PRIO closes 1Q22 with profit and record production

04 May 2022

 Net revenue of US$ 310 million (158% increase vs.1Q21)
 Net income (ex-IFRS 16) of US$ 228 million
 Adjusted EBITDA (ex-IFRS 16) of US$ 229 million (vs. US$ 78 million in 1Q21)
 Approximately 2.8 million barrels sold and record average production of 35.1 Mboepd
 Lifting cost of $11.2, the lowest ever recorded
 Record operational efficiency and 10-year accident-free celebration in Frade
 Signing of the acquisition of Albacora East
 Drilling begins in Frade

Rio de Janeiro, May 4, 2022

PRIO, Brazil’s largest independent oil and gas company and a specialist in the recovery of mature fields, closed the first quarter of 2022 celebrating the lowest lifting cost ever recorded (a 21% reduction compared to 1Q21), high operational efficiency in the quarter, record average production of 35.1 Mboepd, and the amount of offtakes in the period, approximately 2.8 million barrels sold (45% higher than in 1Q21). Combined with the high price of Brent, the increase in sales contributed significantly to the increase in the company’s revenue in the quarter.

The sale of 2.8 million barrels in three offtakes, two in February and one in March (the latter in the co-load regime, a blend of Frade and Octopus oils and TBMT), totaled 1.6 million barrels sold in Frade and 1.2 million barrels in the Octopus cluster and TBMT, with an average gross sales price of US$ 110.28 and an increase of 45% in volume sold when compared to 1Q21.

In the Octopus and TBMT cluster, the volume produced in the quarter was 24% higher than the same period last year, due to the start of production at the TBMT-10H well late last year and the operational stability achieved by the cluster in the quarter, which also explains the 14% increase in production compared to 4Q21.

“2022 started with several events, impacting the Brent oil price. We saw oil prices rising significantly, with Brent coming close to its 10-year peak. Thus, together with the strategy of constantly seeking a reduced lifting cost, and maintaining a high operational performance, we were able to achieve several records, among them, revenue per barrel, contribution margin, and EBITDA,” said the company’s CEO, Roberto Monteiro.

The first quarter was marked by the operational stability of both the Frade / Wahoo cluster and the Octopus / Hammerhead Shark cluster, the completion of the FPSO Bravo gas compressor project, allowing full use of the gas produced in the Octopus / TBMT cluster for power generation, substantially reducing the platform’s diesel consumption. Thus, another step was taken in the reduction of the company’s emissions, in addition to the cost reduction that allowed PRIO to reach the lowest lifting cost ever recorded in its history.

On April 27, PRIO started the first phase of the Frade Field Revitalization Plan, using the NORBE VI drilling rig, with the start of drilling of the ODP-4 producing well. This stage encompasses the drilling of a producing well and two horizontal injection wells, expected to be completed in 2022.

The Frade Field Revitalization Plan seeks to increase the asset recovery factor and meets the ANP’s conditions for the extension of the concession until 2041, as disclosed in the approval of the Field Development Plan. The overall project considers the drilling of four producing and three injector wells, which were selected based on maximizing the recovery factor of the field.

In the quarter, the Octopus and TBMT cluster had average daily production 24% higher than in 1Q21 and 14% higher than in 4Q21, positively impacted by the start of production from the TBMT-10H well in late October and by operational stability.

Cluster operational efficiency for the quarter was approximately 97%, representing record efficiency since the tieback, which illustrates the PRIO team’s learning curve with the project.