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PRIO has record revenue of R$1.6 billion in 2019, up 94%
PRIO, the country’s largest independent oil and gas company, posted record financial results in 2019, a year marked by major acquisitions, with a strong positive impact on the company’s production and reserves.
In the year, net income reached R$ 688.4 million, up 236% compared to 2018.
Net revenue, in turn, reached R$1.644 billion in 2019, a 94% growth compared to 2018 and adjusted EBITDA reached R$792 million, after acquiring the Frade Field and capturing synergies with the Octopus Field, operated by PRIO.
The company, whose strategy is to acquire and invest in fields already in production, has as its pillars cost rationalization, high efficiency, focus on increasing production, and capital discipline and – always with operational safety, respect for the environment.
“In 2019, we delivered significant increases in our production and relevant reductions in costs per barrel, benefiting results for the year. We had another year of overachievement and deliveries, despite the $8 drop in average Brent for the period,” highlighted Nelson Queiroz Tanure, CEO of PRIO.
“The year 2019 was prominent on the M&A agenda. We completed four transactions during the year, which we believe will generate value for the Company, allowing us to complete even more transactions going forward. Our continued efforts to rationalize costs and capture synergies in new assets have reduced the Company’s cost per barrel to $20/barrel in the last quarter, which implies new cash generation capacity, even in high volatility scenarios for Brent-type oil. PRIO believes that reducing the cost per barrel is its best hedging strategy and will continue to use the indicator as a pillar in its projects,” added the company’s chief executive.
Facing new acquisitions, efficiency gains and investments in field revitalization, PRIO’s average oil and gas production jumped from 11,673 thousand barrels per day in 2018 to 19,209 thousand barrels per day in 2019, a 65% increase.
New acquisitions
The year 2019 was marked by strategic acquisitions, which followed this year. In November 2019, PRIO signed an agreement with Petrobras to purchase 30% of the Frade Field, and now owns 100% of the asset.
When completed, the stake will add about 5,800 barrels per day to PRIO’s total production, further reducing the cost of oil extraction. PRIO plans to start in 2020 the Frade Field Revitalization Plan, which seeks to increase the asset recovery factor and meet ANP conditions for the concession extension until 2041.
In February 2020, the Company signed contracts for the purchase of the vessel OSX3 (an FPSO), for US $140 million, and 80% (“farm-in”) of the Tubarão Martelo Field, where OSX-3 is chartered.
These operations will allow the interconnection between the Octopus and Tubarão Martelo fields, simplifying the production system and creating a private hub in the region, which will generate significant synergies, cost reductions, and the extension of the economic life of the fields.
PRIO has been implementing, since the completion of the acquisition of the operation and 52% of Frade (in March 2019), cost reduction measures through operational and logistical synergies with the Octopus Field.
In October 2019, PRIO announced the completion of the 18% Frade acquisition, which added about 3.5 thousand barrels to the Company’s daily production.
Operational efficiency, another PRIO differentiator, reached 99.7% in Frande in the last quarter of 2019.
Social investments
With the intention of sharing its results with society, PRIO helps finance the Instituto Reação, an NGO created in 2003 by Olympic medalist Flávio Canto and his coach Geraldo Bernardes, which encourages the practice of judo.
At the end of 2018, the company played a leading role in the launch of the PRIO Theater of the Arts, with the intention of funding sociocultural activities in the theater for the next two years.
In the field of inclusive music, PRIO launched the sponsorship of the NEOJIBA Orchestra, which fosters the development and integration of young people in the state of Bahia through the collective practice of music.
“After a year of significant deliverables, we believe PRIO is well positioned to continue its trajectory of economic and social growth. We will continue to look at potential acquisitions and pursue attractive returns by rationalizing the costs of already acquired assets and seeking creative ways to contribute to a more inclusive society,” emphasizes PRIO’s CEO.
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