Boston, MA 01/13/2013 (wallstreetpr) – Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) is keen on improving its oil production. The company has been selling its non-core assets to finance a boost to its production levels. And even there is already something to show for this effort. The company revealed that its production increased by 8 percent between January and November 2013 compared to the same duration in 2012.
We can see that this reported production increase happened when the company was just getting started in its efforts to boots fuel output. It thus means that now with a lot having been done in terms of raising capital towards the same, production can be expected to grow at a much faster rate this year.
PBR operates in a unique environment in which it has to balance its production and prices to make profits. The company had announced that boosting production would be an important step towards its profitability. For this, the fact that it is winning in this front comes as good news for investors.
Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) is taking varied approaches to raise money for its various investment plans. The company is currently divesting in low-margin or high-risk markets. Also, it is selling bonds to raise money. Last week it raised about €3.8 billion in euro denominated bonds.
The company is expected to make another offering in British pound denominated bonds later this year. Note the company got overwhelming demand for the bonds offing to its fat rates on the bonds.
Analysts say PBR was wise to print the bonds now to ensure the company’s ability to meet enormous demand for capital while avoiding any possible market turmoil that might arise as a presidential and general election campaign begins in earnest later in the year.
That PBR is increasing its refining capacity gives it an edge to cut losses and compete effectively with big U.S. oil companies. The company boasts of vast oil reserves and this is the reason its profit-increase expectations looks real by most measures. The general improvement of the Brazilian economy also adds to the positive prospects of the company.
With the stock trading at near decade lows, it offers a perfect buy opportunity for investors who are patient enough to seen the company grow as it is widely expected.