Maha Energy AB

STO:MAHA A

Earnings Call Transcript 2023-Q3

[Kaarlo Airaxin]

[Foreign Language] Kjetil, Guilherme, good afternoon. I believe you are in Venezuela, not only because you told me, but you're flying the Venezuelan flag, I can see. Please walk us through this eventful quarter. The scene is yours.

[Kjetil Solbraekke, executive]

Well, thanks a lot. And well, good morning, introduced in Caracas. And as you know, that's where we have recently done a significant move, getting an exclusivity to take over a part in PetroUrdaneta.

So I will spend quite some time to go through a bit more rationale behind this thing so that our shareholders can understand a bit more of the background and how we see this going forward and using the knowledge that we have been able to gain so far with the work we have done in Venezuela and, of course, then going through the highlights of the rest the portfolio. And then towards the end, Guilherme here will take you through the numbers on the results.

So as was introduced, my name is Kjetil Solbraekke. And if we go to maybe the first -- yes, we have a disclaimer, which I think you all should spend some time on. This is just who we are. And since this is the first time for me to give this presentation, so maybe I'll just leave it there some time.

I've been working for the Norwegian government in the Ministry of Petroleum, been working for Equinor and Norsk Hydro and been CEO in Panoro and Sintef and DBO and also in the Board. And we founded 3R together with partner, with Starboard and where Guilherme had his career. And Guilherme here has also a fantastic background, more into financing and banking, had worked as a partner in Starboard for a long time.

So very pleased to be here. And it's the first time I'm going to present the quarter for -- on behalf of the company. And I'm very happy to be in this position and go through this presentation.

So let's go to the first. So this is basically where we are currently. What has happened over the last 12 months is that Maha has been through really a transitional change by basically selling, and this has been said several times, we have sold some of the core assets that we had in Brazil onshore, not in a way -- you can say not an easy decision, but it was -- I think it was the absolutely right thing to do. There were several challenges left. And I think we sold it at a very good price.

We're going to continue to work on Oman. I'm not going to say a lot about Oman today because we are just days before or weeks before we need to take a final decision. And that will be press released once we are having -- once we have taken those decisions. So I'm not going to talk a lot about Oman today. Then of course, the last on the page, well, we had the DBO coming in. And the last one is the new [ deal ] we did in Venezuela, which I will spend quite some time in describing.

And through this, what we have today is a company that has a very strong cash position. We have also the same production as we used to have before we started this work about a year ago. And we are really ready and we have worked hard over the last year to position ourselves for the growth opportunities. And we think Venezuela now, I would say we had some luck with the timing. We've worked on the deal for more than a year.

And even though we think we are good, we are not that good that we could predict what happened with the sanction. And they were released just a couple of days after we actually signed the agreement and just the day before we made the press release. So anyway, fantastic journey, what has happened over the last 12 months. And as I said, we are positioned now to go forward.

We've also done significant changes in the organization. I'm not going to go through that in this [indiscernible]. But basically, we have now a very strong team that are dedicated to further growth and that understands the assets we are now looking into. I will comment a little bit back to it, that team.

Okay. So at the glance, we are still, as I said, in the same countries, then with the new addition which is Venezuela. We are still producing in Illinois. And I will give a slide a little bit later, just an update on that. And we are -- I mean, the main production fields now is the Peroá gas field and the Cangoá gas field and the Papa Terra heavy oil field in Brazil. We do have a nice continued production in Illinois. And the total production, as I already indicated, is more or less in line with what we had a year ago.

Reserves and resources. Of course, here, you can see the potential magnitude of what we are doing in Venezuela, its enormous resources available. And this is all this potential that we see in Venezuela with the concrete deal we are looking at into and also other things we believe that can be done.

So maybe then let's go to the next and start a bit on explaining really what we try to do here in Venezuela. So first of all, a bit of the macro picture. I think this is fairly well known to people that Venezuela has more reserves and oil resources than potentially or most likely and according to many analysts than any other country in the world. So we have -- so we see that there is -- I don't know what happened here. Yes, so basically, sorry, we just had a -- you can't see the picture here anymore. Can you see it from Stockholm?

Okay. So what we have seen over the [indiscernible] in the production rates could argue that they have reserves for more than 1,000 years, so enormous amount of reserves. There's oil almost everywhere in the country. But of course, they have been through difficult years. They have been through the last period of sanctions. And this has taken it down to a production today of less than 1 million barrels per day.

