Brava Energia S A S/Adr

Good afternoon everyone and welcome to 3R Petroleum fourth quarter and full year 2021 conference call. The conference call and results will be presented by Ricardo Savini, CEO of 3R and the CFO and IRO Rodrigo Pizarro. All other members of the management as well as the investor relations team are also here and will be available to answer your questions. We inform that this conference call will be broadcast exclusively through the webcast platform over the web and will be presented in Portuguese. Additionally, the English version of this conference call can be accessed through the webcast with the simultaneous interpreting feature. The company will be making a brief presentation of the main highlights of the quarter and full year, followed by a Q&A session. Questions should be sent exclusively through the chat of the webcast platform. Before proceeding, let me mention that forward-looking statements that might be made relative to the company's business perspectives, projections, and operating and financial goals are based on the beliefs and assumptions of the management of 3R, as well as any information currently available to the company. Fort looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions and refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors may also affect the future results of the company and may lead results to differ materially from those expressed in such forward-looking statements. Now, we will start the presentation with the company's CEO, Ricardo Savini. Please, Savini, you may begin. Good afternoon and welcome everyone to our conference call to discuss Q4 and full year 2021 results of 3R Petroleum. It is a pleasure to welcome you all. I have with me Rodrigo Pizarro, our Chief Financial Officer and Investor Relations Officer. as well as the whole management team of 3R, and they will be available to answer your questions after the presentation. Well, in 2021, 3R Petroleum had some great achievements. It was a very positive year for the company. In strategic terms, in our growth, in organic growth axis, we ended the year with a signing In the very end of January of 22, the acquisition of the Potiguar Cluster, a great cluster that we will talk a little about along this presentation. This is a transformational acquisition for 3R Petroleum. It basically doubles almost all of our indicators and places us. among the top players in Brazil and in Latin America. With this cluster, we will be able to capture a lot of synergies with our current position in the Potiguar base and with the clusters that we are already operating, such as Macau Cluster. We will be speaking about the operation of this cluster. Also, the second bullet item of our strategies is the closing of the 50% of Senha Sul, which is the biggest gas field in Rio Grande do Norte, and of Areia Branca Cluster, two fields that we acquired through the acquisition of Duna Energia. These closings happened in the last quarter, and it is a relevant event in queue for results. Also, along 2021, we strengthened a lot of our capital structure. We had two follow-on operations, which we did exactly to handle the acquisitions that we had in prior years. And with that, we raised almost 3 billion BRL in 2021 with S A S A S A S A S A S A S A S A S that we had of $130 million that we borrowed for the acquisition of Macau Cluster. So I'm very pleased to announce that today our debt is practically down to zero, zero leverage. Another very important event was the renegotiation of our gas contracts, both for Macau Cluster and for Pescada Arabiana Cluster, those offshore gas fields in Rio Grande do Norte. We had a beautiful negotiation. increasing the value monetized for gas molecules negotiating with Petrobras. And lastly, in this strategic access, we are also very pleased to communicate that the shares of 3R Petroleum joined the Ibovespa index. For a company as young as ours, we were able to very quickly make this happen, indicating the great liquidity that our shares have right now. And we are very proud of that. From the standpoint of our current operations, 3R posted a robust production increase. Looking at the middle part of the slide, we increased production by 65% compared to the same period of last year. We jumped from a little over 4,000 barrels to almost 7,000, 6,700 barrels of oil produced in our assets. Here we are considering the following clusters Macau Rio Ventura in Bahia Areia Branca as I mentioned in our working interest of Pescada clusters still prior to the closing of this deal that hasn't happened yet so we posted a strong production increase When we compare our performance in each one of the clusters, we also see great growth. In Macau, as we can see in the middle bottom part of the slide, We had a 43% increase year on year. I'd like to remind you that at Macau, we haven't started yet, and we have been reporting this over recent quarters. According to what we planned, we haven't started yet the two major strategies to revitalize the field out of the three strategies available. I'll speak about the two that we haven't implemented yet, i.e. executing in fill drilling campaigns in the fields of Macau cluster and we haven't