Maha Energy AB
STO:MAHA A
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Maha Energy AB
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Kjetil, Guilherme, good afternoon from a spring like Stockholm. How are things on your end? Kjetil, I believe you're in Brazil and Guilherme you are in Venezuela, if I'm correct.
That is absolutely correct. I'm in warm and fantastic Rio de Janeiro. Sorry to say to all the Swedish listeners, but that's how it is. I still managed to get a cold, so I will have to apologize if my voice breaks up a bit. Incredibly how you can actually get a cold in the warm and delicious Rio de Janeiro.
Yes, I am here in Caracas, again, just like last quarter, presenting our results from our most exciting endeavor at the time. So hope to -- that you enjoy the presentation today.
Excellent. Thank you so much, gentlemen. Well, Kjetil, Guilherme, please take it away.
Thanks a lot. So Guilherme, we will run the presentation and I will start out saying a little bit where we are now with Maha. We have passed through an exciting year. And so basically, first, going through the disclaimer here, as obliged by our lawyers and everybody. So now you are supposed to have read through it all. I'll take the presentation -- this is basically myself presenting and Guilherme later on, as we said.
So if we then go to the first page, we've been through a year with significant change. And I know that our shareholders, basically, there are several views on this. And I'm not going to comment on all that. If somebody has questions, feel free to ask. We have -- we came into the company together with Starboard in the very end of 2022. And we together here with Starboard, we have been basically been taking this decision that has put Maha where we are today. And we are firmly believing that this is the right path for the company.
So we have -- as we have said several times, we have sold what was the onshore producing assets in Brazil in the beginning of last year. We then later on, of course, merged formally DBO into Maha, getting back to having interesting production. But now this time offshore in Brazil. We will go through the assets again, as we have done before, and we think it's a good development. We have always looked at Venezuela as an interesting part. I will again talk a bit about Venezuela. As Guilherme said, he is in Venezuela now. We're building up the team and our presence in Venezuela but still at a modest exposure as we will highlight. We know Venezuela is a concern for many shareholders. And I can assure you that we are not sort of just jumping in there without any considerations. We're having a very careful approach into what we are doing, but we do see a fantastic upside in what we are doing in Venezuela.
In January this year, we finally had to leave the project in Oman. This has been a disappointing event for all of us. We have hopes that what was basically started up by the previous management had potential more in line with what they expected and it was a disappointment to find the results of the test, and we have basically now left Oman. We have an earn-out with the current structure with Mafraq taking over as the operator. Of course, in the -- this means that we have a significant write-off that are influencing the result, but we think it's the right decision to do for us, and we believe that we have much more value accretive avenues going forward with what we are doing in Latin America than what we saw in Oman. So we wish Mafraq all good, and hope that we can realize our earn-out if they are successful. And at least, we are able with this decision to focus on what we have at hand here in Brazil and in Venezuela.
Lastly, we did a very exciting move in Brazil. As some of you, I'm sure, know, 3R is a company founded by Starboard and DBO about 5 years ago and has had a very successful journey in the Brazilian market. We believe in a way that there are a lot of hidden values still in 3R. So we decided in a way to use the momentum when the share price was low and to actually go back into 3R. And so we'll go through a bit on why we have done this and the rationale for this move going forward into this year.
So all in all, the company has completely changed. There is only one asset left and a couple of people left from what Maha was. So we are a completely new company, a new strategy, a new way forward. And we, as the major shareholder personally also believe very much in what we are now looking at. And I think we'll see an exciting journey in 2024 and '25.
So turning then to the next page. What we are looking at today is still having our production in Illinois. We have our production in Peroa and Papa Terra. I'll go through a bit more on that. We have then done our investment into the 3R company, where we bought 5%, and we have our positioning in Venezuela as before. So there really the new thing here, if you look at the production graph is, of course, of the production going forward is, of course, the huge impact of the 5% in 3R. And so this is -- I'm going to spend a bit of time on what does this give us of opportunities.
