GREY:HRTPF - Post Discussion
Post by
Rzbern on Jan 27, 2015 9:38pm
Comments about HRT-PetroRio Interview (01/23/2015)
This information is old. That was published 5 days ago (01/23/2015)
https://veja.abril.com.br/blog/mercados/petroleo-gas-e-mineracao/petrorio-ex-hrt-planeja-mais-aquisicoes/
My comments about some parts of the text:
Quote:
How did the opportunity to buy the Bijupirá and Salema fields Shell?
Shell had relationship with some people of PetroRio, and they began a formal process of asset sales. We were one of the guests, and essentially were Brazilian and Chinese companies who participated.
No comments
Quote:
You are selling non-core assets, such as the Solimões Basin and Namibia concessions. How is this process?
Bijupirá-Salema is part of the company's plan to buy assets in production, assets that represent a lower risk against the company and was done in the past. In relation to assets that the company still has this past, especiallythe blocks in the Solimões and the blocks in Namibia, both are part of the previously announced plan of divestiture to have an exploratory profile. Given the company's strategy to reduce risk, they no longer fit in our profile.
They were clear that solimões and Namibia is off. These projects are dead. Only farm out now. Forget solimões gas and also forget new frontier of oil in africa.
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When you expect to have completed these divestments?
By the end of February, early March, for sure.
Well, it this easy to charge later. They gave certainty. Used the word "for shure".
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Why Glencore is financing the transaction? She was already trading company that bought those oil fields?
No. Glencore is financing the transaction for a few reasons. The first is because she likes the asset. Second,she likes the PetroRioand wants closer ties with the company, and we want to strengthen our relationship to it. The third is because she has naturally interest in selling the oil that we produce both the Polvo field (where PetroRio holds 60%) and, in a very short in Bijupirá. Today, it is the trading Shell marketing the oil Bijupirá.
it is funny. someone make business based in likes? Glencore, They likes this, They likes que, They likes the asset, likes PetroRio. Many likes.
"It is like a love story: ...and wants closer ties with the company, and we want to strengthen our relationship to it.
Come on, nobody finances because they like the asset or because they like the company. Love, tastes are not the agenda for business. Business involve money and that initial conversation came to be moving, kind to minority shareholder cry with emotion. The most important is the third item, They, Glencore, interest in selling the oil Octopus, and Glencore had the money for it they will determine how buy and how sell. Priority will profit them, when and if any. First the money restores the payment of capital in Glencore, interest and amortization of principal, the part of the lender. Only after the borrower, the PetroRio, will see the color of money. only remembering that Glencore is not a bank.
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After this purchase, as is the PetroRio cash position?
Glencore is funding 80% of the purchase price, and we are paying 20% with our cash. We have a very strong policy to preserve cash. The company has no debt. Her box today enough to pay all debts and still have money.
This, in my opinion, is one of the most curious answers, for he says that Glencore has funded 80% of the value, then HRT is replaced by this FUNDING with Glencore, but then says that the company has no DEBT. I missed something or a phrase not talk with the other? Then says that the company's cash enough to pay all debts. But then I wonder: what DEBTS he talk if he said the company has no DEBT? I believe that by reference, apparently Glencore lent because you like the company and active and should have given the money and like only return for kindness, HRT leave Glencore gain some selling production.
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When you entered the HRT, there was almost a war on the board, with each proposing a direction for the company. What direction did you choose?
One of the things we have done more in the company is to introduce common sense. Márcio (Mello, founder of HRT) has all the qualities, is a guy entrepreneur, a great guy. But it's amazing how the company lacked common sense. From the moment we entered the company - we invested a year - much of what we did and that has generated value for the company are obvious things. You saw a decision being taken, you stopped to ask two or three questions, or they had no answers, or the answers did not satisfy.
In addition, we have given chance and resources for executives who are good and well prepared for them to have autonomy and responsibility. We have taken those with state culture, that it's time he wants and leaves the time you want, with giant salaries regardless of result .. that ended within the company! What's there today are very prepared people, very qualified, very autonomy and many goals. People wearing the shirt. The new office is all open, everyone is on the same floor without rooms. The directors sit in front of others. All the talk there has to be good and make sense to anyone who is listening or agree or disagree with you, to improve what is being done.
"Márcio (Mello, founder of HRT) has all the qualities, is a guy entrepreneur, a great guy"
no more comments after this phrase praising Marcio Mello
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Did you try an approach with OGpar (formerly OGX) to a merger with PetroRio. How are these conversations?
Look, we are studying all the assets in the market: those for sale and those that are not. As for OGPar, make much sense, because the Tubarão Martelo field is adjacent to the Polvo field, then it has a lot of synergy there. They also have the BS-4 up there, the fields of Atlanta and Oliva, which are developing fields and will start producing in a few years. In 2013, when we began to study the oil and gas sector, we study the two companies: HRT and OGPar. Study these very companies. We currently have no ongoing negotiation with them.
A possible merger with OGPar bring debt to PetroRio?
No, because all debts it is being converted into shares.
www.bloomberg.com/news/2015-01-23/pimco-led-rescue-of-batista-startup-seen-faltering-on-oil.html
"Staff Cuts
OGpar may need to stop operating in Martelo to save cash as its production costs are higher than the revenue it generates with the recent decline in prices, one of the people with knowledge said."
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You want to lead the consolidation of small businesses, taking advantage of this time to market?
This oil and gas industry has a very interesting thing. When oil falls much more worthwhile for a company to buy another that is cheap and has various fields with more certain perspective than buying an exploratory field and having to make any investment ... So this time of low oil is conducive for mergers and acquisitions. Who has box will be able to buy a company that has multiple active, good executives and everything working. It is better to buy a company so than spend money running the exploration risk of an asset, make all the seismic, etc.
...good executives? everything working? I think he hinted that may be good business organizing the company and interesting for someone to buy organized. Sell PetroRio for other company. it would be Glencore? But, for it, first I think they would close the capital. Maybe with debentures move?
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You want to make a story to the capital market, or will administer PetroRio as a family business?
Let's play that company we play all our other: meritocracy, growth, bedding, result. Oil fell a lot and we are taking all measures to restructure the company, renegotiate contracts and can buy ideally solid companies with good assets and cheap. Our vision is long term and based on the foundation and delivery of results.
Between the lines, I see understand it would be like a family business. Look closely at the question asked and the stretchs that emphasis added with bold. This answer left the interviewer in doubt and so much that he made the next question:
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But you want that the market is on board?
Yes, for sure. We are starting a working relationship with the banks and other players in the industry, but our vision with respect to the capital market is to deliver results. In the case of Bijupirá Salema, we think they did a good buy, we pay a good price, and then we will do the same Octopus: we operate it more efficiently and cheaper than Shell, ideally. This is already a reality: we already operates Octopus with more efficiency than BP (who HRT bought the field).
Where were mentioned in the answer above the shareholders of the company. He said: ...with the banks and other players in the industry
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