Brazil's QGEP acquires Pacific exploration stakes

Monday, October 17, 2016

Brazil's QGEP Participações has acquired stakes held by partner Pacific Brasil E&P in three exploratory blocks in the country's north.

In a statement on Monday, QGEP said it signed an agreement to assume Pacific's working interest in blocks FZA-M-90, PAMA-M-265 and PAMA-M-337.

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"As part of the agreement, Pacific will pay the outstanding amount due to QGEP related to the acquisition of seismic for the PAMA blocks, and will compensate QGEP for part of the minimum financial obligations, which amount to US$10mn," QGEP said.

It did not specify the percentages of the blocks that were transferred.

QGEP said it is now the only concessionaire in the PAMA blocks, meaning it is free to farm out the areas.

"Considering the initial information that we have on these blocks, we took advantage of Pacific's decision to exit the Brazilian market to increase our position and move on with the exploratory evaluation process, monitoring potential upsides that may come from activities across the equatorial margin," QGEP chief executive Lincoln Guardado said.

The transaction is subject to approval by ANP and other regulatory entities, QGEP said.

Last month Pacific said it reached an agreement to sell its 35% interest in five Santos basin blocks to partner Karoon Gas Australia for up to US$20.5mn.

Formerly known as Pacific Rubiales, Toronto-listed Pacific E&P is grappling with mounting debt and the impact of a sharp decline in crude prices.