So what we, of course, see is that this is on a macro level. And of course, it's also reflected in the micro. We see that the fields that should produce several, several times more that are basically almost not producing today because of lack of equipment, lack of maintenance. And this is why we think this is so interesting to be here.

There is little doubt about the oil in place and the reserves. It's all about actually being able to put together a decent plan and to start working on this. And that's basically what I think the government has realized, that we need to have a collaboration with international players in order to attract capital so that they can restart the economy and restart the focus on oil production.

So let's move to the next one. So what we show here is basically the fields that we now have acquired an exclusivity right to basically take over what equals 24% of these. I'll come back to the [indiscernible] but I'll come back to you with a couple of details on that. These fields are west of Lake Maracaibo, which is on the west side of the country. And these are huge fields and with more than 8 billion barrels of oil in place, which is a number you can find in several places.

And then we have worked a bit now to try to understand also what has been produced historically. And we believe it's something like 60% of the total resources in these three, four fields that we -- is in this cluster which is called PetroUrdaneta. And we believe that approximately 16% of these reserves has been produced so far. This is, of course, a very low number. And I'll come back to that afterwards.

And what we have understood is that we believe and seen numbers on this that we think there is as much as 500 -- approximately 500 million barrels of remaining oil in this reservoir. And that would even take the recovery factor up to a lot more than kind of 21%, 22%. So we are still talking quite modest numbers.

There's also significant gas remaining in this reservoir. As a whole region, it used to be rich on gas in both Colombia, and you had also gas in Venezuela being produced. And you had, of course, the big gas production in Trinidad. So gas has not really been the same focus.

So we think here, there is also significant volumes of gas which up to now has been produced by the government. But we think this also represents a huge upside to now focus also into the gas production. So that means the total reserve potential here of something like in the order of 700 million barrels of oil and gas equivalents.

As you see, this is west of Lake Maracaibo. Of course, what we are doing now is to go through the whole area. And we have people already in the area. And to really understand in much more details than also what I can go through now, what is really -- what needs to be done here to take the production up from the current level of just 1,000 barrel.

So this is being worked on and also analyzing everything from environmental challenges and so on so that we know exactly the status of how it is today before we start working on increasing the production and putting our footprint on the ground, so to speak. So I think this shows, in a way, the huge potential in the area. And we are super enthusiastic about starting working on these fields.

Here, this kind of shows that this is all built, so yes, when -- before I was born. So this started producing before the war and had a top production but also very productive wells. So this gives you some indications also that this is actually a quite good reservoir. But of course, it's been producing for a long time, so there is very little energy left in this reservoir.

So the challenge here for us will also be working in two directions. I think, first, our focus will be to basically prove that we can start already next year to increase the production. And that will be done not then focused upon how much we are or how much reserves we can ultimately get out but basically prove that we can increase the production with a couple of thousand barrels, that we see the whole system works, that we can work within the framework in the country. And I'm very positive that we are currently in good discussions with the authorities on how we can do this.

It's not -- this is not clear yet. That's why I can't go into any details. But we are discussing licenses, ways of getting into the field to start working as soon as possible. This is in the country's interest and, for sure, it's in our interest also to show that working in this environment now is doable. And we already have a quite clear idea on what needs to be done. And as I said, I will come back to that once we are ready.

But you see also on the right-hand side, of course, and maybe I should not put -- make so much number out of it. But with 8 billion barrels of oil in place, there is a lot of reserves that can be produced when you have only produced 1.4 billion. We think that we can easily take this up to a high level of percentages. And PDVSA previously estimated that there should be at least 22% reserve or recovery factor in these fields.

Can we go higher than that? Well, let's wait and see. I think that's not the main focus right now. But I'm showing this just to show that there is a huge potential even if we -- if you are not taking the recovery factor more than 18%, 20%, it's a huge potential. And we have projects here for many, many years going forward on how to take more oil out of the ground. Every percentage that we can increase the recovery factor ends up in 80 million barrels. That's simple math. So the potential is there, no doubt.

We go to the next one. So I think it's all about the people who can really do this job. So I'm very, very happy to announce what we have already in place. And we've had these people in place for some time already. Javier Gremes is a very experienced CEO from Perez Companc and also from TGS.

