QGEP announces changes to its exploratory asset portfolio
QGEP Participações S.A. (BMF&Bovespa: QGEP3, "Company", "QGEP") announced today that it has allowed its farm-in agreement
at the BM-C-27 Concession, in the Campos Basin to expire, and has relinquished Block CAL-M-312, in the Camamu-Almada Basin.
The BM-C-27 Concession, which includes blocks C-M-122, C-M-145 and C-M-146, was part of a farm-in agreement announced in November
2012. QGEP signed an agreement with Petrobras for the purchase of a 30% participating interest in the production and exploration
rights. The eventual transfer of participating interest is still be subject to the approval of regulatory entities. The Concession
is located in the shallow waters of the Campos Basin.
The decision not to renew this agreement came as a result of a technical and economical assessment of the asset in relation
to the Companys current portfolio. Higher costs, combined with increased risk determined though a reinterpretation of seismic
data led the project to being less attractive when compared to other assets in the Companys portfolio. The arrangement established
with Petrobras did not require QGEP to disburse any up front funds for its participation in the blocks. Under the terms of
the agreement, QGEP would carry part of the drilling costs at Guanabara Profundo prospect.
Regarding Block CAL-M-312, part of the BM-CAL-12 Concession, the first Exploratory Period expired on 12/31/2014. The Consortium
decided not to proceed with the second Exploratory Period, which would have had a one year duration, and would have required
a commitment to drilling a well. This decision was made due to the low attractiveness of the Block, as established in technical
and economic studies. The Minimum Exploratory Program (MEP) of the first Exploratory Period of the Block, which included the
covering of its entire area with 3D seismic data, was completed in full. Queiroz Galvão Exploração e Produção S.A. has a 20%
participation interest at Block CAL-M-312, Petrobras is the operator with 80% and EP Energy has the remaining 20%.
The Consortium of the BM-CAL-12 Concession will continue with its exploratory activities at Block CAL-M-372. The time clock
for the first Exploratory Period has been suspended, and the Consortium is awaiting the issuance of an environmental license
to drill the well that is part of the MEP committed in the Concession Contract.
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