Petro-Victory Energy Corp. (TSX-V:VRY) has announced a new partnership to develop the Andorinha field and Block POT-T-281 in Brazil's Potiguar basin.
The new partner, Azevedo Travassos Petroleo (ATP), will cover 100% of the costs for a work program that will include the drilling and completion of the AND-4 and AND-5 wells, plus a workover of the existing CR-2 well.
Petro-Victory will receive 25% of the net income generated by the production of these wells until ATP recovers its capital expenditures, and, thereafter the partners will split net income equally.
"The partnership between Petro-Victory and ATP creates potential for growth and further developments with the aim of extending market reach and capturing new synergies between the two companies and their operating assets," the company said in a statement.
It is planned that a new reserves certification process will take place following the work program.
ATP, meanwhile, also acquires the option to purchase 50% of the assets within nine months, at a price multiple of $10 per proven reserve barrel and $4 per probable reserve barrel.