Keo Capital (KEOC) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw strong production growth, with Brava Energia reaching record output and April production at Atlanta increasing to 82,000 barrels per day after new wells came online.

• The company remains debt-free, ending the quarter with over $106 million in cash and liquid investments.

• Strategic focus is on cost reduction, portfolio optimization, and value delivery to shareholders, with management and internal team downsized and CEO also acting as CFO.

• Venezuela's PetroUrdaneta business plan was updated, highlighting significant upside with 84 million barrels of oil and 167 million cubic feet of gas potential, and technical preparations concluded.

• Illinois Basin maintained stable production above 300 barrels per day, achieving the lowest OpEx per barrel ($15) in the last four quarters.

Financial highlights

• Q1 2025 EBITDA reached $2.1 million, positively impacted by a $4.4 million earnout from PetroRecôncavo and $200,000 from the Bolivian gas pipeline.

• Net result for the quarter was $6 million, supported by a $5 million unrealized gain on Brava shares.

• Illinois Basin revenue decreased 12% year-over-year due to a 7% drop in both production and oil prices.

• OPEX per barrel in Illinois Basin fell 16% year-over-year, reflecting effective cost control.

• Free cash flow was $2.7 million, a significant improvement from negative $74.4 million in Q1 2024.

Outlook and guidance

• Production at Atlanta expected to exceed 90,000 barrels per day with two additional wells by June 2025.

• Positive free cash flow anticipated as major offshore CAPEX is completed.

• Ongoing contract negotiations in Venezuela, with peak output for PetroUrdaneta fields projected at 40,000 boepd and awaiting OFAC license and other approvals.

• High-return projects in Illinois Basin prioritized, targeting IRRs above 25%, with capital allocation responsive to oil price trends.

• Corporate restructuring and cost optimization are expected to yield further G&A reductions.