And I -- we have been talking a bit and I think today, if we change to the next page again. So this tremendous increase in production that we see comes out of different areas. But most of it is basically now coming from the 3R acquisition that we have done and which is related to our existing assets. And just to explain very briefly what we are saying with the 3R. We have -- which is, again, a company we know very well. So you see, first, the current position is basically 3R Petroleum, where we have now after the acquisition of shares, 5% direct [ all legit ] into 3R. At the date of completing 5% acquisition, we sent out a letter to the market, basically explaining what our intentions were to go back into 3R. And we also have a 15% direct ownership into 3R Offshore. So we are already inside the company on the offshore part and now with 5% in the onshore. So our proposal is basically to separate the 2 business areas, onshore and offshore. We believe they are distinctly different. And we believe by merging 3 Onshore part with Petroreconcavo that we will create a fantastic company.
So I will go through it a bit more in detail, but we are creating a company here that has a potential, very quickly already, next year to produce more than 100,000 barrels onshore in Brazil at very favorable lifting cost commissions and also very favorable tax conditions. So this company, we believe, has a fantastic future. It will be a very efficient onshore giant in South America. And I think we are very proud to participate in creating this company. Offshore, where we already have 15%, we'll have another 5% through this acquisition. We believe there is plenty of potential also in the offshore part. But the main thing here is basically that we are separating the onshore and offshore. They are distinctly different, and they have both a very interesting avenue to create more value as we think a lot of value here has been hidden from the fact that some people are probably want only exposure into onshore. Some others were more curious on the offshore. Now we can actually see both of them in independent growth going forward.
So then on the next page, what I'd like to say is that we now have a situation where we have -- when you look at Maha, you look at basically 4 stepping stones to significantly increase the value from what we are looking at today. So one is, of course, embedded in the current portfolio, as we have talked about before, we have significant reserves. We have -- we think, with estimated net asset value of more than $150 million. We have a good cash position. We bought the shares in 3R. So all of this is kind of -- should by itself create or be a basis for a huge increase in the company value compared to what you see at the stock exchange today.
So that's the first kind of avenue to create or to have significant value compared to what we see. The other one is what we are then doing with our acquisition of the 5% of the shares that we are basically creating value on onshore consolidation. So again, we'll go through this in more detail. We believe this is a fantastic company that we will create onshore, and there is a few synergies and to take out of this.
Then the third avenue here is where we also believe there is a huge potential to create more growth and value is in the offshore area in 3R. So we'll go through that. And then, of course, the fourth avenue is the Venezuela Entry, where we have very limited exposure, but exposure into a fantastic market. So my idea now is basically to go through a bit of these 4 areas that independent of each other, we believe has significant potential to increase the value for our shareholders going forward.
So if we move to the next page, Guilherme. So basically, I love to talk about Papa Terra because it is a fantastic asset, where we have our 15% and now again, also the additional 5% with direct object into 3R. So this is an asset that has been kind of mismanaged by Petrobras, a huge backlog on the maintenance of the FPSO and the TLWP the platform where some of the wells are tied back. And this backlog led to a very low operational efficiency. So when we took over, we were down to 22%, it's gradually been increasing through '24 -- to 2023. And we believe or the operator now believes that we will go up to 80% within this year.
So this is so, of course, extremely important because you get the production from the wells and they need to be treated, separate, water, oil and gas on the platform before you can export it. So there has been several problems. I'm not going to spend time on going through all of that. But now we see that gradually, there has been a very significant improvement in operational efficiency and the platform is now up to running almost as a normal asset like this.
So this is a huge platform, huge capacity, and there is additional spare capacity on the platform, which I think, again, will also be important for value creation potential going forward. But in the near term, what is most important is the new wells and the work-over that are taking place. So here, these wells are producing with ESPs. So submerged pumps into the reservoir into the wells that are basically boosting production. And you need a well, you need a rig to basically do workover when these pumps are failing.
So the rig is now there, and it's doing work-over on these wells. And we -- as you see in the graph, in the fourth quarter, we have -- sorry about that -- we have increasing production from 22 and the 17 and the 12 well. And later this year, we are expecting to have the first new well being drilled. And I will say new almost in brackets because it's a copy of the seventh well that was lost by Petrobras. And so we are very comfortable about what that well will produce because we have seen it producing. So this is basically what comes out, what the well stopped with back some years ago, and we believe that there will be more production coming out of this than what we have here as a more conservative estimate.
