August 03, 2022 / News
PRIO doubles net revenue and reaches new record in 2Q22
– Record net revenue of US$ 377 million (95% increase in comparison with 2Q21)
– Net income (ex-IFRS 16) of US$ 140 million
– Record adjusted EBITDA (ex-IFRS 16) of US$ 269 million (vs. US$ 121 million in 2Q21)
– Approximately 3.3 million barrels sold and average production of 33.3 Mboepd
– Lifting cost of $11.1, the lowest ever recorded
– Alcabora Leste contract signing, in April
– Acquisition of the West Capricorn rig
– First oil from the ODP4 well in Frade in July, with production of 15 kbpd
– First oil from the MUP3A well in Frade, in July, with production of 3.5 kbpd
Rio de Janeiro, August 3, 2022 – PRIO (B3: PRIO3 – formerly PetroRio), Brazil’s largest independent oil and gas company and a specialist in the recovery of mature fields, closed the second quarter of 2022 with record revenues of US$ 377 million, an increase of 95% compared with the same period last year, and also record adjusted EBITDA of US$ 269 million. Net income reached US$140 million.
The company managed to stand out once again by registering its lowest lifting cost level (22% reduction compared to 2Q21 and 1% compared to the previous quarter). Also contributing significantly to the company’s revenue increase was the fact that PRIO sold 3.3 million barrels, an 18% increase in volume compared to 2Q21, in five offtakes (one in April, two in May, and two in June), totaling 1.5 million barrels in Frade and 1.8 million in the Octopus and TBMT cluster, in addition to the rise in Brent prices, which reached US$ 123.58 per barrel in June.
“PRIO works to increase its production levels and rationalize its costs while maintaining levels of excellence in environmental responsibility, safety and operational efficiency. We believe that the best protection against the volatility of Brent is to reduce the lifting cost and this will continue to be one of the pillars for our projects. We are optimistic. Our current oil production reached 52,000 bpd and we now expect to continue reducing the lifting cost over the coming quarters,” says Milton Rangel, CFO of PRIO. “It is worth noting that in addition to M&A opportunities, we have a robust organic growth schedule with projects already in the pipeline through the Frade revitalization plan and the Wahoo and East Albacora developments.”
In April, PRIO started the Frade Revitalization Plan, which enabled an increase of more than 50% in the company’s consolidated production to date. The first well, ODP4, was executed in only 68 days, which resulted in a significant cost reduction – about 30% compared to the original schedule. Initial production was 15,000 bpd and remained steady throughout July, nearly doubling the field’s output. The second well, MUP3A, was run in less than 30 days and had initial production of 3,5000 bpd.
“During the period, we also signed the contract to acquire 90% of the Albacora East field with Petrobras, adding 244 million barrels of 1P reserve to PRIO. The field will add about 27,000 bpd to PRIO and will contribute to a relevant portfolio of projects to increase production and improve efficiency in the coming years,” comments the CFO.
The company also acquired the West Capricorn rig, which will complement PRIO’s needs in the coming years and ensure the availability of a sixth-generation rig, with significant cost reduction compared to what is practiced in the market.
To strengthen its capital structure and cash position to meet future investments, PRIO announced the issuance of debentures for an additional R$2 billion, which will be used to finance the Frade Revitalization Plan. The company seeks long-term financing, more than five years, at competitive costs.
“The 2Q22 was marked by excellent results and we remain very excited for PRIO’s next projects, always focusing on efficiency, the highest levels of operational safety and respect for the environment and society,” concludes Rangel.
PRIO is the largest independent oil and gas company in Brazil, a pioneer in recovering and increasing the useful life of fields in production. With its assets located in the Campos Basin, the company seeks operational efficiency with process optimization, the use of new technologies and innovative solutions that aim to reduce costs, always with the premise of excellence and safety in operations. PRIO has been growing through acquisitions. Thanks to the constant positive results, it had a strong appreciation, becoming part of the B3 index, the main Brazilian stock exchange index in 2020.