HRT Participacoes Em Petroleo SA (HRTPY) CEO Nelson Queiroz on Q4 2019 Results – Earnings Call Transcript

HRT Participacoes Em Petroleo SA (OTC:HRTPY) Q4 2019 Earnings Conference Call February 20, 2020 1:00 PM ET

Company Participants

Nelson Queiroz – CEO

Francilmar Fernandes – COO

Roberto Monteiro – CFO

Conference Call Participants

Christian Audi – Santander

Operator

Good day, ladies and gentlemen. Welcome to PetroRio’s conference call to discuss fourth quarter and full year 2019 results. Thank you for standing by. [Operator Instructions].

This event is also being broadcast simultaneously over the Internet and may be accessed through PetroRio’s Investor Relations website at www.petroriosa.com.br/ir, by clicking on the banner Q4 ’19 earnings release.

As a reminder, this — before proceeding, let me mention that forward-looking statements that might be made during this conference call relative to the company’s business perspective, projections and operating and financial goals are based on the beliefs and assumptions of PetroRio’s management and on information currently available to the company. Forward-looking statements are not a guarantee of success. They involve risks, uncertainties and assumptions as they are related to future events and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of PetroRio and could cause results to differ materially from those expressed in such forward-looking statements.

I would now like to turn the conference over to Mr. Nelson Queiroz Tanure, CEO; Mr. Francilmar Fernandes, COO; and Mr. Roberto Monteiro, CFO. Mr. Tanure, please go ahead.

Nelson Queiroz

Good afternoon, everyone, and thank you very much for joining us on this earnings conference call. And as always, I can see a lot of PetroRio employees listening to the call. And folks, this always makes me very happy. You are also owners of this company, almost everyone who works here is a shareholder. You are the ones that create all this value and you’re building something very beautiful. So that makes me very happy.

To speak a little bit about 2019, we had a very positive year. The first point to highlight is safety. We had high operating safety and operating efficiency at Polvo Field and at Frade Field, which we acquired in March of last year. Together with Manati, all operating at a very high safety level, and safety is everything. I mean environmental safety, occupational safety and health, these are our essential pillars not negotiable with many others, but this is the top priority for us.

When we grew the company, we acquired Frade Field. We had a drilling campaign at Polvo Field at the beginning of the second half of ’19, but we also made many investments at Frade Field, which brought positive results and we continued to grow. Recently, we announced the acquisition of Tubarão Martelo Field, TBMT, but this was already in 2020.

And some other macro level comments. The evolving culture in principle ownership, operating discipline, financial discipline of PetroRio focused on attracting talented people and get them great challenges with high expectations regarding what they can produce. This is very important for our company to continue to grow sustainably.

And a quick reflection now but we will look at our 2019 numbers. Roberto will get into more detail before Francilmar, but it is worth pointing out that the medium Brent price in 2018 was $73. All of the results we will show now that were positive and improving compared to 2018 happened with a Brent price of $63. So we were able to grow the company, improving — creating value, improving our margins in a more challenging environment, but $10 less in the price of our Brent oil. So this is a good context in which to analyze our numbers.

In terms of safety, as I mentioned, safety is very important. Polvo operators’ were operating efficiency and safety indicators, which was very high, satisfactory and that achieved our expectations. Frade Field as well, we took over the operation in March. Chevron had done very solid work in terms of safety and best practices. So we could learn a lot from what they did at the field and acquired them at Polvo as well as apply many of our own Polvo best practices in Frade that led to mainly improvements in the already very positive indicators of the field. And these improvements become even more expressive when we consider all the investments made to rationalize costs at Frade Field and to improve reservoir management to consequently have better production at Frade Field. And Manati, operated by Petrobras, continues to be operated with very high satisfactory safety levels.

Along those lines, it is worth a quick reminder of PetroRio business model and how we create value. This is what we call CRP model. Essentially, it is a strong focus to rationalize costs and to have efficient costing together with very efficient reservoir management. That means a thorough analysis of seismic and geological data, production systems and to maximize the field’s production in a sustainable fashion. An easy way to understand this that, that every barrel is important to us. This was true when the company produced 6,000 barrels. It was true in the end of 2019 when we were producing close to 30,000 barrels and will remain true as we grow, every barrel counts for us.

