Prio (PRIO3) Q3 2024 earnings summary

Executive summary

• Signed agreement to acquire a 40% stake in the Peregrino Field, with closing expected soon and $192 million paid as contract advance; expected to add 36,000 bpd to production.

• Production averaged 70,000 barrels per day, impacted by scheduled and unscheduled shutdowns, equipment failures, and delayed well approvals.

• Cash position ended at $2.16 billion after Peregrino payment and new debt issuance; leverage at 0.5x net debt/EBITDA.

• Published second annual sustainability report, advancing climate risk disclosures and stakeholder transparency.

• Net debt increased to $789 million due to Peregrino acquisition and ongoing investments.

Financial highlights

• Revenue dropped 40% year-over-year to $474–$498 million, driven by a 30% decline in production and lower Brent prices.

• Adjusted EBITDA (ex-IFRS 16) was $327–$328 million (69% margin), down 48% year-over-year.

• Net income (ex-IFRS 16) was $164–$165 million, a 52% decline compared to 3Q23.

• Lifting cost rose 41% year-over-year to $9.8/bbl, mainly due to lower production.

• Adjusted EBITDA margin decreased to 69% from 80% in 3Q23.

Outlook and guidance

• Year-end production target is 85,000 barrels per day, contingent on well approvals and operational improvements.

• Wahoo Field first oil expected between May and August, pending environmental licenses; project ready for execution upon approval.

• Focus on Albacora Leste efficiency and revitalization campaign to improve asset performance.

• Employee and contractor health and safety, and M&A opportunities remain priorities.

• Peregrino closing expected soon, with leverage projected to remain below 1.2x net debt/EBITDA post-transaction.