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Petrobras (PBR) Divests Polo Alagoas Stakes to Petromais

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Petroleo Brasileiro S.A. or Petrobras PBR entered an agreement with Petromais Global Exploration and Production SA to divest its 100% stake in the Polo Alagoas land and shallow-water fields, situated in the state of Alagoas, Brazil.

The divestiture decision was made as part of Petrobras’ plans to offload non-core assets and focus on offshore deep-water development mainly in the prolific pre-salt area. Notably, the company will receive $300 million for the assets. Of the total, $60 million will be paid immediately, while the remaining $240 million will be provided at the closing of the transaction.

The Alagoas hub consists of seven production concessions. This includes six onshore fields, namely Anambe, Arapacu, Cidade de Sao Miguel dos Campos, Furado, Pilar and Sao Miguel dos Campos, all located in the Alagoas state. The other concession involves the Paru development in shallow waters, with 24 meters below the water surface.

The combined production of the seven fields amounted to 1900 barrels per day of oil, 602,000 cubic meters per day of natural gas and 0.9 thousand bpd of natural gas liquids (“NGL”) between January and May 2021. Additionally, the transaction includes the Natural Gas Processing Unit of Alagoas, with a distillation capacity of 2 million cubic meters per day. The unit is in charge of processing 100% of the gas and generate NGL.

The divestiture fits well with the company's portfolio management strategy. It will contribute to improving the company’s capital allocation decisions to maximize shareholder returns. Petrobras is concentrating its resources on world-class assets in deep and ultra-deep waters, where it demonstrated great competitive advantage over the years.

Company Profile & Price Performance

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. Its activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. Further, it comprises refining, processing, trading and transportation of oil and oil products, natural gas, and other fluid hydrocarbons beside other energy-related operations.

Shares of the company have outperformed the industry in the past three months. Its stock has gained 29.9% against the industry’s 9.5% decline.

Zacks Investment Research
Zacks Investment Research

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Zacks Rank & Stocks to Consider

Petrobras currently has a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Range Resources Corporation RRC, Enerplus Corporation ERF and Baker Hughes Company BKR, each currently carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Range Resources’ 2021 earnings are expected to rise 16.2% year over year.

Enerplus’ 2021 earnings are expected to increase 41.4% year over year.

Baker Hughes’ 2021 earnings are expected to surge 57% year over year.

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Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report

Range Resources Corporation (RRC) : Free Stock Analysis Report

Enerplus Corporation (ERF) : Free Stock Analysis Report

Baker Hughes Company (BKR) : Free Stock Analysis Report

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