Petro Rio S.A. HRTPF

Polvo Production

[Bob322]

If you look over the BP and Maersk Oil reports on the Polvo project, you will see that the production is off a single fixed platform with 10 wells and 3 related injection wells – hence 1.35K/day. Over the last six years, production has declined from around 25K/day in 2011 (BP acquisition) to 13K/day in 2013 (HRT acquisition). In 2009, Maersk Oil projected long-term production at 17K/day, which is not being currently met.

The initial fact materials stated the license covers over 134 km2 of acreage with numerous attractive prospects for further exploration. With the fixed nature of the platform and cost to locate in the Campos Basin, perhaps they can drill directionally off the fixed platform without the need to bring in another platform. In the alternative or in tandem, MM may initiate secondary recovery to enhance production toward 17K/day.

Frankly, I anticipate that the existing project is such a relatively small fry that BP would rather allocate its professional resources elsewhere instead of addressing the steep decline curve at Polvo.