Brava Energia (BRAV3) Q3 2024 earnings summary

Executive summary

• Merger of Enauta, 3R, and Maha Holding completed, creating a leading independent oil and gas company with integrated operations and a diversified portfolio across upstream, midstream, and downstream segments.

• Achieved average daily production of 58 kboe/d in 3Q24, with 81% oil, and strong onshore resilience despite offshore maintenance impacts.

• Strategic plan finalized, focusing on core assets, portfolio rationalization, and over 130 initiatives to improve operational efficiency.

• Completed Atlanta farm-out (20% to Westlawn for US$309 million/R$1,287 million), generating a non-recurring gain.

• Management priorities include resuming Papa-Terra production, launching FPSO Atlanta, and capturing merger synergies.

Financial highlights

• Q3 2024 net sales/revenue reached R$2.19 billion, with oil accounting for over 89% of revenues.

• Adjusted EBITDA was R$727 million in 3Q24, with margin improving to 33.2% (+5.7 p.p. YoY); net profit was R$498.3 million, reversing prior losses.

• Lifting cost averaged US$20/boe (US$17.9/boe excluding chartering), with further improvements from offshore assets.

• Cash position at quarter-end was US$1.2 billion (R$9.49 billion), supporting robust liquidity.

• Capex in 3Q24 totaled R$1,566.2 million (US$283 million), mainly for Atlanta and Papa-Terra.

Outlook and guidance

• FPSO Atlanta first oil expected imminently, with additional wells to come online through 2Q25.

• Papa-Terra production resumption and ongoing maintenance to support medium-term growth.

• Focus on capturing merger synergies, optimizing portfolio, and reducing lifting costs to enhance free cash flow and returns.

• Production at Manati expected to resume in 1Q25; Parque das Conchas acquisition completion anticipated in 1Q25.

• Anticipated strong cash generation and deleveraging in 2025, with potential for increased dividends and share buybacks as leverage targets are met.