Yesterday, an EGM in 3R Petroleum (3R) approved the proposal to elect Paulo Thiago Mendonça (chair of Maha’s board) and Fabio Vassel (board member at Maha) to the board of 3R. The number of seats was also reduced to five from seven, meaning Maha now holds 40% of the seats on 3R’s board. Paulo Thiago Mendonça has also taken office as a member of 3R’s Finance Committee.

In an open letter to 3R’s board after purchasing 5% of the company’s shares, Maha has suggested a carveout of 3R’s offshore assets and a business combination with PetroReconcavo, another listed Brazilian company with onshore assets. Both 3R’s onshore assets and PetroReconcavo’s assets will experience significant production growth in the coming years, with considerable synergies being created by adding 3R’s and PetroReconcavo’s assets. Due diligence and technical evaluation of the portfolios are ongoing, and the parties aim to conclude these swiftly. The original ambition was to finalise and execute definite agreements during Q2, with the intention of closing the transaction during Q3.

Trading at close to half of current assets’ NPV, with significant potential upside to NPV