started yet to inject high volumes of water in projects for secondary recovery. What we did was purely improve operating efficiency and increase the number of wells in production. significantly reducing the downtime of these wells. With that, you can see that production in Q4 2020 was 3,866 barrels, increasing to 5,129 barrels in Q4 2021. I can mention, because we have disclosed the results of January, that we continue on our growth curve at Macau, always highlighting that we had no relevant incidents, not at Macau cluster, nor at any other operation by 3R. Also in Rio Ventura, in the Reconcavo basin, in the eight fields of Rio Ventura cluster, there was also an increase. We took over in the middle of last year comparing Q3, which was the first quarter under our operatorship with Q4 we recorded an 18% growth in very little time here just like Macau that happened just by increasing operating efficiency without starting to drill new wells as regards our financials parallel to our operation evolution And parallel to that increase in oil production, we also have a very robust financial performance. Please note that in terms of revenues, we practically tripled our net revenues year over year, comparing Q4 2020 against Q4 2021. In Q4 2021, we posted revenues totaling 250 million BRL In the full-year comparison, the difference is even more striking. We posted an almost four-fold increase, a 3.6-time increase, reaching net revenues for 2021 already audited of almost 728 million BRL, with The clusters that we already operating. I'd like to remind you that we have several other fields in the final stage of closing of the deals. Our Q4 adjusted EBITDA also posted a 65% increase year on year. In other words, we ended Q4 with an EBITDA of more than 83 million BRL. A very significant growth compared with Q4 20. In the full year comparison, we increased our adjusted EBITDA by almost seven times, showing great efficiency of our EBITDA, totaling 356 million BORL for the full year 2021. We are also very pleased to mention the efforts that we are making in the beginning of our sustainability journey. We have been working very hard to strengthen our governance structure. Along last year, we created a number of committees. We implemented some that were already created and came up with new ones, such as the audit committee, the finance committee, the people and compensation committee. We also worked strong and hard and we still have a lot to do in terms of diversity and multiculturalism. I'd like to remind you, as I always say, that at 3R, we have representatives of several countries from our region, Latin America. We have 9% of foreigners working with us and close to 30% of our workforce consists of women. The oil and gas industry traditionally has very few women, but we are making an effort and we intend to balance that out as much as possible. So you can be sure you can count that this is an effort that the company will continue to make. From the social standpoint, well, we did a number of things in 2021. I'm going to mention two programs that we don't talk a lot about, but that make us very proud. We launched a program to fight hunger, considering the moment that not only our country is going through, but the whole world is going through, still with the impact of the pandemic and all the harmful effects on the economic side. We are keen to invest in education and we will do so. But right now we thought that it was more important to focus on fighting hunger, especially in the areas where we operate. We have a large program to fight hunger with distribution of staple food baskets and social vouchers in Rio Grande do Norte, in Bahia and in Rio de Janeiro, where we have our headquarters. Another program that I would like to highlight, it's not really a program, it was rather an emergency humanitarian action supporting the families impacted by those dramatic floods in the south of the state of Bahia. We were called upon to help by the government of Bahia and we responded promptly. We served around 3,000 families impacted by the huge tragedy. In these recent months, so full of tragedies, well, we did our best in Southern Bahia. From the environmental standpoint, what we have is the continuity of the programs that we have already announced, particularly to reduce greenhouse gas emissions, using gas that historically is vented out in onshore operations. We are finalizing the works to build a network to capture gas produced between the well columns and the top of the tanks. And with that gas, we are building our own gas to wire infrastructure for electricity generation, which will reduce our need to use gas from the grid, thus markedly reducing our OPEX in Macau. This program is being built at Macau. We are at the final stage and hopefully by May, everything will be working parallel to this electricity generation initiatives. We also have reduction of water discharge. Normally in the region, this is done through a subsea emissary in the region of Guamare. And we will definitely use and we are building this. We will take advantage of the treated water. Instead of discharging it into the ocean, we will increase our programs for secondary recovery, thus