Petroreconcavo (RECV3) Q2 2026 earnings summary

Executive summary

• Net revenue reached R$808 million in Q2 2026, up 18% sequentially, driven by higher Brent prices and improved commercial terms, despite a 1% drop in production volume.

• EBITDA rose to R$396 million (+28% QoQ), with margin improvement due to better realized prices and disciplined cost management.

• Net income was R$203 million, up 64% from Q1 2026 but down 15% YoY, reflecting hedging and FX impacts.

• Production averaged 24,100 boe/d, down 1% QoQ and 12% YoY, with operational focus on secondary recovery and water injection projects.

• A long-term oil offtake agreement with Brava Energia was signed, enhancing operational predictability and market access.

Financial highlights

• Net revenue: R$808 million in Q2 2026 (+18% QoQ, stable YoY); EBITDA: R$396 million (+28% QoQ, +6% YoY); Net income: R$203 million (+64% QoQ, -15% YoY).

• Cash position: R$1.62 billion; operating cash flow: R$252 million; free cash flow: R$74 million (impacted by seasonal interest payments).

• Adjusted free cash flow grew to R$146 million, reflecting improved prices and cost discipline.

• Dividend and JCP distributions of R$200 million in 2026, with R$100 million scheduled for December and recurring quarterly payouts.

• Net debt stood at R$1.4 billion, with Net Debt/EBITDA at 1.01x.

Outlook and guidance

• Production expected to stabilize in H2 2026, with focus on maintaining current CapEx and production levels.

• CapEx for 2026 projected at R$800–850 million, prioritizing water injection and workovers.

• New contract with Brava Energia effective from Oct 2026 to Dec 2030, securing minimum mutual commitment for 50% of production.

• Anticipated margin improvements in gas sales as plant downtime effects subside and pricing adjusts upward.

• Continued focus on operational efficiency, disciplined capital allocation, and maximizing reservoir recovery.