Petroreconcavo (RECV3) Q3 2024 earnings summary

Executive summary

• Net revenue reached R$850 million in 3Q24, up 3% sequentially and 14–16% year-over-year, with stable production at 26.4–26.8 kboe/day and net income of R$159 million, a 17% sequential increase.

• EBITDA was R$439 million in 3Q24, down 2% sequentially, and R$1,240 million for 9M24, up 20% year-over-year.

• Dividend of R$379 million distributed in 3Q24, yielding 14.5% for the year.

• Operational resilience initiatives included advanced drilling, new oil outflow routes, and approval of the NGPU Miranga gas processing project.

• Major acquisition of SPE Tiêta completed, and a farm-out agreement signed for 50% of seven Potiguar concessions.

Financial highlights

• Consolidated net revenue for 9M24 was R$2,421.2 million, up from R$2,125.4 million year-over-year.

• Net income for 9M24 was R$405.1 million, down from R$522.3 million in 9M23.

• Free cash flow reached R$891 million year-to-date, with operating cash flow at R$1,611.6 million for 9M24.

• Total CAPEX in 3Q24 was R$190–201 million, focused on reserve development, workovers, and new wells.

• Ended the quarter with R$1.5 billion in cash after amortizing debt, with most funds in foreign currency.

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 and production growth.

• 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 investments.

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