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 28% to R$396 million, and net income was R$203 million, up 64% from Q1 but down 15% year-over-year.

• Production averaged 24.1 kboe/day, down 1% sequentially and 12% year-over-year, with operational focus on secondary recovery and water injection projects.

• Signed a long-term oil offtake agreement with Brava Energia, enhancing commercial predictability and operational resilience.

• Strong cash generation and a solid capital structure were maintained, with leverage at 1.01x Net Debt/EBITDA and a cash position of R$1.6 billion.

• R$200 million in Interest on Equity (JCP) was distributed in 2026, with an additional R$100 million dividend scheduled for December.

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 at quarter-end was R$1.62 billion, with strong operating cash flow and disciplined capex.

• Free cash flow: R$74 million in Q2 2026, R$154 million in 1H26 (+7% YoY), supporting consistent shareholder returns.

• Capex: R$193 million in Q2 2026 (-2% QoQ), focused on reserve development, water injection, and asset integrity.

• JCP of R$0.34/share (R$100 million) approved, with payment scheduled for August 27, 2026.

Outlook and guidance

• Production expected to stabilize in H2 2026, with focus on water injection and operational efficiency.

• CapEx for 2026 projected at R$800–850 million, with similar levels expected for 2027; emphasis remains on secondary recovery and water injection projects.

• Anticipate improved gas margins in Q3 as downtime effects subside and higher Brent prices are reflected in contracts.

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

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