increasing the recovery factor of our reservoirs. So this is good for the environment and it's also good for the recovery factor of our reservoirs. So these are the two major programs that we're implementing in the cluster that we have been operating for almost two years now, Macau Cluster. But these are strategies that can be replicated in practically all of the clusters that we are operating or that we will start operating very soon. Here on slide five, we give you a timeline of all achievements of 3R. Starting with our IPO in November of 2020. As you can see, our timeline is full of events. Indeed, we did a lot of things and we are very proud of everything we have achieved. In financial terms, in addition to the IPO, we had two other follow-ons. As I mentioned, in the end of December of last year, we prepaid a debt of $130 million that we had with BTG Bank. and the fact that our shares joined DI Bovispa Index and very important indices such as IBRX 100. In terms of M&A deals, we are ending the organic growth phase of the company. Of course, we still have a lot of closings to complete, but we plotted on the slide a number of events, such as the signing of Reconcavo Cluster in the end of 2020. From that moment on, we signed the Perua Cluster, we signed Papaterra Cluster, we signed the purchase from Petrobras of the remaining 50% stake of San Yasuo Field. Before that, we had the closing of Rio Ventura and we started operating it in July of last year. We had a closing, actually we acquired and had the closing of Areia Branca Cluster with the acquisition of Duna Energia. and our biggest achievement in terms of mergers and acquisitions, which was the signing of Potiguar Cluster with Petrobras just now in the end of January of this year. In addition to these M&A activities, we also obtained approval of tax benefits foreseen for the Northeast region. We were granted the Sudanese tax incentive for our revitalization activities at Macau Cluster in December of 2020 and in December of 2021. We got the same benefit in Bahia for the Rio Ventura Cluster. And as mentioned before, we were able to renegotiate with Petrobras a higher sales price for our natural gas to Petrobras. Lastly, as I mentioned in the previous slide, we started our ESG journey. We hired a very important consulting firm, a global brand, to help us in our ESG journey. We are very happy and working very hard to define a strategic vision to position 3R in the ESG context, which is so important for our planet right now. On the next slide, we present our M&A story, and I'm not going to repeat everything that we have mentioned, but I'd like to draw your attention to Detroit on the bottom left, Off the slide. Here we show that 3R is today a very experienced player in this sale process and this large divestment program by Petrobras. You can see that out of the 26 contracts signed by Petrobras so far, nine of those were with 3R. S A S A S A S A S A S A S But this is just to show the strength of 3R as a relevant player in this new market of independent oil and gas companies in Brazil normally operating matured fields. Another very important factor is the entry multiples. We made very efficient acquisitions. You can see that we paid around $2.9 per barrel considering our certified reserves. And here we have a breakdown in offshore. You will remember that we moved to offshore because we saw the possibility of acquiring even cheaper reserves than we had acquired for onshore. In the Potiguar Basin, we paid on average $3.5 and in the clusters of Reconcavo Basin, $4. Here on slide seven, we have a map that we have shown a number of times, but we show it a number of times because every time we show it, it is because we signed a new asset. And this is the case of square box number nine in the Potiguar Bay and in the upper part of the map. As I mentioned, we are very proud to have signed the largest cluster that we have acquired. With that total production of the nine clusters that we currently have in our portfolio amounts to around 45,000 barrels corresponding to our working interest. So this is relevant production. Around 80% of this production, according to our original thesis that we always mentioned, comes from onshore or near shore fields. Those fields that are very close to the coast are normally connected by pipelines and automated platforms with a very low lifting cost, thus reinforcing the thesis of 3R Petroleum since we got started. On the next slide, we include the acquisition of the Potiguar Cluster. These fields in dark green, including three sub-poles, Canto do Amar, which is the largest field in the Brazilian onshore, Estreito and Alto do Rodrigues, which are the largest fields producing heavy oil onshore in Brazil, and the Ubarana field, an offshore field that will be added to the offshore fields that we already have in our portfolio in the Potiguar Basin. In light green, we have the clusters that we're already operating, such as Macau, Areia Branca, and two clusters for which we are finalizing the closing and finalizing the operating transition, which are Fazenda Belém in the state of Ceará and Piscadera Baiana Cluster, a gas platform very near the shore. You can see that the