In terms of efficiency and timing of response time and focus, this also generates good benefits for the environment. Polvo and Frade Field when operated separately had a much greater impact in terms of emissions than what they have today. Polvo and Frade, with all the synergies derived from a joint operation have a much more positive environmental impact than before. So in addition to all positive effects, efficiencies, synergies, we have a much more positive environmental impact.

To continue I’m going to quickly mention some tangible 2019 data. We started 2019 with 2 fields as our primary revenue stream, Manati and Frade Fields. And we had a production of approximately 12,000 barrels a day. We ended 2019 with more than 40,000 barrels, and we proceeded to have 3 assets generating revenue.

In Frade Field, in addition to a safe transition, as I previously mentioned, came with an FPSO that we have been operating since the beginning of last year and very safely, so the company becomes more and more solid and is getting ready to face bigger challenges, such as the acquisition of Tubarão Martelo, which just like Frade, comes with an FPSO, which will belong to PetroRio. And that will be operated by ourselves. So this is very positive.

And with many of the synergies and the way we operate these fields with the CRP model, here, we summarized the way to see the value accretive is analyzing our lifting cost. PetroRio’s lifting cost in the beginning of 2019 was approximately $30 per barrel. We ended 2019 with a lifting cost of approximately $19.

So we summarized way to see how we create value. Well, the first company that cost — that used to cost the whole company, not just the fields, but the whole company, we used to cost approximately $30 per barrel. If the company starts costs reducing more than 1/3, while growing and this is indeed the best hedging strategy that an oil and gas company can have by using very efficient with very low cost, with high very high production, all resulting in a very low lifting cost. This is our hedging strategy.

To end, two more points I’d like to mention. If the company grows delivering positive results with solid performance and a solid culture, we can also give back to society and contribute to the communities where we operate. So the company is very engaged in social, cultural, philanthropic and sports initiative. Here in the State of Rio de Janeiro, mainly in the City of Rio, there are way too many initiatives to list right now, but these activities are very important to PetroRio. They make us very proud to be able to contribute to the communities where we operate. We want to be an example company in terms of how we operate and how we behave in helping those who need help.

So thank you all of you who work here, and thank you to our investors. And I’d like to hand the floor to Francilmar. Thank you.

Francilmar Fernandes

Thank you, Nelson. Good afternoon, everyone. Let us move to our operating highlights. We can see in 2019 a 64.6% increase in production year-on-year, a very representative result, mainly due to the operations starting at Frade Field. We have a significant reduction in our lifting cost, which reached $19.7 per barrel, which is what we were pursuing all along 2019. Production at Frade increased 15% compared to our own estimates in the beginning of the assets transition process. Our operating efficiency in the quarter was 99.7% at Frade Field, maintaining excellent level of performance at the field, still a 97% reduction in our lost time incident rate.

For all of these items here confirm the company’s capacity. And we’re very happy to have handled the transition of the asset in record time. In around 4 months only, we were able to complete the whole transition and to take full control of the operation, so subsea system and the whole operation. In addition, in the end of the year, we had the acquisition of Tubarão Martelo field, which offer significant synergy gains to the company.

Now speaking a bit more about the performance of our assets. It is worth pointing out that Polvo Field had a 2.3% drop in production in the yearly comparison. And this was mainly due to the natural decline of the field. As a reminder, in 2019, we did not drill any additional wells, we did not add any new producing well. And only now, where we see the effect of new wells. Manati’s production had a more substantial reduction, 26%, mainly due to the natural decline of the field, but after a good production for many years, it started to show more production decline.

Talking more about lifting cost. We can see the evolution along the year in the chart. The top chart shows considerable 30% reduction from 2018 reaching $22.9 per barrel in 2019. Unless considering the startup production at Frade in April, 50% stake [indiscernible] plus the impact stayed more towards the end of the year. So in 2020, we should see an even more pronounced reduction in lifting costs. In the bottom graph, we see the evolution with a 30% working interest from Petrobras, along this year, we should expect even more reduction. And with TBMT, it should drop even more, but it was still under review, and we should see better numbers in the future.

On the following slide, we will analyze our operating performance. We see the graph related to Frade Field showing production evolution as of the start of the transition from Chevron to PetroRio. Some initiatives more towards the end of 2018, and along 2019 other set of initiatives, which were implemented to increase production to offset the natural decline of the field. So all of our day-to-day action, some short-term actions that have been completed, some more complicated actions which require a little more time, and they are at their final stage of preparation and should take place in the coming months, such as well stimulation through assets and that certification process that we should perform most likely between March and April, and some polymer injection operation to reduce water production at the well. And in the long term, the drilling campaign that should happen by year-end or next year.