It's not the TGS that many people in the oil and gas business knows about but Argentinian company. He is an Argentinian. He has worked as a CEO for Perez Companc and been operating in Venezuela previously as Perez Companc, also used to -- when Perez Companc was bought by Petrobras, so he also had a career in Petrobras.

And Reinhard Gros has been also another senior expert with a lot of focus on big projects and also on subsurface. So he's assisting Javier in this early phase now. And we already have a team in Venezuela with Venezuelans starting up working, some of them in Maracaibo. So we already have people on the ground where we currently have the assets.

And they are already now -- and as we speak, they are in Maracaibo trying to map out what we need to do, what is the most imminent improvements that has to come in place for us to increase the production. So we are very pleased to have onboard Luis Osorio, Eliana Alvarado, Javier Rios and Amarilis Bermudez.

So these are just the start of what we are building up. I think with these people already on the ground, we already now have a lot more insight into the challenges than what we otherwise would have. But as always, we need to get approvals from the authorities in order to get started, so -- but at least with these people, we know where to look. We know what to look for and we know how to start already.

So we go to the next one. So a little bit more about the transaction as such. So we have actually now paid EUR 4.6 million for an exclusivity period. And here, there are some timing issues that could create some doubts, and I will clarify. Because we negotiated this deal over a year, as I said. And of course, the focus at that time was a lot linked to how to get the OFAC license and how to deal with the sanctioned regime.

And that's why we signed an exclusivity agreement with first 9 months and then with a potential to add 12 more months of the exclusivity period in order to make sure that we could receive OFAC license in peace and quiet, so to speak, not being rushed, not having to take any unnecessary risk in relation to receiving this license.

We had good reasons to believe that we would get such a license because we looked at what happened to Chevron. We also have activity in the U.S. And so the idea was basically that we would spend time making sure that we could get an OFAC license and work like any other American company in this region.

Now this has changed. And of course, this simplifies our work. There are still remaining big challenges. But now our challenge is much more on the technical side, on the project side, which we would have anyway. But for the time being, we think that the sanctions are -- at least now, they are lifted for the 6 months. And I'm sure there will be lots of questions on what's going to happen over the 6 months, which basically I cannot give you any certain prediction.

But I will say that all the talks I have with [indiscernible] tells me that at least what they believe and international [indiscernible] these sanctions are here to stay and that we -- there could be challenges. There could be some changes. But basically, that people don't believe that there will be kind of a situation where we go back to sanction regime they had before they were lifted some weeks ago.

So does that mean that we're now going to spend a lot of money before this 6 months is over? No, not necessarily. First of all, we need a lot of time to prepare for the project. And we need to get licenses and someone in place with the authorities. So I think this altogether will move nicely ahead hand-in-hand.

So this explains a bit of this 9 plus 12 months, where we would pay another EUR 4.6 million to potentially then prolong the exclusivity period. We believe now that we can close this sooner than 9 plus 12 months and basically start up working into this project much faster.

So the total price then because then there is an earnout linked to how much production we will, have 3 million, 5 million and 7 million barrels. Upon reaching these production levels, we will pay another EUR 18 million. So altogether, we are paying EUR 27 million for this stake, which is 60% of the PetroUrdaneta, 60% of the company B in PetroUrdaneta, which equals 24% of the field, which is the field then with 8 billion barrels of oil in place.

So you can see here, this implies some multiples. And of course, this is very favorable to our company that we can actually come in a situation where we can add reserves of less than $1 per barrel in this place. And then again, yes, we haven't done our own reserve reporting yet. We will definitely, I think, not start on realizing all this 500 million or 700 million barrels of reserves.

We will go step-wise. The first thing we're going to do is to try to make sure that we can prove to the market, prove ourselves, prove to the authorities that we are able to increase production, gradually take it project-by-project and then demonstrate that the model works. And then I think down the line, we can also start working on the really big plans on how we can significantly increase this production and increase the recovery factor to benefit for all the people in Venezuela and for the company.

There, was I done? So I think this covers -- yes, basically -- yes, also like has been mentioned by many other companies, there is also here a significant credit in the sense of unpaid dividends from PetroUrdaneta. So we have about $150 million, which is unpaid credit, that also we can use in this sense. And that will give the priority to kind of payments back to PetroUrdaneta, back to the company B, that brings the new cash into the deal.