Putiguerre cluster alone today produces almost 21,000 barrels. So it is a very relevant cluster in terms of production. With it, we have those 45,000 barrels that I mentioned in the previous slide. Any more color to the Periguara cluster acquisition? You can see that this is a cluster with many important fields in the Periguara basin, almost 4 billion of volume of oil in place. In other words, it is a very large cluster in terms of the upstream. As we have mentioned, the cluster produces today almost 21,000 barrels. But if you look at the historical production graph, we can see that this cluster once had a peak production of over 70,000 or 80,000 barrels. Before 2016, the cluster had a stable production of around 37,000 to 40,000 barrels, which is now our target. It faced a significant decline starting in 2016, but this is our expertise. In other words, our expertise is to avoid the natural decline and to bring production back to prior levels at the cluster. In this graph in gray, we can see the full cluster. Just a Paraguay cluster and in the dark green we can see the main upstream asset which is the Canto do Amaro field. Canto do Amaro once produced more than 30,000 barrels. It has also been facing a long decline. It is one of the rare fields in Brazil where we can see a second or even a third hump as I call it. A second or third wave of new oil. And well, I'd like to say that this wave, starting in 2004, 2006, was a project led by the current 3R team when we worked at Petrobras as part of a big revitalization program that took place in a few fields in the Northeast, the main one being Canto do Amaro. So the strategies that we applied some years ago have proven to be effective. And this is what we intend to do in Canto do Amaro and in other fields at the cluster. Now this cluster, in addition to all of the fields and the importance that it has, As a large oil producer, this cluster comes with a complete infrastructure for processing, refining, tanking, storage, and transportation because it includes a network of oil and gas pipelines from the Potiguar Basin onshore, and it also includes the Guamare terminal, which is a large industrial unit for the separation of water and oil coming from all of these fields, including all of the fields that we operate today. And it has the possibility to store almost 2 million, actually 1.8 million barrels that can be stored. Quite relevant. And it has a port, the Guamarech terminal, through which we have access and the possibility to export our crude oil or oil byproducts to other countries and to other regions of Brazil. So this cluster which has up, mid and downstream capabilities brings great operating flexibility to 3R in the Brazilian onshore scenario. Now let's look at our current operations of 3R Petroleum and our performance. We're also very proud of these results, as we have mentioned in the highlights in the beginning of the presentation. Well, let's start with Macau. Please focus on the charts on the top of the slide. You can see that in one year, comparing Q4 2020 with Q4 2021, we had a 33% production increase. But when we look at the graph on the right, when we compare here, already including our production of January 2022 already totaled and disclosed to the market, and comparing with the production that we received from Petrobras of less than 4,000 barrels, 3,800 barrels, we're getting close to 6,000 barrels, which means a production increase of almost 60% compared to what we found. As you see, this is a very strong increase, as I mentioned before, and I'm not going to repeat myself, but this was achieved basically with a higher operating efficiency. In terms of capex, we only had some workovers using a workover rig, which means opening new reservoirs in existing wells. We haven't drilled new wells. And as clearly stated in our reserves certification, drilling is the biggest revitalization strategy. So we will be starting from a very strong baseline to start the drilling campaign. We should start in the second half of this year. So the basic production increase has already happened, even without the drilling campaign. In the same effect, actually, please forgive me, folks. I would like to highlight also the great production increase which happened last month from December 2021 to January 2022, when we had at Macau Cluster a month by month production increase of 13%, also showing that we continue on our growth curve, as we have always said. I always like to stress a disclaimer, though. We are not saying that we will have all subsequent months posting these production increases compared to prior months, but we have been doing that in recent months and we intend to continue. Now, looking at the performance of Rioventura cluster, you can see that we posted growth. Actually, we had two quarters as operators and nothing else. but we were able to post 18% growth that I had mentioned. But when we compare production in January 22 with the last month operated by Petrobras, we recorded significant growth in very little time, 22% in the Reconcavo Basin, in the Rio Ventura Cluster, that includes the Agua Grande field where we have been concentrating our efforts. So to conclude, We are very