Today’s outline
Potiguar Deal Conclusion
Downstream opportunity
Execution is key
Industry M&A Activity
Valuation
Last week, the sell-side visited some of 3R Petroleum's (RRRP3, “3R”) assets in the Potiguar Basin, including O&G fields in the Macau cluster and the Guamaré Industrial Complex (“GIC”).
Even though it’s not a surprise, most takeaways we heard were positive, especially regarding the Potiguar facilities’ good conditions, surprising a few analysts.
Top management, including Pizarro (CFO) and Diniz (Chief Offshore Operating Officer), and several production managers.
So, it was an excellent opportunity for investors to learn more about their track records in other mature LatAm assets and the revitalization of onshore fields.
The main takeaways were positive, and analysts could see some recent achievements, as we'll mention in the post.
Still, 3R’s challenges to delivering the entire production curve (2P) embedded in its certification reports over the coming years are significant.
Nevertheless, the amount of low-hanging fruit to be reaped in the ST may also be bountiful, supporting the de-risking of the investment case and the stock’s re-rating.
Potiguar Deal Conclusion
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