It's difficult to know how much more you will produce because you don't know exactly how much the pressure will build up, but we know it's going to happen. So this means we are increasing the production into what we believe will be 25,000 barrels per day in mid-2024. I would also say for Papa Terra that there is -- this is a field with 2 billion barrels of point in place. And so far, we have produced less than 3% of that. I was manager for the -- or director for the development of the Peregrino field, where we expected a total recovery of 18%. I think the conditions for having -- these are quite similar reservoirs, quite similar oil. I think the conditions are better here to get even more out of this reservoir than we were doing with in Equinor with Peregrino. So there should be at least another 50%, 60%, 70% increase in the reserves going forward from this field.
So I think there is a lot more news to come. And I think this will be cash positive very soon. We have already good cash coming from this. Now this year, we are spending also good money to increase the production. Next year, there will be a very stable good cash flow coming from these assets. Papa Terra is a giant field, and we look forward to seeing that going forward.
Next page, on Peroa. This is a gas asset. We'll not spend so much time here now. The production now is more limited by the local market actually takes on gas as we have a take-or-pay agreement on new selling gas on that term. So -- but I do think it's fair to say there is potential here to increase production and increase recovery factor from both Peroa and Cangoa. This is being worked on by the operator. Malombe is already a gas discovery, which will be tied back to the existing infrastructure and the pipeline into the Cacimbas, this has also a significant production potential and it's a good investment. There is also prospects that are not drilled inside the BM-ES-21 block, which is now been also analyzed and to look at whether it makes sense to drill those as part of developing the Malombe. And I think it also makes sense, I mean, from Petrobras point, the Malombe discovery as such is much smaller than the huge area that they maintained. So this is just a sign that they also saw these additional prospects and they did not relinquish that part of the area.
And then on top of that, there will be tieback potential into this area. So this area -- this also has the potential to become a strategic hub for future development in the area. So there is a significant growth potential also in Peroa. I should speed up a bit. I'm spending too much time on talking about these lovely assets.
So go to the next page, which is basically then the second way to create value here. And this is why we entered back into 3R. So Petroreconcavo and 3R Onshore or 2 companies basically side by side. And here, the first thing is like combining this to companies will give you a local or a Latin American onshore giant. So of course, you have economies of scale by simply being larger. And the other great area is concrete synergies. As you see in the maps, these 2 companies operating door-to-door, door, next door to each other. So they are also partly using the same infrastructure. So instead of fighting over the same infrastructure, now they can unite forces and look at how to find more and increase oil production from these existing assets and reducing costs and the lifting cost even further. So this -- the concrete synergies here are significant and in the order of USD 1 billion.
So we believe this has a huge potential. We know there will be great synergies taking out -- to be taken out of these -- from these -- from merging these 2 companies. And then, of course, on the balance sheet, these 2 companies together will have a very strong balance sheet and can significantly increase their financial capacity by utilizing the fact that 3R has underlying expected growth, huge growth in the production, and Petroreconcavo very little debt in the first place. So combining these 2 together, creating the company of the size that we're talking about means that this -- the financial cost of the joint company can be significantly reduced.
So the next one, the offshore area is then the third leg, where we think there will be value creation potential, supported by Maha. So here, just to illustrate very quickly. I mean you have the PetroRio, which is the private -- publicly owned, but private not national company in Brazil, offshore and Latin America. And the other companies here, and they are producing 100,000 barrels and you have them, the other companies below that size, and they're operating barrels. And you see it doesn't need a lot of imagination here to think that there should be consolidation opportunities in this area where you could create another PetroRio and so on. So let's see who is willing to play ball. We think at least there is a significant potential for further onshore consolidation. And we believe, as I already went through, Papa Terra and Peroa are to super interesting hubs where they are and can be hubs for tying back other additional resources in the area. So we believe massively in value rate potential in 3R offshore and in the offshore in general in where these 2 assets are.
Going to the next one. So Venezuela, I think very few people, if any, has any doubts about the potential for seeing Venezuela, again, coming back to higher production, looking at what they have produced in the past and where they are today, we all know it's the country with more reserves than anyone else in the world. So I think nobody has any doubts about the potential. I think the doubt here is, are you really able to get the barrels out? Are you able to get money out of this thing? And people, I can understand, can be worried that you're going to sink a lot of value into this put a lot of investment into it and not get the return on these investments. So at least, I would say that we have a very limited exposure. So far, we are exposed at EUR 4.6 million. And the maximum exposure this year, we believe, will be EUR 9.2 million. Then we will spend some also money on, of course, the projects and having people there and so on. But this is really a very limited exposure, and we think the upside here is 10x what we are talking about of exposure.
