After having closed 2022 with positive results for $7,874 million, General Fuel Company (CGC) is carrying out a strong investment plan in the areas where it operates and that is being financed with funds that the oil company obtained from the financial and capital markets.
It is a company that is owned by the holding company led by Eduardo Eurnekian and that has its core business in the hydrocarbon sector.
It is controlled by Latin Exploration SLU, a Spanish company of which the also owner of Corporación América is the majority shareholder with 70% of the capital, while the remaining 30% is in the hands of Sociedad Comercial del Plata (SCP).
Eurnekian bought CGC from the investment fund Southern Crossof Norberto Morita in 2013, when, for US$200 million, it was left with the majority shareholding of the oil company that participates in the energy sector, specifically in the exploration and production of oil and gas (upstream) and in gas transportation.
CGC is also one of the two largest shareholders of Transportadora de Gas del Norte (TGN), together with the oil company Tecpetrol, owned by Grupo Techint.
Currently, it is carrying out an expansion process from the obtaining millionaire funds One part of the proceeds from a syndicated loan with Industrial and Commercial Bank of China (Argentina) for US$96 million that must be repaid with compensatory interest on the balances pending payment at a fixed annual nominal rate of 6.50% that will be payable quarterly basis. While, the capital will be paid in five installments payable between October 2024 and the same month of 2025.
Eurnekian bought CGC in 2013 from the Southern Cross investment fund led by Norberto Morita
productive project
In addition, the oil company issued several series of Negotiable Obligations (ON), with which it obtained another US$120 million that it also allocated to its commercial strategy, applying all the money to the development of oil reservoirs. low permeability “tight” of the Magallanes formation and the expansion of the productive area of the basin via frontier exploration.
These projects are being financed with Class 22 ONs for US$20 million that mature on September 17, 2024, and Class 23 ONs for US$100 million that also expire next year.
In a note sent to the National Securities Commission (CNV), CGC’s board of directors explains that the company applied “the entire net proceeds from the placement of the ONs to finance a medium and long-term productive project in its assets of the Austral Basin in the province of Santa Cruz, under its investment program to develop natural gas reserves during the 2021/2022 period.”
The report includes information that arises from the company’s internal records as of March 29 on the status of application of the net proceeds from the placement of the ON and a description of how the productive project is.
In the case of the ON Class received US$119 millionapplying all of said funds to the development of “Tight” reservoirs of the so-called Magallanes Formation.
Regarding investment in drilling, 17 new wells were drilled in the El Cerrito block, three of which were horizontal; another 13 in the Campo Indio Este block, of which three were also horizontal.
In the capital market, the oil company obtained just over US$120 million issuing Negotiable Obligations
Meanwhile, a new well was drilled in the Campo Boleadoras block, as well as another in the El Puma block, while six were drilled in the El Cerrito Oeste block, of which three were also horizontal.
On the other hand, With respect to the investment in facilities, US$32 million was allocated, whose main application was the laying of a gas pipeline between the El Cerrito and Campo Boleadoras Oeste blocks and the construction and retrofitting of batteries, mainly in the El Cerrito and Campo Indio areas. This.
In the same way, for the expansion of the productive area of the basin via border exploration, the company allocated another US$9 million that was applied to the drilling of an exploratory well in the El Cerrito Oeste block.
Optimize finances
In line with these actions, the efforts regarding financing They will continue to focus on optimizing the capital structure, as well as on the search for additional sources of financing, based on the investment objectives and growth of the company.
In 2022, the company had already defined an investment process for US$300 million with the objective of addressing projects for the exploitation of wells for the production of gas and energy.
This money will also serve to maintain the new plans, despite the fact that it achieved an adjusted EBITDA with dividends received corresponding to the year 2022 that amounted to $43,262 millionwhich represents a decrease of $23,435 million compared to the year of 2021.
The purchase, in June 2021, of 100% of Sinopec (now CGC Energía SAU), is also part of this expansion process, taking into account that with this operation it was left with shares in hydrocarbon exploration and exploitation areas located in the Cuyana and Golfo San Jorge basins, also allowing its income to increase $5,370.9 million, representing a 3.8% increase, going from $141,920.4 million in 2021 to $147,291.3 million last year, mainly as a result of the consolidation effect of these assets, partially offset by lower incentives (Resolution No. 46-E/2017) accrued in 2022 for $25,775.5 million.