On the bottom chart, we can see the production curve. We are very happy to see a 15% production increase compared to our own initial estimates, which were already higher than what the previous operator had estimated in their production program, which shows the potential of the field and the result of our great work.

In the following slide, we see both the fields operating performance with a more significant reduction in operating efficiency in Q4 ’19, a lot stemming from a reduced efficiency of the Polvo FPSO. It has some unscheduled stoppages for emergency maintenance, and that led to reduced efficiency. Coupled to that we had failure of ESP pump since beginning of the drilling campaign, so we had more than two at the well. And we have the recompletion of one well. We ended up spending a little more time on this well, but this helped drive production at the fields with the well producing around 700 barrels, which helped drive the field’s production up again in January.

Speaking about the drilling campaign of 2019. With one well, we were able to test three targets. The two primary targets, where Ipanema and Leblon carbonate reservoirs, similar to what we already produced at the field. And there was a secondary trial at sandstone reservoir. The results of the reservoirs were positive. We collected fluid samples, and the fluids originally showed a higher level of viscosities in what we have been producing at the field. So we need to perform technical and laboratory analysis to choose the best process to improve the profile of the oil with some kind of viscosity reducing agent. This is being analyzed, and we should have an answer in the next steps, so we can define our next — in the next days so we can define our next steps.

Now speaking about the drilling containment at Frade. We are at an advanced stage of market procurement and talking to suppliers. We are at a final stage of preparation for the subsea part. We should drill 4 producing wells and 3 injector wells. Drilling should begin along the second half of the year. We have a lot in our inventories. So we have an estimated CapEx for this first well of $70 million and should extend to 2021 and adjust the results — and we will adjust the results along the way.

I would like to thank the whole corporate team, all the teams, the M&A, legal, financial, HR management, everyone who provides support so we can achieve these great results so that we can make the engine run smoothly in so little time.

Thank you, Roberto and his team, Liliano and his team. Thank you, Nelson. Thank you, everyone.

Roberto Monteiro

Well, this is Roberto. Thanks, Francilmar. I will go over to PetroRio’s financial highlights for 2019. And as you could expect, the first number to be highlighted is our net revenue of BRL1.6 billion for 2019, a historical mark. Another all-time high mark is our EBITDA close to BRL800 million, with an EBITDA margin of 48%, also an all-time high, a cash generation of BRL570 million along 2019. So all of the indicators are very strong.

Now getting to M&A. We had the Frade deal, the remaining 30% working interest of Frade during Q4 ’19. And in the first quarter of 2020 as a subsequent fact, the acquisition of Tubarão Martelo field as well as the $65 per barrel hedging, covering approximately 70% of sales at the first half of the year.

Well, moving to the next slide, Slide 11, I will highlight only our 2019 EBITDA ex IFRS 16 of BRL791million. And I would just like to note that this EBITDA takes into account Polvo and Manati Field. When this EBITDA includes Frade Field, 50% as of March, 12% as of October, which is the stake from impacts, but it does not include any Petrobras stake of 30%. And obviously, it does not include any input from Tubarão Martelo, TBMT. What I mean by that is that we started 2020 with strong “contracted growth for our EBITDA.”

Now I will focus more on our M&A. On Slide 12, you can see our trajectory starting in 2014, strong M&A deal activity. In 2019, we have three M&A deals. Considering actually 2018 and ’19, so 3 M&A deals referring Frade, Chevron impacts and then Petrobras more towards the end of the year. In 2020, we started with the TBMT acquisition and OSX-3 FPSO.

And now focusing on 2020 Tubarão Martelo and OSX-3, I’d like to show you on Slide 13, the current snapshot of these 2 fields operating independently. We have one FPSO at Tubarão Martelo Field, one FPSO at Polvo Field. We have the logistic base in Niterói belonging to Dommo, the logistic base at Açu Port belonging to PetroRio. We have the support supply vessels. We operate Frade and Polvo with 3 supply vessels. Dommo has its own vessels, helicopters. We have our own helicopters. Dommo has its own helicopter. Now we talk about the supply base. So this is the kind snapshot, the current situation.

When I think about a tieback between the 2 fields, in addition to increasing production of the fields, we will add production from both the fields. We have a huge cost rationalization. As you can see on Slide 14, we can consolidate operations as if we were dealing with one single field Tubarão Martelo plus Polvo. They will be operated as a cluster. So the logistics base will be unified, supply vessels will be rationalized. We won’t need so many, the same goes for the helicopters.

