A von Altendorf

Petrobras: Extremely Overvalued

So we understand each other correctly, the Tupi-Carioca gas plays are subsalt, roughly 20 million years older than Campos turbidite sands. You recognized the issue of maturation. Are PBR engineers fibbing? In some respects, yes. Cartoon subsalt strata and faults drawn on a 2D line. "Variable reservoir quality" as a euphemism for low permeability and dolomite. Shell bowed out. If Exxon is in, let's wait and see what they report next year, if anything.

Petrobras has to find new reserves. I estimate they have 6-7 years recoverable (at 2 million boe per day) in Campos, no meaningful opportunities onshore. That's why PBR went on a shopping spree for deepwater rigs, and I think they plan on funding exploration with a bond issue, since they have a slightly negative cash flow. Most brokers and bankers call PBR a safe bet. I'm sure they'll get whatever cash they need.

BTW, mag and grav tell us basically nothing.