Brazil’s largest integrated energy firm, Petroleo Brasileiro SA or Petrobras (PBR) reported discovery of good quality oil from the two recently completed wells. These wells are located in the pre-salt reservoirs Florim and Entorno de Iara, in the Santos Basin in the Transfer of Rights area.
The well Florim 2 or 3-BRSA-1215-RJS (3-RJS-725) is located around 200 kilometers off the Rio de Janeiro coast and 7 kilometers from the discovery well Florim, at a depth of 1,972 meters. Good quality oil (29°API) has been unveiled at water depths of 5,412 meters.
The well Entorno de Iara 2 or 3-BRSA-1172-RJS (3-RJS-722) is located around 225 kilometers off the Rio de Janeiro coast and 7 kilometers from the discovery well Entorno de Iara, at a depth of 2,249 meters. Good quality oil (26°API) has been found at water depth of 5,116 meters.
Petrobras will complete the exploration phase of these areas by Sep 2014 and may declare the commerciality of the region by then.
Headquartered in Rio de Janeiro, 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, and in the refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
Last month Petrobras reported fourth quarter earnings per ADR of 41 cents, surpassing the Zacks Consensus Estimate of 35 cents. However, it was significantly lower than the year-ago quarter profit of 58 cents, on the back of lower output.
Petrobras currently retains 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 consider better-ranked players in the energy sector like Patterson-UTI Energy Inc. (PTEN), Helmerich & Payne Inc. (HP) and Warren Resources Inc. (WRES). All the stocks sport a Zacks Rank #1 (Strong Buy).
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