And finally, the FPSO will be able to operate the cluster and book sales with only one FPSO. So in the end, Polvo plus Tubarão Martel, as a cluster will be very similar to what we have at Frade today. We’re going to have an increased useful life of at least 10 years. So we are talking about abandonment by 2035. We’ll add 40 million barrels worth of reserves according to our estimates, and we’re going to have a production cost below $15 per barrel. So perhaps this will be the biggest revitalization project for PetroRio in recent years.

So now moving to Slide 15. It deals with the financial performance of the company. We can see that we continue with an excellent financial solidity. We have a net debt over EBITDA ratio of 1.1x. And I’d like to make note of one point. This 1.1x ratio does not take into account cash referring to sales in the month of December ’19 because in December, as we can see in the balance sheet, we ended the year with accounts receivable at an atypical level of BRL374 million. So when we calculate net debt, we don’t take into account, accounts receivable. It’s not in our cash, but BRL374 million are in our cash in January. If we were to consider this BRL374 million, if they were out of accounts receivable and if they were posted in cash, our net debt-to-EBITDA ratio would have reached to 0.4x. So we have excellent financial solidity. We have firing power. We have a lot of momentum to continue to grow.

Moving to the next slide, Slide 16, it has to do with funding. Our debt, albeit a short-term debt, which is something we will try to address now in the coming quarters. So albeit a short-term debt, we have very attractive loans and funding. We can see all of the loan rates, they are LIBOR plus 3% per annum or lower. So the company continues to be very financially disciplined with financial solidity, and basically, this is all I have to point out about our funding in financials.

And I would like to make another comment. I would like to thank my financial team. I took over as CFO in the middle of 2019, leaving the operational department. So I’d like to thank my whole financial team for the whole work that they did. They worked hard at all fronts in terms of funding, accounting, M&A deals, trading, all of these financial areas. So I would like to particularly thank the financial team and the operational team and the legal and administrative team because they gave me a lot of support regarding the M&A process. And they still provide a lot of support to our operation now integrating this new asset, to make it work, to make the necessary and relevant cost reductions, and so on and so forth. So I would like to congratulate the whole company for the work done in 2019. Thank you very much.

Question-and-Answer Session

Operator

[Operator Instructions]. We have a question from the webcast from Mr. Rodrigo Seikera [ph].

Unidentified Analyst

The media has been saying that PetroRio is negotiating the acquisition of part of the Peregrine field, right? Can you give us an update on the negotiations with the Norwegian and the Chinese? What about Garoupa and Papa-Terra made available by Petrobras? Are they interesting to PetroRio? Any negotiations with Shell to acquire the [indiscernible] complex?

Unidentified Company Representative

Rodrigo, thank you for the questions. As always, we cannot make any comments about our M&A pipeline. What I can tell you though is that we are interested in considering many fields which are close to Polvo Field, close to Frade Field, and yes, we are very active in all of these processes like Petrobras. So we are interested in assessing Garoupa, Papa-Terra and so on and so forth. But for now, that’s all I can give you about M&A possible deals.

Operator

Next question is also from Rodrigo Seikera [ph] on the webcast.

Unidentified Analyst

What is the status of the 30% stake acquisition from Petrobras at Frade? What is the status of the drilling campaign of Frade? Any expected date for the closing?

Unidentified Company Representative

Well, Rodrigo, again, regarding the acquisition of Petrobras’ 30% stake, we are waiting approval from ANP, the Brazilian oil agency. We cannot give you a date for approval. We expect that this will follow the regular process. There’s no reason for the process to be different than the regular ANP process. We normally allow something between 6 and 9 months since we submit the protocol to ANP, in other words, since the acquisition date.

And regarding the Frade drilling campaign as Francilmar said, we intend to begin the drilling campaign in 2020. Drilling the first well most likely in the second half of the year. This is in the company’s plans. This is what we are structuring for Friday.

Operator

Our next question comes from Christian Audi with Santander.

Christian Audi

My question is, this capital use dynamic, as you mentioned, you have many M&A opportunities that you are looking into. At the same time, you have very interesting campaigns, such as the Frade drilling campaign. And given the recent deal with Tubarão Martelo, what are you thinking? Are you thinking we’ve had 2 recent M&A, so let’s focus more on campaign or vice versa. That’s my first question.