pleased with our operating performance. Costs are still under control and we have had zero accidents and incidents. So ours are very safe and efficient operations as we have always claimed that we would have. And we are very proud to be presenting very robust results. With that, I turn the floor to our CFO and IRO, Rodrigo Pizarro. Rodrigo, go ahead. Thank you, Savini. Good afternoon, everyone. I am Rodrigo Pizarro, Chief Financial and Investor Relations Officer of 3R. Please go to slide 11, where we present total production of the assets operated by 3R. We produced around 8,000 barrels, considering the working interest of TRIOR in the assets mentioned, which are Macau, Pescada, Rioventura and Duna. A very relevant production when we compare quarter on quarter and with the same quarter of the previous year. On the following slide, we present the breakdown of production by asset in our portfolio. Including the Potiguar cluster, we produced 45,000 barrels a day related to our stake of the assets. with 78% of the production coming from assets onshore and in ultra shallow waters. On one hand, we have scale, which an independent company wishes to have, which is normally only achieved with offshore assets. And on the other hand, we have pulverized production across hundreds of wells, which brings us resilience, and predictability for our cash flow with costs primarily pegged to onshore assets. On the next slide, number 13, we present the gradual revenue increase of the company. We posted about 250 million BRL and the sale of oil represents 96% of the sales in 2021. On the next slide, slide 14, we present our adjusted EBITDA of 83 million BRL in Q4. If we exclude the payment of bonuses and expenses and costs linked to the assets, which are still in a transition phase, EBITDA would total more than 150 million BRL. If we look at the adjusted EBITDA for 2021 full year, we totaled 357 million BRL with a very positive margin of approximately 50%. even including expenses and costs of assets in transition and without considering their respective revenues. On slide 15, we show you our lifting costs. We continue with a very positive lifting cost positioning the company among the most efficient in the world. In 2021, we had an average of $8.1 per barrel of oil equivalent, even considering the gradual increment of energy costs Other inflation pressures and the recent addition of assets with a higher lifting cost assets that are still in the initial phases of the revitalization process. Macau, which is the cluster very near Canto do Amaro field, the largest field in the particular cluster, remains with very high efficiency and a lifting cost of $7.53 per barrel of oil equivalent in Q4. In terms of capex, the company gradually has been increasing its ability to invest in work overs in the wells and on instrumentation and control of the fields and capacity to treat fluids. In Q4, we invested about $11 million, totaling $26 million in the full year. In other words, very little when compared with the production increments already mentioned by Savini. On slide 16, we present our cash position and our obligations to Petrobras. We ended 2021 with a net cash position of approximately $441 million, compatible with short-term obligations and with the payment for the signing of Potiguar Cluster that happened on January 31, $110 million, referring to the signing. Also on the slide, we present our hedge position in the end of 2021 with around 2 million contracts at future value. NDF at around $65 per barrel and about 600 contracts in the color format, a structure of options ensuring protection at around $50, which also limits the upside to around $67.5. Lastly, on the last slide, slide 17, we present the next steps for the company. But the take-home message from the management is that we are focused on execution, on the safe and efficient transfer of our assets that are still being operated by Petrobras, and on the analysis of opportunities, both for financial structuring and partnerships for the closing of the Potiguar cluster. We remain focused on continuous improvement of the operations of Macau, Duna and Rio Ventura clusters and evaluating opportunities to bring forward investments in work overs in the wells and drilling, which will result in a dilution of fixed costs. Lastly, our ESG agenda is becoming stronger as one of the pillars of the company with the recent creation of strategic committees to advise the board. In addition to social projects, the highlights already mentioned by Savini and the structuring of a strategic agenda directed to efficiency, reduction of greenhouse gas emissions and water discharge into the ocean. Thank you very much. And we will now begin the question and answer session. The whole management will be available to address your questions. Thank you very much. Well, thank you all for joining us. We have more than 200 people attending. We got a number of questions. Many of them related to the bonus that caused some noise in the market. So we'll start addressing that topic. Savinia will begin and Pizarro will add some remarks. Thank you Godoy. Well, hello everyone. Now we are live. We're live in the call. Talking a little bit