Prio (PRIO3) Q3 2024 earnings summary

Executive summary

• Signed agreement to acquire a 40% stake in the Peregrino Field, with $192 million paid as an advance and closing expected soon, marking a major strategic milestone.

• Production averaged 70,000 barrels per day in Q3, impacted by scheduled and unscheduled shutdowns, equipment failures, and delayed well approvals.

• Cash position remained strong at $2.16 billion after Peregrino payment and new debt issuance, with leverage at 0.5x net debt/EBITDA.

• Published second annual sustainability report, advancing climate risk disclosures and stakeholder transparency.

• Major acquisitions included Peregrino, Pitangola, Albacora Leste, and Forte (Dommo), strengthening the asset base.

Financial highlights

• Revenue dropped 40% year-over-year in Q3 2024 to $498 million, driven by a 30% decline in production and lower Brent prices.

• Adjusted EBITDA (ex-IFRS 16) was $328 million with a 69% margin, down 48% year-over-year.

• Net income (ex-IFRS 16) was $165 million, a 52% decrease compared to 3Q23.

• Lifting cost increased to $9.8 per barrel, up 41% year-over-year due to lower production.

• Cash and cash equivalents rose to $2.16 billion from $482 million at year-end 2023.

Outlook and guidance

• Year-end production target is 85,000 barrels per day, contingent on well approvals and operational improvements.

• Wahoo Field first oil expected between May and August, pending environmental licenses; project remains ready for execution.

• Peregrino closing expected soon, with 36,000 barrels per day to be added post-consolidation.

• Focus on Albacora Leste efficiency and revitalization campaign, and ongoing M&A opportunities.

• Management continues to prioritize operational efficiency, cost reduction, and maximizing asset value.