My second question has to do with corporate governance. I know that you are very focused on a continuous improvement in terms of adding more board members. So perhaps you could give us more color in terms of what other actions are implementing to improve corporate governance?

And finally, my third question, what about the TBMT campaign? I don’t know whether you can share any ideas with us in terms of what kind of production could we expected from TBMT.

Unidentified Company Representative

Christian, could you just repeat the final part of the question regarding Tubarão Martelo. There was a sound cut for us.

Christian Audi

Yes, of course. My question was, could you share with us perhaps what kind of production level you’re expecting? Once you finish the revitalization campaign, what kind of production could we have at this field?

Unidentified Company Representative

I’m going to answer the first question and the last. And the part on the Board, I’ll give the floor to Nelson. Well, regarding the first part of your question, it had to do with focusing on M&A, capital allocation and so on and so forth. Well, we continue to be very active in M&A with any opportunities arising in Brazil in terms of mature fields and producing fields. These are different departments. The department that executes the drilling, the engineering team that’s a separate team now. Of course, they do help us in terms of assessing a possible M&A deal, but project execution is very separate from M&A activities. So we have sufficient muscles to work on both fronts.

Now the company is keen to maintain a net debt over EBITDA ratio that makes sense. It is at 1.1x now. We believe the company should run between 1 and 1.5x so that we can maintain our financial performance and our firing power. So what we may do in the future to maintain this level of net debt-to-EBITDA ratio, whilst the first would be to work on our debt. Our debt is concentrated into short-term debt. The rates are very good, but they’re short term. So perhaps we could have an issuance to elongate the debt profile. It doesn’t change the net debt over EBITDA ratio, but it does release cash flow in the short term.

And another possibility is to have some treasury, shares, perhaps, think about a follow-on, depending on the magnitude of the opportunities that we might have. So this is our mindset. We want to keep a net debt over EBITDA ratio that makes sense, a very controlled indebtedness level as of the current situation.

Regarding to Tubarão Martelo, TBMT. What we are doing that at TBMT? Well, TBMT is producing about 5,800 barrels per day. And what’s happening at Tubarão Martelo field is the campaign — I’m not sure we should call it revitalization campaign. It’s not a true revitalization. What’s happening is the connection of a new well at Tubarão Martelo. We will remember that Tubarão Martelo has 3 producing wells, and there are 3 wells not producing. One of these wells that are not producing had an ESP failure, so it’s in downtime. And the other 2 wells left that never produced anything. Of these 2, 1 of them will start producing. And this failed ESP will be replaced. There will be a production increase. Our expectation is that we will see a production increase.

I think it’s too early to say what the production will be, but it will definitely improve from 5,800 barrels a day. That well that had the ESP pump failure produced, if I’m not mistaken, 700 barrels a day. So when it starts up again, it will produce more than that because it’s been a long time in downtime. And then the new producing well, that’s the unknown. We expect that it will begin with a similar production to the other producing wells, but it’s difficult to give you an exact number.

In the end, we have well 10 the last well. It should be connected when we connect the Polvo FPSO to Tubarão Martelo FPSO, the OSX-3 FPSO. I’ll turn the floor to Nelson to speak about the Board of Directors and about governance.

Nelson Queiroz

This is Nelson. About governance, we have a board that has been for a while contributing a lot to this story of value creation, so they’ve been contributing a lot. But the mandate of the current board will end soon in the next shareholders’ meeting. So when we have anything on that, we’ll communicate the market. But stay assured that we attuned to the best practices, and we are open to suggestions on many fronts, actually. So shareholders and investors can make their own suggestions. We are always very open to suggestions. And when they have something more tangible on this, we’ll communicate to the market. Thank you.

Christian Audi

And I have one last question. Going back to M&A. We see the Brazilian market with the Brazilian BRLdepreciating, the stock exchange increasing. So it’s a very interesting dynamic for the Brazilian market considering the Latin America dynamic. Do you feel that these M&A opportunities are better or increasing or getting better now compared to the middle of last year? And how do you see competition for these opportunities? As you mentioned, you mentioned mature producing deals. Do you think that the opportunities are increasing but perhaps there’s more competition for those assets, how do you see this dynamic in terms of M&A opportunities and competitors competing for these assets?

