Material Fact | Closing of Papa Terra Cluster Acquisition

3R PETROLEUM ÓLEO E GÁS SA (“3R” or “Company”) informs its investors and the market in general that, on December 22, 2022, the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) approved the transfer of 62.5% stake in the concession rights over the Papa Terra production field (“Papa Terra Cluster” ), held by Petróleo Brasileiro S.A. (“Petrobras”), to 3R Petroleum Offshore S.A. (“3R Offshore”), a subsidiary in which the Company has 85% interest.
As a result, 3R Offshore completed the acquisition of the Papa Terra Cluster and will take over the operation of the asset as of December 23, 2022. The value of the transaction, excluding adjustments, summed US$ 105.6 million, divided into (i) US$ 6 million, paid upon signature of the acquisition agreement, in July 2021; (ii) US$ 9.6 million, offset on this date with the accumulated cash generation from the operation since July 2021 (effective date of the agreement); and (iii) 11 contingent installments that can reach up to US$ 90.0 million (or US$ 80.4 million, discounted from the remaining cash generation), which are conditioned to the reference price of Brent oil and operational performance of the asset between the completion date of the transaction and December 2032. As provided for in the contract, on this date, as adjustments, the amount of US$ 18.2 million was also paid, referring to the balance of oil contained in the FPSO (produced on a date prior to the effective date) and inventory of materials and equipment that will be transferred to 3R on today’s date.

The transaction provides for the transfer to 3R Offshore of the portion held by Petrobras in the asset, as well as the entire production infrastructure and associated subsea systems, among which the following stand out: (i) the FPSO (Floating, Production, Storage and Offloading) P-63, which has only been in operation for 8 years and has a high oil processing and storage capacity, as well as the flexible lines and subsea equipment that connect to the FPSO; and (ii) the P-61 unit, a TLWP (Tension Leg Wellhead Platform) type platform, which has only been in operation for seven years. Both units are nationalized in the context of Repetro-SPED and in full operation.

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