Earnings Release of 2nd Quarter 2019

We are pleased to report on Enauta’s key operating highlights of the second quarter, including
the results of two producing assets, positive developments at the Atlanta Field, and ongoing
interpretation of data and preparation for the upcoming exploratory drilling program in the
Sergipe-Alagoas Basin.

 

Activities in the Atlanta Field continued to exceed our expectations, positioning Enauta for continued growth. Total second quarter production from Atlanta reached an average of 12.8 kbbl per day. This
primarily represented production from our two first wells, and includes nine days of production from our third well, which came on-line in late June. This third well took the place of one producing well, which was taken off-line for pump replacement operations. The third well has exhibited excellent reservoir features and great initial flow, with production exceeding 15 kbbl/d, and has maintained the same production capacity throughout the whole month of July.

 

The Company expects average third quarter production from the Atlanta Field to increase considerably from second quarter levels. Intervention operations in the first well are expected to be completed in the next several days, at which point we will begin operations to replace the second well’s pump. Based on our schedule, we reaffirm the expectation that all three Atlanta wells will be in production in this year’s fourth quarter.

 

Another important development at the Atlanta Field was approval from Brazil’s National Agency for Petroleum, Natural Gas and Biofuels (“ANP”) to formalize the transfer of Dommo Energia S.A.’s
(“Dommo”) interest in the BS-4 Consortium to its other members.

 

In the second quarter, average daily natural gas production at Manati Field dipped to 2.8MMm³ per day, in part reflecting eight days of a planned maintenance shutdown in the period, but mostly related to lack of demand.

 

We continued to work closely together with our Consortium partners ExxonMobil and Murphy Oil in our six Sergipe-Alagoas Basin blocks, to plan out a drilling program that is expected to commence as early as the second half of 2020.

 

As part of our strategy to optimize our portfolio, we continued with the farm-out process related the two blocks the Pará-Maranhão Basin, in which we hold a 100% interest.

 

To sum up, we have entered the second half of 2019 with the expectation for continued positive  performance. Our Atlanta Field is  progressing on budget and on schedule and will be an even greater contributor to revenue and operating cash flow as we move into this year’s second half. Positive news from recent discoveries in the Sergipe-Alagoas Basin has further reinforced our confidence in the potential for our exploration success in these blocks. Additionally, we continue to study the possibility of participating in the upcoming ANP bidding rounds that are scheduled for October and November of this year.

 

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