So we believe Venezuela will come back -- we will not increase our exposure before we see that we can get the several type of contracts where we can control the investments that we are doing and where we can sell the oil that they are producing into the market. So we believe in Venezuela, but we do have a sensible, careful approach. We will make sure that we know what we are doing, and we know the exposure before we really go in with more capital.
So with this, I think if we got to the next page, Guilherme.
Of course, where are we today? The market cap, and I think nobody is very happy with where we are. And we see this is trading extremely low compared to most other companies. So basically, what you are having today is basically a valuation of the net cash investments. The shares we bought in 3R that has increased somewhat in value but will increase much more. The net present value of what we have in Illinois where we're actually producing quite well. We talked about in this presentation, but it goes without saying and the net asset value of the 3R Offshore. So with that, I mean, just the first leg of how to more than double the value is basically embedded in our existing portfolio. And we will become cash positive within this year going into next year. And then we have the value creation potential in the 3R Onshore, as I explained, which here is limited only to sort of what the synergies are. But taking this up I think there is significant value on top of this on the pure size and on more synergies that are the focus that this joint company will have on getting more oil out of this.
3R Offshore, same thing what we have here basically is the repricing value from the -- and the consolidation opportunities that we see in the offshore. Again, these hubs have huge potential to attract more value from tieback and other projects. So I'm a great believer in seeing additional value coming out of 3R Offshore. So this should put you in the range where you with very concrete measures, very identifiable measures that we should have a value of significantly above SEK 24 or SEK 20 per share.
Then, of course, the last thing is the option or the potential or the entry we have in Venezuela. I believe in it. But also, we're careful, and our exposure so far is less than SEK 1 per share in Venezuela. So we see really that you get a lot of options here for independent ways of creating additional value in these 4 bullets, if you like, to create additional value going forward. We believe in it, and I can assure you that we will probably have some questions on that later on as well. I believe that we will be in a position to start talking about creating a dividend in 2025. And it's not in my interest or anybody else's interest to actually have any share issues on the way to get there. So -- but we can take more of that on the questions later. I'm sure they will come. So we are ready to go into that. And -- but then I hand it over to you, Guilherme, to go through a bit of our financial situation.
Thank you, Kjetil. So you did a fantastic job explaining our strategy and most of what happened during the past 12 months. And here now to report what happened mostly during the last quarter and how it has changed since 2022 and Q3 '23 for the last quarter of the month -- the year and some implications going forward.
First, we will go through our P&L to explain the main drivers of the results that we got this quarter. So basically, as we progress with the investments in our operated assets in Illinois and in our stake in Papa Terra, Peroa we got our production increasing during the year. There were investments, work-overs, some maintenances and now we're capturing the outcomes of this good progress that we are doing.
So from Q3 to Q4, we can see an increase in 13% of production. And January has started well. We expected a good Q1 as more of our investment kicks in. For instance, in Illinois, we concluded a 2023 CapEx program. We drilled additional wells starting in Q4 and ending in Q1 '24. And we are already producing more than 200 barrels per day again versus a weaker Q3 and Q4 last year. So we expect to keep delivering on increases in productions in our asset portfolio [indiscernible] 5% stake in now in 3R that is much bigger than this. So we are very enthusiastic about our production profile going forward and happy with the results that we achieved in the month after month during the year.
In terms of revenue, we experienced a slightly lower revenue in Q4, mostly because of the declining on oil prices that were slightly lower net revenue, but it will, of course, fluctuate every quarter based on the commodity prices.
In terms of results, we ended the year with a negative net income. Q4 contributed with minus $500,000, so almost breakeven. The negative results that we see in the bottom line so far is basically the fact that we are preparing the organization for a lot of future growth and we are bearing most of the cost of restructuring and reshuffling the portfolio.
Now this year was a gigantic effort in M&A and in restructuring of Maha. And that deserves a more detailed explanation. So we will dive deep into our costs in the year so that we can explain to the market what happened and what we foresee for the future.