Okay. So this is just to -- not because I want to -- Maurel & Prom is a great company. But it's not here because I want to talk very nicely about them, even though they -- I'm sure they deserve it. But they recently sent out a press release, and you can find that yourself, about getting permission to start working on their fields in Venezuela. And this deal is another example of exactly what Chevron has achieved already and shows that the government is now -- they have realized that they need to have these foreign companies coming in and actually take more control over the operations in order to increase the production.

So what we look at is a model which will be similar or very similar to what Chevron or what Maurel & Prom has. And we see that this is the direction that the country has realized that they have to -- what they have to do is to give the opportunity to the foreign companies that comes in to operate and to be in charge of the operating companies in order to make sure that the investments are used how they should be used and that we have the right focus on the project in order to increase the production.

So this, I think, is very promising that we see not only before the sanctions were lifted but also after the sanctions was lifted that the company -- that the country continues this movement. And this is also what we hear from the authorities that, yes, we understand you need to be in control. And yes, we will find out a way where we can work together. We're inspired by these deals that has been offered to Chevron and Maurel & Prom.

So lastly, maybe cannot be said too many times on how to work in Venezuela, how we work anywhere. And I would underline working anywhere. Because I think, yes, there are -- it's more bureaucratic. There are more uncertainty around how will Venezuela now work. And there are lots of stories about things that doesn't work.

So we will be super clear on how to work, super transparent and with the highest regards on corporate compliance. Without this, we don't have any business case in this place. I think this is well understood. I think it's well respected by anybody I have met so far at this place.

So of course, we are here to also contribute. The situation in the country has been super difficult. And so very high on our agenda is also how to actually do good in where we are, what kind of projects, what can we do in order also to make the life slightly better or somewhat better for people that are in the local community near where we are operating, near where we're doing the project.

This is important for us to create understanding and goodwill for the company doing the operations, and simply being good citizens in the country where we have been invited to increase the production. So this is very high on my agenda. And personally, I'm going to be involved in making sure that this is the path we follow.

Okay. So I think this closes a bit on the Venezuelan efforts that we are doing. I would say again, the potential is enormous. The reserves, there are no doubt about the reserves and the reserve potential. And there is also no doubt about our commitment into doing this in a very responsible and transparent way going forward. Then I need a bit of water.

So going then a bit quicker through things you know a bit more about. We have released the latest production that we have [indiscernible] participation in Papa Terra. I know Papa Terra rather well. I was part of negotiating the contract. We've been in the data room and so on. And everything that happened there so far, I think, is basically more or less what we had expected. So we have seen -- I'll come back to that on the FPSO.

What we have seen is wells that have been disconnected, and we are now connecting them. There is a rig on site that are basically now doing workover. And we will do the first new well later in -- yes, in 2024. And we have very high expectations to both the workovers, where we -- it's very predictable, and also the new well, which is basically a copy of the well #7.

And we think that this company will be better because it's also based on the results that we have in the PPT-50 and 51. So the well design is slightly different. And we expect to have even better results out of this well. So this, I'm very comfortable about.

I think when it comes to the reserves here, I think this is another area where you have 2 billion barrels of oil in place in Papa Terra. So far, we have produced 2%, 2.5%. So the [indiscernible] is enormous. I think in the current plan, and correct me if I'm wrong, Guilherme, but I think we are just above 10%, 11%, 12% of the recovery factor with the [indiscernible].

So I'm expecting to see much high numbers coming out of Papa Terra. But again, that should also be done gradually. I think there's no point in rushing to drill several new wells on the same time. I like the approach that we are doing and -- well, I was in the Board, so I participated in outlining the strategy. But I think going fairly careful forward, drilling wells that we're very comfortable to drill.

But as I said, the goal for this license should at least be in line with what you have in Peregrino, which I used to be responsible for developing, and which is the same type of quality of oil and so on, where they have a recovery factor of 18%. So I think that we will see a lot of additional projects coming out of this field going forward.

So this shows a bit on what we expect on the activities in new wells and basically then also the operational efficiency of the FPSO, which has been an issue. We knew that when we bought the field that there would be a backlog on the maintenance of the FPSO. And as you see on the right-hand page on the graph there that this has been significantly improved already. And we believe that this is something that we can continue to improve.

