Dallas, Texas 05/27/2014 (FINANCIALSTRENDS) –Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) recently announced about the completion of formation test at its 1-SPS-98 well which is located offshore São Paulo. The company confirmed existence of good quality oil in the Santos Basin as evident from the test results. The well is at water depth of around 1,870 meters and the latest results confirm Petrobras’ discovery declared back in February 2013.Petrobras reached a depth of approximately 7,110 meters while drilling and found 159 meters pre-salt reservoirs.
Importantly, 1-SPS-98 is the first well drilled by Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) in the BM-S-50 block where the company is an operator and 60% interest in the consortium. Out of remaining 40% interest, 20% is held by BG E&P Brasil and 20% is old by Repsol Sinopec Brasil which is a collaborative entity of Spain’s Repsol S.A. and China’s Sinopec or China Petroleum & Chemical Corp (ADR)(NYSE:SNP).
The majority shareholder of the company, the Brazilian government has a history of political interference in the company’s corporate affairs which affects company’s performance given the government interests might not coincide with that of minority shareholders. Investment analysts at Zacks do not expect any change in such situation over the short term. However, the analysts expect the company to perform at par with the broader U.S. equity market over the coming months and hence maintain their “hold” rating for the stock of Petrobras.
Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) in the leading Brazilian energy firm engaged in exploration, development and production of oil from reservoir wells and shale. In addition to other energy related activities, the company also offers refining, processing and transportation of oil, natural gas and related products.
On Friday, the stock traded flat at closed at $14.91 without any change from its previous close. The stock traded with nearly half the volume of 11.24 million shares against its 30 day average trading volume of 22.29 million shares.