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 and stable production of 26.5 thousand boe/d supporting performance.

• EBITDA was R$ 1.4 billion, down 12% year-over-year; net income rose 46% to R$ 638 million, despite a 58% sequential drop in Q4.

• Operational resilience improved through cost optimization, midstream asset acquisitions, and technical advances in drilling.

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

• Audited financials confirm compliance with Brazilian GAAP and IFRS, with all operations consolidated under oil and gas exploration and production.

Financial highlights

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

• Lifting cost averaged US$ 14.42/boe in 2025, with Q4 improvement to US$ 14.32/boe.

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

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

• Dividend distribution totaled R$ 563 million, with a 15% yield; R$ 300 million declared for future payment.

Outlook and guidance

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

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

• 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.

• Management expects continued going concern, with adequate resources for future operations.