Corcel plc has marked its first onshore Brazilian acquisition with a binding option for a 20% interest in the IRAI gas field in Bahia, with first right of refusal on the remaining 80%.
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The agreement with Petroborn Óleo e Gás S.A. also includes a further first right of refusal for 100% of the adjacent TUC-T-172 exploration block.
Corcel said that, through its wholly-owned subsidiary CRCL Brazil Ltd, the deals diversified investors’ risk, brought initial production, and generated cashflow with “minimal dilution to shareholders”.
The company noted that the IRAI gas field has been in production since 2018 and produced 390,000 boe (63,972,218 m³) of gas from three wells.
One of the wells is online while the other two are shut in for workover operations.
Corcel will loan US$559,000 for the two workovers, due to begin in Q1 2025, aiming to increase production to an “average of 188 boepd (30,890 m³/day) throughout 2025”.
The company can then either exercise the option or be repaid in full for funding the two workovers.
On exercise of the option, Corcel will advance a capped US$2.95 million for additional development over two years, in two tranches, in return for cashflow plus interest.
Chief commercial & strategy officer Geraldine Geraldo added that the “value-enhancing deals” onshore Brazil complemented Corcel’s Angola exploration strategy.
“This positions us perfectly to capitalise on the abundant opportunities that have risen from the secondary market, resulting from the Petrobras onshore divestments, paving the way for an accelerated acquisition journey of more high-potential producing onshore oil and gas fields in Brazil.”