I would generally say that if you have a problem in an FPSO, it's a big machine that can be fixed if it's -- if you know what to do, so to speak. What cannot be fixed is what comes from Mother Nature, which is the reservoir. So what we see here is, of course, that the reservoir is actually delivering very nicely, very well.

And what has been the issues in Papa Terra is the machine. And now the machine is partly already fixed. And I think within the time frame they are indicating within '24, I think they will be much more comfortable about having this FPSO up and running with normal regularity.

Peroá is a very simple gas field. It's a big gas tank-producing well. When we see the variations of production from month-to-month and quarter-to-quarter, this is not related to reservoir, any uncertainty on the production and productivity of the wells. This is simply how much is being lifted in the gas take-or-pay contract with Petrobras.

So basically, if the customers are not for 1 month demanding of the gas we can produce, we are producing less. So here, there is also a huge additional resource called Malombe. And we should spend much more time really on talking about Malombe, which has huge reserves of gas. And the operator is now working on the timing for the tieback. And we'll revert to that within 2024.

This Illinois, we are currently drilling some wells that will again take this production back up. This is, [indiscernible] after the well startup and then the production drops very quickly. We are now drilling three new wells in the area. They have all seem to give -- at least proven quite a lot of net pay, which basically is where you have the oil-bearing part of the reservoir.

So we are fairly optimistic on looking forward to see the results of these wells. It's not going to change the company, but it's a nice addition. In times where the oil price is high, this gives us a payback quite quickly. So this is a nice, important part. And I'm super proud of very few people inside Maha that are basically doing the work in Illinois. They deserve all credits possible. For me, I was there just a month ago and super impressed with their efficiency and the way these guys are working from up there.

So this, I think I will not say anything about. I think we have talked a lot on Oman previously. There will be a press release later this month about our final steps. And since this is not decided yet, I will not spend time in going through any of the details, or I don't have any details to share with you on that.

So this is basically just kind of assuming -- or taking the numbers from the reserve report that basically 3R has on the fields of Papa Terra, Peroá and Malombe. And we have significant embedded increase in production going forward on this -- from these fields. So we have not, of course, included anything from Venezuela here, which will come on top of what I hope can already be realized in 2024. But we'll come back to the timing on potential production in 2024 when we have the necessary approvals, when we have the plan approved and so on. And this will be press released in due course.

Yes. This, I think, I don't need to spend so much time on. I mean, it's what we are doing. We try to work hard in everywhere we are. We think getting increased recovery factor from the existing fields, working hard with the operator, 3R, which I think is doing an excellent job in increasing the recovery factor. I think that we together will be even more aggressive on raising this production, looking at the areas we're already in around these fields that we have.

And of course, what we call these bridgeheads, well, Venezuela is the name for that now. I think we are super proud of the work that has been done in order to get us in the position where we are. And now it's up to the technical project teams that we already have working on this to identify exactly how we can take this potential and create return for the shareholders.

So with that, I think I hand it over to you, Guilherme?

[Guilherme de Campos, executive]

Yes. Thank you, Kjetil. Well, you covered all the interesting and exciting news for us. And as usual, I will share the highlights of the Q3, the financial results that the company achieved.

And it is, in some way, pretty similar to Q2. Yes, Q3 is still a transition quarter. As you can imagine, as we consolidate all these new investments and the strategy we are doing, we expected to have a lot of change going forward. So what I'm going to share with you is basically the highlights of our company going through a massive transformation.

And Q2 from Q3 is not very different. And we have had a few items that happened during the quarter that impacted our financials. And I'm going to disclose what those were and the key implications for our P&L and then for our balance sheet.

So starting with the income statement. We had similar production from Q2 to Q3. We have now Peroá and Papa Terra producing the majority of our volume despite it not being directly reported in our financial statements. So the results from 3R Offshore, it impacts our EBITDA but after revenues and after production. Since we have a 15% stake and we are not directly into the asset, this is important to understand our financials. We just report that after revenues and cost, it comes as a result in affiliate investments.

So the pro forma production is good. We are close to 2,000 barrels per day and similar to last quarter. And that led to a revenue, a net revenue of $1.2 million. That is also similar to last quarter. As we grow the asset, especially Papa Terra, and we finish the campaign of a new CapEx in Illinois, we expect this revenue to and this production to increase in the future.

