Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PRIO SA (PTRRY, Financial) acquired a 40% stake in the Peregrino field, adding 40,000 barrels of oil to their production.
- The company received a favorable arbitration decision regarding the Wahoo project, consolidating their interest in the field.
- PRIO SA (PTRRY) repurchased 160 million shares and published their annual sustainability report.
- The company posted revenues of $2 billion, with an EBITDA of $1.6 billion and a net income of $1.7 billion.
- PRIO SA (PTRRY) increased their reserves by 28% due to the Peregrino and Wahoo deals.
Negative Points
- The company faced significant delays in environmental licensing for the Wahoo project, impacting production timelines.
- PRIO SA (PTRRY) experienced a natural decline in production and increased lifting costs due to fixed operating costs and reduced production.
- The Peregrino field operates at a higher lifting cost, increasing the company's overall lifting cost to $11.1 per barrel.
- The company faced operational challenges with equipment failures in the Albacora field, affecting production efficiency.
- PRIO SA (PTRRY) saw a decline in production efficiency in several fields due to delays in drilling and environmental licensing issues.
Q & A Highlights
Q: Can you explain the increase in CapEx per well at Fradi, which rose from $33 million to $55 million?
A: Roberto Montero, CEO: The increase in CapEx per well at Fradi is due to a strategic decision to provide a more reliable forecast to the market. Initially, wells were drilled at $30 million, but the guidance was set at $50 million to $55 million to ensure deliverability rather than basing it on the lowest cost achieved.
Q: What is the status of the Peregrino field's lifting cost and the repair process?
A: Roberto Montero, CEO: The Peregrino field's lifting cost is expected to normalize by the first half of next year. Discussions with Ecuinor are ongoing to potentially expedite the repair process using PRIO's resources and inventory, aiming for completion by the end of 2025.
Q: Can you provide an update on the environmental licensing for the Wahoo project?
A: Roberto Montero, CEO: The environmental impact study (EIA) was submitted to Ibama in January, and feedback is expected in March. The goal is to obtain the installation license by mid-year, allowing for first oil production by the end of 2025.
Q: What is PRIO's strategy regarding share buybacks and capital allocation?
A: Roberto Montero, CEO: PRIO plans to resume share buybacks, respecting legal restrictions. The current program is nearing completion, and the board will decide on a new program. The focus remains on strategic M&A opportunities, but buybacks will continue if no deals are imminent.
Q: How does PRIO view potential M&A opportunities, particularly in the Gulf of Mexico?
A: Roberto Montero, CEO: While PRIO is curious about the Gulf of Mexico, the focus remains on Brazil. Any move to the Gulf would require a project with adequate returns. The company is not desperate to grow and prioritizes value creation over mere production increases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
