Barbosa, Raimundo, Gontijo e Câmara Advogados advised on the transaction
Alvopetro Energy Ltd. (TSX-V:ALV) finalized the required unitization agreement (UOA) and the unit development plan for our Caburé natural gas field (the 197(2) and 198(A1) wells).
Pursuant to the UOA, Imetame and Alvopetro have agreed to a comprehensive unit development plan. In 2018, two existing wells will be completed and tied-in to a low-pressure early production facility with an early production plateau of 150,000 cubic metres per day. In 2019, three additional unit development wells will be drilled and a high-pressure field processing facility will be constructed. All unit wells will be completed and tied in by the end of 2019 with a planned gross field production plateau rate of 450,000 cubic metres per day. Each party will be entitled to nominate for its working interest share of field production and for any natural gas not nominated by the other party. Once a party produces its share of 2P reserves they will no longer be entitled to any further production. Imetame is entitled to 100% of the early field production (allocated against Imetame’s share of proved plus probable (2P) reserves) and has agreed to fund virtually all of the unit development capital in 2018 and 2019. Alvopetro will pay for our share of these unit capital expenditures when we commence production, or in March 2020, whichever comes first. Unit operating costs will be shared by the parties based on monthly production delivered to each party. Alvopetro’s expects to start production allocations by the end of 2019.
Under the UOA, Alvopetro has agreed for Imetame (50.9% initial working interest) to act as initial operator. If Alvopetro’s working interest increases to over 50% following a working interest redetermination, Alvopetro may elect to assume operatorship of the unit. The first working interest redetermination will occur on the later of; 18 months after Alvopetro starts production, or December 31, 2021. The second redetermination will occur once 40% of the 2P reserves of the unit have been produced.
The unitization and the unit development plan are subject to the approval of the ANP.
Alvopetro Energy Ltd. is an oil and natural gas exploration and production company. The Company, led by Corey C Ruttan, Alison Howard and Andrea Hatzinikolas, acquires, develops and produces hydrocarbons.
Barbosa, Raimundo, Gontijo e Câmara Advogados advised Alvopetro Energy Ltd. with a team including Marilda Rosado de Sá Ribeiro (Picture) and Jorge Pedroso.
Involved fees earner: Marilda Rosado de Sá Ribeiro – Barbosa, Raimundo, Gontijo e Câmara Advogados (BRGC);
Clients: Alvopetro Energy Ltd.;