Enauta has R$ 2 billion in cash to buy assets

Source: Valor Econômico


By: André Ramalho



Décio Oddone takes over Enauta with the objective of recomposing the portfolio and expanding the oil company’s performance


Enauta’s new CEO, Décio Oddone, has assumed the company’s command with around R$ 2 bi in cash and promises to go shopping. The oil company is disposing of one of its only two operational actives – the Manati natural gas field, in Bahia – and will seek to recompose its portfolio. Until then focused on deep waters, the idea is to broaden its horizons and look “without restrictions” at other business opportunities, such as the mature fields for sale by Petrobras.


“It can be onshore, shallow water, deep water… We had a greater focus on deep water in the past that we are expanding,” said Oddone to Valor.


Coming from a period of mandatory quarantine, after resigning from the general board of the National Petroleum Agency (ANP), Oddone assumed the presidency of Enauta a month ago. He succeeded Lincoln Guardado, who led the company for eleven years, in the period in which the oil company, then Queiroz Galvão Exploração e Produção (QGEP), began to operate in deep waters and opened capital. She was the last oil company to do such an operation in the country, in 2011, in a transaction that raised R$ 1.5 billion.


Enauta is controlled by Queiroz Galvão (63%). Quantum’s investment fund owns 7% of the company and the other 30% of the capital is freely traded on the stock exchange (free float).


Until then, the company had been keeping its distance from Petrobras’ mature field sales program. Oddone, however, says that the company’s strategy of concentrating on deep waters was conceived in another market conjuncture, when there was not the amount of production assets available for sale as there is today. It is worth remembering that the state-owned company intends to fully exit the onshore and shallow water operations and, more recently, signaled that it will sell large mature post-salt fields, such as Albacora, in the Campos Basin.


“This moment that we are living in Brazil generates opportunities for Enauta to think about doing things that it did not do in the past,” he said.


The financial situation, according to Oddone, allows the oil company to buy more than one asset – and some field of “a little larger size”. The intention of the company is to be an operator, but to enter in business with partners. He stated yet that Enauta has not a production goal to be reached. “Our goal is not volume, it is profitability”.


The executive says that the company does not discard itself to make acquisitions. The decision of the company, which has total debt of R$ 230 million, will depend on the analysis of “case by case opportunities. The oil company has to receive the last parcel (US$ 144 million) of the sale of its 10% in Caracará, on the pre-salt, for Equinor; and US$ 560 million for the sale of its 45% in Manati, for Gas Bridge – business still pending conclusion. These values will help to compose the cash available for acquisitions, of around R$ 2 billion, already discounted the investment commitments.


With the exit of Manati, in final phase of useful life, Enauta will have an operational asset: 50% of Atlanta, in the post-salt of the Santos Basin. The dependence on a single source of revenue is a concern. In August, just after the disposal announcement, UBS, for instance, lowered company’s stock buy recommendation to neutral and reduced the target price of the paper from R$ 13 to R$ 12. The papers closed yesterday at R$ 10.36.


Oddone declares that Enauta aims to be an independent oil company “more relevant”. The company is used to figure on the ranking of the ten greatest oil producers of the country and is the second greatest Brazilian producer of private capital, behind PetroRio.


The executive highlights that the priority is to buy operational assets, but that, in the future, Enauta may diversify business. Today it only acts on oil and gas exploration and production. “Further ahead we will study, yes, the diversification in the chain, but it is not the priority now,” he said. “[The theme of energy transition] is something that any energy company that thinks about the long term has to consider,” he added.


He also said the company is doing a general review of the Atlanta full development production system, to make it more resistant to a scenario of lower oil prices. Only after this work it will hire the platform that will operate on the asset.


Due to technical failures, Atlanta production fell 44%, from 25 thousand barrels/day in the second quarter to 14 thousand barrels/day in the third. Oddone says that the production should be normalized soon. According to ANP, the field has produced 20 thousand barrels/day.