Petro-Victory Energy Corp. (TSX-V:VRY) and BlueOak Investments have signed an agreement to acquire Capixaba Energia LTDA, an onshore Brazilian oil and gas producer, in a deal valued at $17.5 million.
The transaction, expected to close in the second quarter of 2025, will expand Petro-Victory’s presence in Brazil’s Espírito Santo Basin.
The acquisition includes four oil fields, including the Lagoa Parda Cluster, as well as two exploration blocks adjacent to major producers.
Capixaba Energia currently produces about 400 barrels of oil equivalent per day (boe/d), 88% of which is oil.
The new owners plan to ramp up production significantly within 12 to 18 months through a targeted workover and drilling campaign.
"This acquisition strengthens our position in Brazil, firmly establishing Espírito Santo Basin as a key area for production growth and complementing our presence in the Barreirinhas and Potiguar basins, where we are already well-positioned," said Richard Gonzalez, CEO of Petro-Victory. "We look forward to unlocking the full potential of these assets and driving long-term value creation with BlueOak."
'Strategic milestone'
Under the joint venture agreement, BlueOak will fund the acquisition and take control of the assets, while Petro-Victory will act as the operator. Initially, Petro-Victory will hold a nominal equity position, which will increase to 20% and then 50% upon reaching certain milestones, without requiring additional capital investment.
"This is a strategic milestone in our expansion as we establish a hub of production and expertise in the Espírito Santo region," Gonzalez added. "We are confident in our ability to optimize these assets and maximize their value."
Meton Morais, CEO of BlueOak, said Brazil is an increasingly attractive market for oil and gas investment, with more sellers than buyers of onshore assets.
"The Espírito Santo onshore basin offers a unique consolidation opportunity, given that we do not see a major structured and capitalized player investing in the development of its assets," Morais said. "We look forward to a successful partnership with Petro-Victory as we drive growth and create sustainable value through operational excellence and disciplined capital allocation."
Petro-Victory previously partnered in the Lagoa Parda Cluster, giving it technical expertise in the region.
To date, Capixaba Energia's fields have produced 38 million barrels, with significant remaining reserves. A new reserve report, currently being prepared in accordance with NI 51-101 and COGEH standards, is expected to confirm an increase in certified reserves.
Shares of Petro-Victory gained 9.6% on Thursday morning to trade around C$1.26 by midday.