Prio (PRIO3) Q4 2024 earnings summary

Executive summary

• 2024 was marked by operational challenges, including equipment failures and environmental licensing delays, but also major achievements such as the acquisition of a 40% stake in the Peregrino field, favorable arbitration in Wahoo, and expansion into trading and gas commercialization.

• Annual production averaged 84,000 barrels per day, with Peregrino adding up to 40,000 barrels/day in December and a competitive lifting cost of $9.0 per barrel.

• The company maintained a strong cash position post-acquisition, executed share buybacks, and expanded social, environmental, and employee wellness initiatives.

• 1P reserves increased from 537 million to 688 million barrels, driven by Peregrino and Wahoo developments.

• Strategic focus remains on cost optimization, operational efficiency, and M&A opportunities.

Financial highlights

• Full-year revenue reached $2.4 billion, down 8% year-over-year, with adjusted EBITDA at $1.66 billion (73% margin) and net income (ex-IFRS 16) of $1.7 billion, up 60% year-over-year due to tax credits.

• Q4 revenue was $536 million, EBITDA $300 million, and adjusted EBITDA $322 million, with margins down from the prior year due to Peregrino integration and lower Brent prices.

• Lifting cost in 4Q24 was $11.1/bbl, up 62% year-over-year, mainly due to lower production and Peregrino's higher cost structure.

• Cash position at year-end ranged from $645 million to $2,160 million, reflecting acquisition and working capital adjustments.

• Financial income rose 480% and financial expenses increased 287% year-over-year.

Outlook and guidance

• Wahoo drilling began in early 2025 after securing the environmental license, with 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.

• Continued emphasis on cost optimization, operational reliability, and strategic capital allocation.