In terms of EBITDA, we had a better quarter than last one, than Q2, basically because now we have the first full quarter of 3R Offshore being consolidated into our financial statements. So we have around $1.6 million, $1.7 million of results that come from our stake in 3R Offshore. And that improved a lot our EBITDA. Previously, last quarter, we had just 1 month or less than a month of results being incorporated, given the date we closed the deal. And so we expected this quarter and then following quarters to have 100% of our share being consolidated. That's very good also.

And finally, for our net income. We had, this quarter, one transaction that closed. That was actually the sale of our LAK asset also in the U.S. So this was a nonoperating asset, we had tried to develop it previously. It was shut-in, in 2020 during the pandemic. And it was not operating anymore since 2020. We had a good transaction that we pursued to sell the asset, basically to get rid of all the commitments we had there and liabilities.

But we had to write off the remaining of the value that we had in the balance sheet. So it's a totally noncash impact. But we had a $2.4 million losses that we had to recognize during the quarter. So that's why you see our net income much worse than our operational results. So we finished the quarter with minus $3.4 million in net income. But it's majorly an impact with the Illinois sale.

So basically, in terms of operations, we are in a transition. We are -- we have sold our biggest asset in Brazil. Now we have a lot of cash, I'll get into some details of our balance sheet going forward. But we need to deploy this cash to create more operational results that will completely change our P&L going forward. For now, we are [indiscernible] small operations and a lot of cash to deploy. And that was a reflection of our P&L.

We have small operational results that tries to break even with all the corporate and G&A and other costs that we have. And we are having a lot of G&A costs, especially given all the M&A pipeline that we are working with. We have a lot of lawyers, consultants and new divisions going on, as you can imagine. So we expected that investment that shows in our P&L as expenses to return a lot of good results going forward. It's totally aligned with our strategy.

I'll just give some other highlights on our income statement. We had, for this quarter, lower financial expenses. As you know, Maha had taken a lot of debt in the past. And now we are trying to amortize this debt according to the schedule. So quarter-after-quarter, we have been amortizing our main bank debt. So this was no different. And this is leading to lower financial expenses, so expect that to keep reducing going forward unless we do some other financing for M&A activities. But that's not been something for the very short term.

And for our financial revenue, on the other hand, we are increasing that. As we got the last installment of the sale of the Brazilian asset during Q3, now we have more cash than ever sitting in our balance sheet, and. This is deployed for financial income. In Q3, we had a very good investment that led to this $4 million financial results. Q3 is $1.3 million basically because we -- just here it's fixed income. And we expect this level of financial revenues going forward. So in terms of financial results, we are almost breakeven. The cost of our debt is now equivalent to the financial revenues that we have.

And the final change in our financial highlights is that we have now a full quarter of investment in associates. As you can see in Q2, we had just $450,000 of results. Now we are close to $1.7 million coming from 3R. And that's expected to further develop as we complete the workovers, the maintenance and increase the operational performance of the assets at 3R. So that is a summary of our financial statements. We have a lot of more details on the full report that you have access to, and happy to take further details and talk to the market.

For our balance sheet, as I mentioned, we have more cash than ever. During Q3, we got a $55 million installment from the sale of the Brazilian assets. And now we have -- a portion of this cash is locked in some escrow accounts. So basically, it's a bank guarantee for the loan that we have and for some procedures regarding the sale of the Brazilian asset. It will be released as some milestones are achieved.

And on top of this $142 million in cash that we have, we also have around $9 million in financial investments, basically a bond that we issued for 3R Offshore. So we are above $150 million in [indiscernible]. We are committing a small portion of that for the Venezuela transaction.

But we are looking for other opportunities to deploy this cash to keep growing our asset base and to look for sustainable and good cash flows from our operations in the future. So really exciting time. We are already a very good portfolio but just getting started. The plan is to look for other interesting partnerships or investments and to strengthen our asset base and our results for shareholders going forward.

Finally, the impact all of this in our stock. This is a very long following-up of our prices related to the brand. We have been [ higher ] in the past, some expectations that were. But for the last few years, we are in an interesting period. We start to see some changes in the stock. Now we are back to around $10 -- SEK 10 per share. So we expect to see the market team keep paying a lot of attention to our strategy to what we are doing and to see good developments in the future.

So that's it. I hope you enjoyed the presentation. And now back to you.

