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 partially offsetting oil price declines; annual production averaged 26.5 thousand boe/d, up 1% year-over-year.

• EBITDA was R$ 1.4 billion, down 12% year-over-year; net income totaled R$ 638 million, up 46% year-over-year but down 58% quarter-over-quarter in Q4.

• Operational resilience improved through cost optimization, logistical and commercial diversification, and midstream asset acquisitions.

• Major technical advances included first deep wells in Bahia, first horizontal well in Rio Grande do Norte, and strengthened midstream operations.

• Sustainability initiatives impacted 21,000 people and included new social projects and recognition in B3 indices for dividend and workplace excellence.

Financial highlights

• Net revenue for 4Q25 was R$ 704 million, down 10% sequentially; EBITDA was R$ 295 million, down 16% sequentially.

• EBITDA margin for 2025 was 45.7%, down from 50.3% in 2024.

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

• Free cash flow in 2025 was R$ 196 million, after accounting for non-recurring events; excluding midstream, positive R$ 196 million.

• Dividend distribution totaled R$ 563 million, with a 15% dividend yield.

Outlook and guidance

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

• 65% of the 2026 1P oil curve is protected by hedges, providing downside protection and upside capture.

• Flexibility to accelerate investments if oil prices remain high; quarterly capital allocation reviews.

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

• Emphasis on productivity gains and reservoir recovery factor improvements.