Giving a deep dive on our financial results. We are happy with what we achieved during the year. So the most important thing that we are declining our finance cost quarter after quarter after quarter. We ended Q4 with $1.4 million in financial cost, the lowest for the past history of Maha. So we are amortizing that and keeping a very disciplined leverage of the company. So we are very happy with the results controlling our financial expenses.
On the other hand, we now have a much stronger financial income, not as strong as in previous quarters when we had some extraordinary gains on our investments. But even with a more conservative investment portfolio, we still experienced a favorable financial income over previous quarters. What led us to almost a breakeven financial results for the quarter and for the year. So we are also very happy with these outcomes.
Going forward, since we deployed a lot of cash into the acquisition of 3R, the 5% stake, we will have a smaller financial income because we have less financial investments for the next quarter, but we still expect a very good result coming out of 3R so that will more than compensate this investment that we are doing.
And the third portion of our financial results here that is very relevant is our share of income coming from our investments. We have 15% of 3R Offshore and our share of their net income is incorporated in Maha's results, and it has also been increasing from previous quarters. So we achieved $1.8 million in our proportional stake in 3R. This is noncash 3R Offshore is reinvesting the cash into operation. There were no dividends paid from 3R offshore, but that also should be a reversal in the future as 3R and 3R Offshore stabilize their investments in the portfolio, and they start to pay dividends for Maha.
So with that, we covered our income statement highlights, but I would also like to focus on our cash balance and our cash flow for the quarter. And that was also a very predictable and good quarter in terms of cash. We ended the year with $121 million of cash in our balance sheet. In this, we have around $43 million that is restricted cash. Those are basically a collateral for loan with BTG that our key financial partner for financing our balance sheet and some obligations related to the sale to Petroreconcavo of our Brazilian assets in the beginning of the year. But most of it, over $30 million of the restricted cash is within a very manageable debt instrument with our key partner.
And the cash flow for the year, you can see that cash from operations variated slightly. We have a negative EBITDA, but we have interesting financial revenues and adjustments in the cash flow payable, accounts receivable. That led us to almost breakeven operational cash flow that good news for the quarter. And for the investment cash flows, it was very predictable. We did some investments in Illinois. As I explained, we have the drilling campaign of 2023 that consumed the majority of our CapEx for the year, and we still had some investments in Oman in the exploratory assets. So that's the balance of our CapEx for the year. Then we have basically the second big tranche is the financing activities that is basically the amortization of our debt that we pay quarterly and the interest associated with this debt that is very in line with the budget and previous quarters. So that led us to the cash consumption of the quarter in line of our expectations.
For the debt, we are reducing our exposure. We now have a $34 million in bank debt reducing 25% versus previous year, and we expect it to liquidate that as early as 2025. We would be a 0 debt company at this point. And with a very increased capacity for releveraging the company for any opportunity that we have. We do have this capacity right now, but as we amortize it to -- we get better. And also to refinance with potentially lower interest rates in the future to even improve our financial expenses.
In terms of total assets, here there is an important note. We have sold as Kjetil mentioned the Oman operation. It was not as fruitful as we expected during the initial passing in the beginning of the year, we realized that it will be a project that will require a lot of time and new investments to achieve success. So we still believe it is a positive project in the future. Therefore, we tied our asset to interesting earnouts of up to $12 million. But it's not in best interests of Maha to operate this asset during these 3, 4, 5 years until we get to commercial production to pay this -- to earnout. So that was a very interesting opportunity to sell to our current partner in Oman. And it's also important to highlight that during the year, in the beginning of the year, we sold 35% of Oman asset for more than $10 million in cash. And this helped Maha to avoid most of the cash exposure to the Oman asset during the year. So it was a slightly negative asset during the year in terms of cash commitment for Maha, and now we have an interesting exit opportunity.
But nonetheless, we had in our balance sheet on Q3, this asset in exploration and evaluation of around $27 million net asset, and we sold for $2 million upfront payment at closing. So these results in a reduction in our total assets. So now it's $201 million in total assets in the balance sheet. And we had to recognize an impairment of the $25 million different, that is noncash, but it will impact the discontinued operations' P&L that we can see in details in our Q4 financial statements.
All in all, for the shareholder equity, we created more -- almost 10% of equity during this year with all the change and disposals of assets and acquisitions and mergers that we did. So these were mostly accretive transactions, and it created a portfolio for further creation of value for the shareholders. So we are now in a better position than we started the year, and we have a much better platform to keep creating value going forward.
