Research Update: Petro Rio Outlook Revised To Positive From Stable On Larger Scale With Albacora Leste Acquisition; 'B+' Rating Affirmed

Brazilian oil and gas exploration and production company Petro Rio S.A. announced its acquisition of the Albacora Leste field from Petrobras, which significantly increases its scale, adding production of about 30,000 barrels/day and net proven reserves of more than 240 million barrels. The acquisition has a fixed price of $1.951 billion that we think Petro Rio will finance mostly with existing cash position and internal cash generation, which will weaken its liquidity. We expect controlled leverage, with gross debt to EBITDA between 1.5x-2.0x in the next two years. On May 3, 2022, S&P Global Ratings revised the outlook on Petro Rio to positive from stable. At the same time, we affirmed our global scale 'B+' and national scale 'brAA' long-term

...- Brazilian oil and gas exploration and production company Petro Rio S.A. announced its acquisition of the Albacora Leste field from Petrobras, which significantly increases its scale, adding production of about 30,000 barrels/day and net proven reserves of more than 240 million barrels. - The acquisition has a fixed price of $1.951 billion that we think Petro Rio will finance mostly with existing cash position and internal cash generation, which will weaken its liquidity. We expect controlled leverage, with gross debt to EBITDA between 1.5x-2.0x in the next two years. - On May 3, 2022, S&P Global Ratings revised the outlook on Petro Rio to positive from stable. At the same time, we affirmed our global scale 'B+' and national scale 'brAA' long-term issuer credit ratings on the company. We also affirmed the short-term 'brA-1+' national scale rating. - In addition, we affirmed its '##-' issue rating on the senior notes with a '2' recovery rating. - The positive outlook indicates that we could...

Research Update