[Kaarlo Airaxin]

Well, thank you, Kjetil and Guilherme, very thorough and granular. And I think that we managed to answer a lot of questions that have been sent in before. Because as always, we always have a lot of questions.

But I have one here from the chatroom, and that's a financial question. When do you estimate to achieve positive cash flow, given current share price?

[Guilherme de Campos, executive]

That's a very fair and important question. So for the cash flow, we have -- basically, the majority of our production comes right now for the 3R Offshore. And we don't have access to the revenues. We just have access to the dividends that are distributed by the company. So we don't expect the dividends coming very soon from 3R Offshore because they are using the operational cash flow to fund a portion of investments that they need to do for all this growth that is happening in the company.

So we expect to reinvest all the cash flow for the near term. But as we finish that and as we started to have cash flows coming from other assets, we do expect to have a very strong and sustainable cash flow for the company. And for now, we don't need cash. But we have more than plenty of cash for several years of operations if we don't deploy it. So we have a really, really big headroom.

But we will look for opportunities to have cash-producing assets and operations going forward. So for now, we probably will be negative in cash flow. But we expect to turn that in the future. We are not in a hurry. We are here for the long term. We have a very good strategy for the medium, long term. And I hope you stay with us on this journey.

[Kaarlo Airaxin]

Excellent. And that also answers the questions regarding the dividend. But can I use this as a segue? And you're referring that you had $200 million or $150 million in cash. So are you now an acquirer? Or are you a driller, i.e., will you invest these money then in the production? Or will you look for further opportunities?

[Kjetil Solbraekke, executive]

I think that, as our strategy, I think kind of answers that already. I think that we are, I would say, both. Of course, we, through the position we have now in 3R, of course, it's -- what's going to happen next year is basically that we'll spend significant amount to do workovers on the three wells I mentioned and to drill one new well. And so yes, we are, in a way, participating in exciting drilling projects.

What we do in IB is also related more to maintaining our current situation. And I think what you do in IB is typically, again kind of mentioned this, it's a traditional onshore play. But the oil prices are high. It really pays off very quickly to drill new wells. And should it drop, I think then you will start thinking about it. It's almost like a cash management situation, what we have in Illinois. So yes, I think it's likely that we'll also prepare for drilling there.

And then of course, in Venezuela, this is a place where we do see lots of other opportunities. And you can say do you have the courage to do more? And I would say yes. I think what we -- what I see here, I'm very encouraged by what I have met. I meet people from the government. I meet people that are also linked more into the opposition. I think it's -- what I see is a very unified people. And of course, there are extremists here as well.

But I think that there is a core of people really now in the government and opposition that really wants to, point number one, improve the conditions in the country. And then I think they are really eager, and I think we have been welcomed fantastically by the authorities. I think they really see a company like Maha that potentially could play a fantastic role in this. And there are room for many, many companies.

Once they realize what's going on, I think there will be lots of companies coming in here. Of course, we have an advantage of being here early, which, I think, give us a fantastic standing. I think we have impressed again people we are meeting with our move. And this, of course, gives us some advantages. So I think we are in an excellent position to do more. But we have to evaluate that project, each one standalone. It should be with an upside. It should be something we are comfortable that we can do.

I think we have an excellent team. We have already discussed with the team -- I have already discussed with the team how we can step up and do more projects in parallel. But it's always going to be important for us to do it in a transparent way, know what we are doing and working together with the local industry in order to make sure that we control this 100% ourselves. Then I think we have great opportunities there. So yes, we are both a driller and also a project developer.

[Kaarlo Airaxin]

And if so, then obviously it's good to have a war chest, which you apparently have. We have received some questions regarding Oman. But as you said, you will be issuing a press release later, so we will stay tuned. So basically, the next news flow from you, will that be Oman? Or will that be Venezuela?

[Kjetil Solbraekke, executive]

Well, I think as we have explained to the market that we have an extension of our next steps or an extension of the EPSA in Oman until the end of this month. So even though I do think things are moving fast in Venezuela, I would believe that the next important news flow about any project, yes, could very well be linked to Oman.

[Kaarlo Airaxin]

Okay. Excellent. And with that, I thank you, Kjetil and Guilherme, and also all the viewers, and particularly those who have forwarded questions. And have you not received an answer, then please forward this to Maha. And with that, thank you.