If you compare the portfolio that Maha had by the end of '22 and the portfolio that Maha has now, it's gigantic, the difference in growth potential that we have now and cash generation potential than we had in the past. So we are encouraged with this prospect and excited to follow all those projects going forward.
As I told you, I want to stop at our expenses for the year, just to give a highlight of what is going on and to have a maximum transparency with the market. So for this full year of 2023, Maha had around $9 million of G&A for the continuing operations compared to around $5 million from 2022. Then we dive deep to understand what was going on here. And 3 lines of activities that happened during the year explained most of the variation.
First, we have all these transactions that happened during the year. So we started the year farming out 35% of Oman. Quickly, we sold the Brazilian assets for north of $180 million. Then we have the business combination of DBO that is marketed -- more than $30 million transaction. We have the sale of our [ LEK ] asset. We have the signature of the binding instrument for a sale of the remainder of Oman during the year.
So if you combine all these transactions, we are talking more than $200 million of face value of transactions, and that led us to have additional M&A transaction fees that is basically legal fees, due diligence and advisers for all these transactions that Maha conducted. And if you compare this $2.6 million to more than $200 million in transaction value, it's around 1% of the total value. Anyone in the deal making business know that 1% is a very competitive expense when you look at the value of the transaction. And we achieved this efficiency by having an internal legal team and an internal M&A team that is very competent and very professional to conduct most of the heavy lifting of these transactions. But of course, we still use a lot of lawyers and financial advisers as required. So those are nonrecurring costs based on the transactions already [ diluted ] and the preparation for some new deals that we evaluated and didn't conclude, including deals in Venezuela that we're looking that also explain a small part of this additional cost for the year.
Then we have the one-off cost of restructuring the company. As Kjetil mentioned, we basically have just one asset left from the previous Maha and a few people that used to work there. And the major change we implemented was to close the headquarters in Calgary. So now we just have one employee based in Calgary and the office should be disposed very soon. And the team was relocated to mostly to Brazil. And this, of course, led to severance costs and some duplication of course, why we had to hand over from one management team to the other, a duplicated office costs and all of that resulted in around $2 million extra cost for the year. But it's, of course, nonrecurring. We don't intend to move back to Canada anytime soon or to any other location. Rio is the headquarter of oil companies in Brazil. It's the headquarters of 3R also. So we expect it to remain there for the foreseeable future. And now we have a team that is more cost competitive compared to a team based in North America, and we are excited also to keep pursuing other opportunities to reduce G&A costs.
And the third thing that explained a little bit of the difference for the year is the G&A that is relocated for CapEx and OpEx activities. In 2022, most of the team that is paid by G&A was actually deploying services for Brazil and for Oman. And so the cost was not captured SG&A. And as we disposed Brazilian and disposed Oman, these relocations of course, the relocations initiative in '23. So that explains a little bit of the increased G&A cost for the year. So if you get rid of this onetime expenses and try to have comparable cost to 2022, we believe we are around the same ballpark or a little less costly, and that's what we expect to have as a run rate for the near future. Of course, there will be one-off costs in the future, especially -- and when we pursue new M&A opportunities that will always lead to nonrecurring costs. But that's part of the business. We just wanted to highlight why we can experience such costs in the year and why we had a negative P&L for the continuing operations for the year, mostly explained by these one-off expenses of the year.
With that, we close the discussion on our financial statements, and I would do some final remarks, and I would invite Kjetil also to give his final perspective here.
But this was indeed a very transformational year for Maha. And our books does not reflect the potential that we see going forward. 3R alone is a very big investment, a very big batch that we did, and we expect a lot of good news and good results coming from the 3R project in the future, but we do have other exciting opportunities in the plate.
We ended the year with a very solid cash position. We deployed a good portion of this cash for the 3R acquisition in the Q1, but we still have a lot of cash remaining. And we are deploying this cash in very good assets. So if we need to raise some debt or to use more cash for financing opportunities, we are very comfortable in reaching this additional cash. So we are very happy with our capital structure and balance sheet going forward. And we still have almost $40 million in earn-outs to capture in the next years, potentially, $12 million for moment and the balance for the sale of the Brazilian assets to Petroreconcavo.
