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CALGARY, AB, Nov. 19, 2020
/CNW/ - Petro-Victory
Energy Corp. (TSXV: VRY) ("Petro-Victory"
or "Company") is delighted to announce that it has
commenced commercial production at the São João oil field in the
State of Maranhão, Brazil.
São João oil field (Petro-Victory 50% Working
Interest)
As previously announced, Petro-Victory acquired a 50% working
interest in the São João oil field in Q4 2019 for a total cost of
R$500,000 (approximately US$93,000 at current exchange rate). The São João
field produced 87,500 BO cumulative intermittently between
1984-1988 from 4 wells and has been abandoned in excess of 30
years.
In Q4 2019 and Q1 2020 the Company, with its operating partner
Oeste de Canoas Petróleo e Gás Ltda, installed production
facilities at the field area, including storage tanks, flow lines,
road access, and general civil and mechanical work. A workover rig
was mobilized in Q2 2020 to commence production testing. In
November, the field is currently averaging production of 70
BOPD (35 BOPD net to Petro-Victory) from 3 wells (SJ-01, SJ-06, and
SJ-11), and production is expected to increase in the short-term
following the installation of artificial lift systems at the SJ-01
and SJ-11 wells.
Successful Workovers
The Company has re-entered 3 suspended oil wells (SJ-01, SJ-06,
and SJ-11) and completed oil production testing in line with its
work program commitments with the Agencia Nacional do Petroleo Gas
Natural e Biocombustiveis of Brazil ("ANP").
The SJ-01 well was re-entered and brought online without
artificial lift and has produced over 3,000 barrels of
36o API light oil over a 6-month period until
October 2020. The well was tested
over 3 periods, 11 days in April, 12 days in May, and 11 days in
June, and was put online on the 9th July with continuous
natural flow and has since averaged 8 BOPD during this period.
The SJ-06 well was re-entered and tested and has produced over
2,800 barrels of 36o API light oil over a 5-month period
until October 2020. The well was
tested for 9 days in May and 26 days in June, and 34 days across
July and August. The SJ-06 well was suspended on the
11th August to install a progressive cavity pump (PCP)
system to provide artificial lift. SJ-06 is currently averaging 35
BOPD since resuming production and the workover rig has now been
mobilized to SJ-11 for production testing.
The SJ-11 well was re-entered for testing and was brought online
on 26th October without artificial lift. In the period
between 26th October and 15th November the
well has averaged 46 BOPD. Due to the strong production performance
from SJ-11 the well will be allowed to produce without artificial
lift until the end of November, when SJ-11 will be temporarily
suspended to install a progressive cavity pump (PCP) system to
provide artificial lift. The SJ-11 well is geologically similar to
the SJ-06 well and is expected to perform in a comparable fashion
when installed with the PCP system
Short-Term Work Program
Following installation of the PCP system at SJ-11 in
November/December, the workover rig will be mobilized to the
producing SJ-01 well for installation of the third PCP system at
the field.
An updated development plan for the São João field has been
submitted to the ANP at their request following the declaration of
commerciality and the commencement of commercial production
resulting from the successful workovers at SJ-01, SJ-06, and SJ-11.
On approval, the Company will announce any future additional work
program items and will keep the market updated on the progress at
the upcoming workovers on SJ-11 and SJ-01.
Oil Sales / Commercial
Petro-Victory has achieved payback of initial acquisition cost
and capital expenditures at the São João field and is netting back
US$30 per barrel with oil sales
attracting a US$5 premium to Brent
pricing (average November oil sales priced at US$45 per barrel when Brent was US$40 per barrel). With production set to
increase in the short-term with the completion of the pumping units
at SJ-01 and SJ-11, the São João field has been a highly successful
first production operation for the Petro-Victory team.
Daily Production Update
The Company is currently in the process of applying for workover
and drilling permits for its 100% working interest field,
Andorinha, and will update shareholders on the progress at this
field in the near future. Net production in the month of November
across the Petro-Victory portfolio is currently averaging 52 BOPD
(35 BOPD at São João, 4.5 BOPD at Carapitanga, and 12.5 BOPD at
Andorinha).
Work will be focused initially on the São João and Andorinha
fields to increase production, as well as plans to bring online the
100% owned Alto Alegre and Trapia fields in the short-term, in
addition to performing workovers at the producing Carapitanga
field.
Richard F. Gonzalez, Chief
Executive Officer of Petro-Victory commented, "The commercial oil
production of our first 3 workovers at the São João oil field
demonstrates the successful execution of Petro-Victory's business
model of profitably producing oil in onshore Brazil. The cash
proceeds, generated from the previously announced sale of
non-operated assets, will fund the robust 2021 work program across
our portfolio of oil fields."
About Petro-Victory Energy Corp.
Petro-Victory Energy Corp. is engaged in the acquisition,
development, and production of crude oil and natural gas resources
in Brazil. The company is a
certified onshore and shallow water operator in Brazil and holds working interests in twenty
(20) licenses totaling 129,771 acres in three (3) oil producing
basins in Brazil, and a royalty
agreement in a 2-million-acre concession in Paraguay. Petro-Victory generates accretive
shareholder value through disciplined investments in high impact,
low risk assets. The Company's Common Shares trade on the TSX
Venture Exchange ("TSXV") under the ticker symbol VRY.v.
Cautionary Note
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy
or accuracy of this release.
Advisory Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and
potential investors with information regarding Petro-Victory's
future plans and operations, certain statements in this press
release are "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable
Canadian securities legislation (collectively, "forward-looking
statements"). In some cases, forward-looking statements can be
identified by terminology such as "anticipate", "believe",
"continue", "could", "estimate", "expect", "forecast", "intend",
"may", "objective", "ongoing", "outlook", "potential", "project",
"plan", "should", "target", "would", "will" or similar words
suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak
only as of the date thereof and are expressly qualified by this
cautionary statement.
Specifically, this press release contains forward-looking
statements relating to but not limited to: our business strategies,
plans and objectives, and drilling, testing and exploration
expectations. These forward-looking statements are based on certain
key assumptions regarding, among other things: our ability to add
production and reserves through our exploration activities; the
receipt, in a timely manner, of regulatory and other required
approvals for our operating activities; the availability and cost
of labor and other industry services; the continuance of existing
and, in certain circumstances, proposed tax and royalty regimes;
and current industry conditions, laws and regulations continuing in
effect (or, where changes are proposed, such changes being adopted
as anticipated). Readers are cautioned that such assumptions,
although considered reasonable by Petro-Victory at the time of
preparation, may prove to be incorrect.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors. These and additional risk factors
are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities
regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to
forward-looking statements in this press release has been provided
in order to provide shareholders and potential investors with a
more complete perspective on Petro-Victory's current and future
operations and such information may not be appropriate for other
purposes. There is no representation by Petro-Victory that actual
results achieved will be the same in whole or in part as those
referenced in the forward-looking statements and Petro-Victory does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities law.
SOURCE Petro-Victory Energy Corp.