On Mar 12, 2014, Brazilian state-run energy giant, Petroleo Brasileiro SA or Petrobras (PBR) reported the completion of drilling wildcat well 1-BRSA-1205-RNS (Pitu Well). Petrobras also revealed the new found existence of intermediate oil (24º API) in the Potiguar Basin while drilling the well which is situated at water depths of roughly 1,731 meters.
Petrobras reached a depth of roughly 5,353 meters while drilling the well and discovered a hydrocarbon column of 188 meters.
As an operator, Petrobras holds an 80% ownership in the concession BM-POT-17, where the wildcat well is located. While the rest 20% is owned by Petrogal Brasil SA.
Last year, BP Energy do Brasil Ltda., an affiliate of U.K. supermajor BP plc (BP), entered into a farm-out agreement with Petrobras to acquire a 40% interest in BM-POT-17, dependant on regulatory approvals. On approval, BP Energy do Brasil Ltda will hold a 40% interest in BM-POT-17, Petrogal Brasil SA will maintain a 20% share while Petrobras as an operator will own 40%.
Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s activities include: exploration, exploitation and production of oil from reservoir wells, shale and other rocks. The company also engages in the refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
Headquartered in Rio de Janeiro, Petrobras currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the energy sector like Warren Resources Inc. (WRES) and Patterson-UTI Energy Inc. (PTEN). Both the stocks sport a Zacks Rank #1 (Strong Buy).
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