And finally, we do have this platform for inorganic growth with the acquisition of Petrourdaneta, meaning a very bold first mover opportunity that Maha is pursuing with limited exposure at this time, and it can open the doors for a lot of nice opportunities and the consolidation of onshore and offshore in Brazil, that will also open a lot of opportunities for Maha.
So very interesting year, quite different quarters. Every quarter, we had a lot of new things to comment and to account for, and we are looking for more exciting quarters coming in the next year. Kjetil?
Yes, I don't think I would add much to this. I think we should jump into some Q&As. I think if anything, I think we are now more or less are really done with the restructuring of the company after we came in. The company is now a different company completely than what it was. We believe, as we said, we have at least 4 independent ways forward that potentially will create significant value. And I think personally, I think more than what the company is worth today, each one of them. So I think it's an exciting future we're looking into, and I look forward to lead the company in this year and forward.
Excellent, Kjetil and Guilherme. Thank you very much. Conscious of time here. I will focus on a couple of questions that have come up as regards to dividend and so on.
But it's my understanding that you do aim for a dividend. And one of the questionnaire is, will it be a token dividend or a majority of free cash flow? How would you decide the dividend? Have you even considered that?
I think this is a discussion that, of course, we need to have properly with the Board and so on. My point is that personally, I'm a significant shareholder. I think 80% of my personal wealth is in Maha shares. So it's in my own interest that we are, of course, getting towards having a dividend payment. So exactly how and exactly when, I think, needs to be discussed broadly in the Board, but I think it's natural to see that happening in 2025 in one way or another. And I think that's my aim to put that forward for the Board and then let the proper organs in the company to take those decisions.
Well, fair enough, and quite crystal clear here. There has been a lot of comments, which are related to the share price and the way going forward. And the simple question is, why not share buybacks?
No, I think that's a very -- it's an excellent question. And I think along with the dividend and so on, I think that's very natural that, that comes up. And I without anticipating exactly what will be decided by the General Assembly, my ambition is that we will at least put that forward for the General Assembly in this spring so that we have at least the right to buy back shares. So as we don't have that today. So that's something that needs to be decided by the General Assembly. So that is my mission that will put that forward for those to be -- for that to be decided.
And at the end of your presentation, Kjetil, if I recollect correctly, you didn't really see any reason for a share issue in the near future. Was that correct? Understood?
Yes. Again, here I am. I'm like I said, 80% of my personal wealth is in Maha shares. And I don't have a huge pile of money to buy new shares. So it's in my personal interest to make sure that we are realizing the values that we see in Maha today without adding more capital into the company. So of course, I report to your Board and -- but there are no plans. I don't see any need. I think what Guilherme went through is -- shows exactly that. We have a good position. So there is no like secret plan on how to -- we could do something here to benefit some shareholders or anything like that. There is no plan to have a share issue. We don't need it, and it's not in my personal interest to do it either.
Excellent. I thank you for that. And I will have one final question, and that's a comment on the expected consolidation time line, and I think that's pointing towards the onshore and the offshore let's say, separation. When do you think that you have consolidated those 2 pillars, so to speak?
Well, I think the first thing that happens now and the most important thing is, of course, that we sent out a letter and we have asked the shareholders of 3R for their confidence and that -- and we'll take them board positions in 3R. That's going to happen on the 20th of March. Then we have a quite ambitious plan. We think that these things for the -- in respect of all the people working there, day and night to produce all the petroleum they are producing.
I think in respect of all those operations and so on, we should do this quickly. And that's already in alignment with, I think, everybody involved. And it would be natural then you, of course, have to give time for the authorities to give their approvals and so on. I think it's natural to have an ambition on at least closing all this within the end of the third quarter this year.
I think that's a natural ambition to have, including all government approvals [indiscernible]. So that means we have to work fast. We have to get the formal agreements in place between Petroreconcavo and 3R and then later on also between Maha and 3R Offshore and then move forward. And I think it's realistic to say that within the third quarter, we should be able to have everything close.
Excellent. Thank you for that, Kjetil and Guilherme and thank you for everyone who asked questions. And I have to draw all of you who asked technical questions about barrels per day and different fields to forward those to the management. And with that, I thank everyone for a very thorough and interesting presentation. Thank you.