Unidentified Company Representative

Well, Christian, regarding M&A, what we see is that in the past, in the beginning of the process that happened in 2018 and I mean, the beginning of the Petrobras divestment program when they said it’s pretty mature fields for sale, we thought that there was perhaps a “pent-up demand”. There was more competition consequently. And then the first three deals happened [indiscernible], Bauna and the third one is — so now the outlook is the landscape is competitive, but we don’t see a pent-up demand anymore. So it seems that things are more rational now.

Now from the standpoint of possible M&A opportunities, I’m not going to detail any target specifically, but we see good opportunities in Brazil. And we’re excited about the move by many new operators in the pre-salt. And in addition to Petrobras, there are many new operators targeting the pre-salt. Although PetroRio does not work with exploration, we see this movement with good eyes because these large companies, they will use their balance sheet, their expertise for exploration purposes. They will find magnificent fields in the pre-salt. And most likely, the fields they’re operating now will possibly be divested, which is a fairly similar move to what is happening in the rest of the world, very similar also to what’s happening with Petrobras. So what we envision is a brighter and brighter future from the macro standpoint.

Operator

[Operator Instructions]. Next question is from webcast by Claduio Obericko [ph].

Unidentified Analyst

Despite the exceptional performance of the company, the data profile is very much concentrated on the short term. Considering that the company’s business model considers M&A opportunities and that you will need a lot of CapEx looking forward, what are the company’s plans to change the indebtedness profile of the company?

Unidentified Company Representative

Claudio [ph], thank you for the question. I think I tried to address this point when I answered Christian’s question, but let me rephrase that. You’re right, how that is concentrated on the short term albeit with very attractive interest rate. But yes, the majority of the debt is a short-term debt. So to have CapEx available and to enjoy M&A opportunities to begin, the company has a very strong cash generation. In addition to cash generation, we have 2 other tools. One, to be where we recall — reprofiling of the debt. In other words, elongating the debt. That means issuing bonds, it could be a bond with a Norwegian Law or a bond with a U.S. law, which will be the traditional 144A and that issuance would refinance the debt. In other words, exchanging short-term debt by longer-term debt. And then the cash generation of the company which is strong would become even stronger because we wouldn’t have to serve our debt obligations in the short term, but more towards the long term. So that is one possibility.

The second possibility has to do with equity, either with our treasury shares. Today, the company has a little over 6% of the shares — of all shares in our treasury, so there is this possibility. And also a possibility of a follow-on depending on the opportunity that presents itself to us. Our main point is that we want to keep a net debt over EBITDA ratio close to 1 to 1.5x, which is a level that we believe is ideal for the kind of company that we are that requires CapEx and that needs — and that has enough muscle to enjoy M&A opportunities.

Operator

Next question also from webcast from Deiogo [ph].

Unidentified Analyst

What about the revitalization campaign at Tubarão Martelo that was being conducted by Dommo and they didn’t complete it? Are you going to complete it?

Unidentified Company Representative

Deiogo [ph], well, the revitalization campaign at Tubarão Martelo it’s called — as you mentioned, the rehabilitation campaign. It’s actually a connection of two wells, one of the well used to operate in the past, and there was a failure in the pump. So we are doing a work over. And the second well is 1 of those 2 wells that never put were into operation. So that campaign is being done, it’s being executed by Dommo. Of course, because of the deal, we have been informed of what is happening along the rehabilitation campaign. But the campaign is being executed by Dommo. Dommo is the operator of the field. They’ll continue to be the operator of the field until we get approval from ANP. So the campaign is ongoing and this oil will be part of the production of these two combined wells.

Operator

We are now closing the question-and-answer session. I would like to invite Mr. Nelson Queiroz Tanure for his closing remarks. Go ahead, sir.

Nelson Queiroz

Well, thank you very much for your interest in the company, for your questions. On our end, we think that 2019 was a very positive year. We overcame challenges, we delivered consistent results, and we start 2020 on the right footing. I’d like to thank all investors for your trust. I’d like to thank all of our employees, you are very important for everything we do, the operational team, the corporate team, we all carry the banner here. We are moved by blood, sweat and tears and will continue to be like this.

And finally, regarding Tubarão Martelo deal, I would like to thank everyone from Dommo and BAF Capital and Prisma because they dedicated a lot of time. We worked long hours, sometimes overnight, we were all very focused to complete this deal that has been very positive for both parties. Thank you very much.

Operator

This does conclude PetroRio’s conference call for today. Thank you very much for your participation, and have a good day.

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