Petroreconcavo (RECV3) Q4 2025 earnings summary

Executive summary

• Net revenue reached R$ 3.2 billion in 2025, down 3% year-over-year, with natural gas commercialization and operational resilience partially offsetting oil price declines; annual production averaged 26,500 boe/day, up 1% year-over-year.

• EBITDA for 2025 was R$ 1.4 billion, down 12% year-over-year; Net Income was R$ 638 million, up 46% year-over-year, but fell 58% quarter-over-quarter in 4Q25.

• Operational stability and resilience were supported by technical advances in drilling, reserve development, cost optimization, and midstream asset acquisitions.

• Strategic initiatives included acquisition of 50% of UPGN Guamaré/Brava Energia's midstream assets, expansion of gas commercialization, and new logistics agreements.

• Social impact projects benefited 21,000 people, with recognition in B3's Dividend Index and Great Place to Work.

Financial highlights

• Net revenue: R$ 3.2 billion in 2025 (down 3% YoY); R$ 704 million in 4Q25 (down 10% QoQ).

• EBITDA: R$ 1.4 billion in 2025 (down 12% YoY); R$ 295 million in 4Q25 (down 16% QoQ); EBITDA margin: 45.7% in 2025.

• Net income: R$ 638 million in 2025 (up 46% YoY); R$ 51 million in 4Q25 (down 58% QoQ); adjusted net income: R$ 406 million in 2025 (down 40% YoY).

• Free cash flow: R$ 196 million in 2025, down from R$ 1 billion in 2024; negative R$ 135 million including midstream investments.

• Net debt: R$ 1.6 billion at year-end 2025; Net Debt/EBITDA at 1.10x.

Outlook and guidance

• 2026 CapEx to be more conservative, focused on conventional drilling, workovers, and secondary recovery, with flat production expected.

• 65% of 2026 oil production is hedged, providing downside protection and upside capture; hedging coverage expanded into 2028.

• Flexibility to accelerate investments if oil prices remain high, with quarterly reviews of capital allocation.

• Current reserves support 19 years of production at the 2025 pace, with a reserve replacement ratio of 1.0x.

• Uncertainty in oil and gas prices persists, with readiness to adapt plans as market evolves.