initial public offering (IPO) made a year ago on the Oslo stock exchange partly aimed at financing this acquisition. The company raised $260 million at the time.
The Oslo-listed company was founded in 2020 by Erik Tiller and Paul Murray, who are co-founders of the Norwegian oil company OKEA, also listed on the Oslo stock exchange. The company’s first foray was the Cricaré field, which comprised 27 onshore oil concessions, in addition to oil production assets, an operation that was completed at the end of 2021.
Seacrest and Goldman Sachs declined to comment.
*Por Fernanda Guimarães — São Paulo
Source: Valor International