Brazil's Enauta wraps up US$265mn debenture offering

Brazilian oil and gas company Enauta has concluded its first issuance of incentivized debentures, the company said in a statement to the market.

Subscription and payment comprised 1.4mn debentures for 1.4bn reais (US$265mn). Of the total, 737mn reais was issued in a first series, with remuneration interest of nearly 9.83% per year, according to Enauta.

The remaining 663mn reais was in a second series, with interest corresponding to the accumulated variation of 100% of the average daily inter-financial deposit (DI) rates, plus a spread of 4.25% per year.

The first series of debentures, which are special infrastructure bonds free from taxes for private investors, will mature on December 15, 2029, and the second series on December 15, 2027.

The company also said that it opted to convert 76% of the proceeds from the first series, or 560mn reais, into dollars by means of derivative instrument (swap) contracts.

Enauta is one of the biggest private sector companies in Brazil's E&P sector. 

The group has two producing assets: the Manati field, one of the main sources of gas supplied to the Northeast region, in which it holds a 45% stake; and the Atlanta field, located in the pre-salt area of the Santos basin, an operation of which it now has 100% control.

Bolstered by the rise in oil prices, coupled with the increase in its stake in the Atlanta field, Enauta posted 1.51bn reais in net revenues for the first nine months of the year, up 36% year-on-year.

“We ended the quarter with a cash position close to US$300mn, which gives us the confidence to continue the investments for the company’s growth,” CFO Paula Costa told investors in a November earnings call.

Capex amounted to US$82.6mn in the quarter. The company allocated 91mn reais to the Atlanta field in the period, partially offset by Enauta’s investment reimbursements for its partners in the SEAL-M-428 block, totaling US$8.4mn.

Year-to-September, the company’s investments reached US$337mn, compared with only US$16.7mn in the same period of 2021.

ATLANTA

Located in the offshore Santos basin, Atlanta has been operating under an early production system since 2018 and had produced more than 22Mb (million barrels) of oil as of end-September. 

The definitive FPSO is scheduled to arrive in Brazil in mid-2024, allowing the production of up to 50,000b/d of oil.

In February, Yinson signed a contract with Enauta for the conversion of an existing FPSO for the new production unit.  

The approved investment in the Atlanta project is US$1.2bn.

Of this total, US$500mn will be for the acquisition and adaptation of the FPSO, and US$700mn will be invested to drill additional wells, install the production system and seabed system equipment, and interconnections. 

"If you think about this amount, it's a much smaller amount than usual. This is because the adaptations are minor, small, they're not significant interventions. There are just a few new modules, which is why we can implement the Full Development System [FDS] in a short period of time," Enauta COO Carlos Mastrangelo said in the call.

The company had already disbursed US$285mn as of September 30 and another US$100mn will be disbursed after FDS production begins. 

The FDS second phase consists of drilling another four wells and installing production systems, seabed system equipment and interconnections. The investment estimated in this second phase is US$750mn, to be disbursed between 2025 and 2027.