Petroreconcavo (RECV3) Q3 2024 earnings summary

Executive summary

• Net revenue reached BRL 850 million in 3Q24, up 3% sequentially and 14% year-over-year, driven by higher oil prices and stable production at 26.4 kboe/day; net income was BRL 159 million, up 17% from 2Q24.

• EBITDA was BRL 439 million in 3Q24, down 2% sequentially but up 16% year-over-year, and BRL 1.24 billion for 9M24, up 20% year-over-year.

• Dividend of BRL 379 million (BRL 1.29/share) distributed in 3Q24, with a 14.5% annual yield.

• Advanced key projects, including the final investment decision for NGPU Miranga and commissioning of the PR14 rig, supporting future growth.

• Strengthened logistics and midstream capabilities through new oil flow routes, MOUs with port partners, and operational resilience initiatives.

Financial highlights

• Record net revenue in 3Q24 despite a 5% decline in Brent prices; 9M24 net revenue up 14% year-over-year.

• Free cash flow reached BRL 891 million in 9M24; cash position at BRL 1.5 billion after debt amortization.

• Lifting cost increased to US$13.77/boe in 3Q24 due to higher well repair spending and exchange rate effects.

• Net debt/EBITDA improved to 0.52x, with net debt at BRL 775 million, 12% lower than 2023.

• Average cost of debt reduced to 6.74% after debenture issuances, with duration extended to 4.5 years.

Outlook and guidance

• NGPU Miranga project approved with US$60 million capex, targeting operation by end-2027.

• Acceleration of drilling and workover programs to support reserve development in 4Q24.

• Ongoing development of new oil flow routes and midstream consolidation to enhance commercialization flexibility.

• Lifting costs expected to decline as efficiency improves, though recent increases were due to operational resilience investments.

• Dividend policy remains flexible, based on free cash flow, investment needs, and M&A opportunities.