Prio (PRIO3) Q4 2024 earnings summary

Executive summary

• 2024 was marked by operational setbacks, including equipment failures, maintenance, and environmental licensing delays, but also major achievements such as the acquisition of a 40% stake in Peregrino Field, favorable arbitration in Wahoo, and a reverse merger consolidating assets.

• Annual production averaged 84,000 barrels per day, with lifting costs rising to US$11.1/bbl in Q4, though some reports cite a competitive annual average of US$9.0/bbl.

• The company maintained a strong cash position, executed substantial share buybacks, and expanded social, environmental, and sustainability initiatives.

• Strategic expansion included trading, gas commercialization, and a focus on cost optimization and operational efficiency.

• Net income surged, driven by tax credits from corporate restructuring and asset transfers.

Financial highlights

• Full-year revenue reached US$2.4 billion, down 8% year-over-year, with adjusted EBITDA (ex-IFRS 16) at US$1.6–1.675 billion and net income (ex-IFRS 16) at US$1.7 billion, up 60–231% year-over-year depending on reporting basis.

• Q4 revenue was US$536 million, with adjusted EBITDA at US$322 million (66% margin), both down from the prior year due to lower production and Brent prices.

• Lifting costs increased to US$11.1/bbl in Q4, up 62% year-over-year, mainly due to lower production and Peregrino's higher cost structure.

• Cash position at year-end ranged from US$645 million to US$2,160 million, depending on reporting basis.

• Net income in local currency reached R$6.4 billion, up 1,099% year-over-year, driven by tax credits.

Outlook and guidance

• Wahoo drilling license was granted in February 2025, with drilling begun and first oil expected later in the year, potentially adding 40,000 barrels/day to production.

• Focus areas for 2025 include securing the Wahoo installation license, improving Albacora Leste efficiency, and continuing M&A exploration.

• Production is expected to recover to 150,000 barrels/day by year-end 2025, with reserves certified at 688 million barrels.