about the bonus. There are a number of things to be mentioned here. And perhaps we need a more transparent communication strategy. But starting with that, our decision at 3R is to be as transparent as possible. Not only did we include the payment of bonus, in the actual realized in 2021. But we also include in our budget a bonus program for the year of 2022. And we prefer to provide this kind of visibility to the market than to mix the bonus program as companies kind of do with other line items in the balance sheet. So we decided to have full disclosure of our bonus program, which in my view aligns the workforce with our shareholder base. Due to the reaction of the market, I think it's kind of peculiar and curious as if this was a lack of alignment, which it is not. So that's the first thing. This has been approved by our management and by our board and in the shareholders meeting. A payment of bonus referring to the year of 2021 basically packed to the performance of the company, which, as we saw along the presentation and we have been showing this in successive quarters, the performance of the company has been, at least in my view, spectacular. A very strong performance for a company that is still getting structured because this is a whole new M&A market. And something else I would like to say, our bonus program is not linked to the management of 3R. Perhaps somebody is having this kind of relationship But I would like to publicly mention this. In our bonus program, the whole management participates, all managers of the company and many engineers, geologists, petrochemicals, high level technicians, even if they are not managers, they all take part in this variable compensation program. This is what we're talking about. A good part of the annual compensation package for a good deal of 3R professionals is variable compensation because we want to have everyone on the same page aligned around our goals because our employees are very important. We want to align the interests of the key employees with the shareholders' interests. And relevant information, 207 people, 207 professionals of 3R take part in the variable compensation program. So we are talking about $5 million gross amount For the size of 3R, this is not relevant. And yes, it was in our plan. These $5 million, give or take, are divided by more than 200 professionals, to be exact, 207 professionals. So I just want to convey some peace of mind. If our shares are suffering today, It is because this management is very transparent. We have nothing to hide. Several 3R professionals take part in the variable compensation program. It is in their contract. So they are paid by a monthly fixed portion. Almost all of them are FTE employees. Only some officers are statutory. So a little over half of the compensation is fixed and a little less than half is variable compensation linked to performance. Basically corporate performance, performance of the managers and officers of the company who have very clear goals approved by the management, by the board, and that have provided excellent results. Like we said, two follow-ons, a very strong capital structure, zero debt. We ended the year with zero debt in the company. Very solid production increase in an industry that involves hazardous accidents and we never had one. So we're very safe. Our team is very dedicated, very focused, and I think nothing is more fair than sharing part of the value generated by the company with our employees. This was the strategy and this was the strategy that we always had. Like I said, many professionals have a bonus target included in their S A S A S A S A S A S A S A S A Some officers joined the program, but this is a very comprehensive program involving a lot of people, people who are important for us, for us to achieve the results presented and for us to achieve the results that we aim to achieve along 2022 and in the coming years. So we all have a lot of peace of mind here. We believe that our program is quite modest considering oil and gas industry standards worldwide and here in Latin America. Our team is very much focused on cost. Our lifting costs continue to be a benchmark in Brazil. And our focus is to both increase production and reduce cost and not total cost, but rather cost per barrel, because that is what matters in a mineral commodity industry. And the focus of our team, our leadership and our professionals is 100%. And that's why everyone's interest is aligned. The three are workforce aligned with our shareholder base. I'll turn the floor to Pizarro. But before that, I'd like to say that we are totally available to answer your questions, to answer any doubts you might have in a very transparent way. And because of that, I would like to publicly say that this was a decision by the chairman of our board. that we should have a fully transparent bonus program, totally aligned with the management of the company. Pizarro, over to you. Thank you, Savini. Hello, everyone. I just want to give you some data, general data for the market. As Savini mentioned, we had 207 employees and members of the management included in the 2021 incentive package. An important part of the incentive package is pegged to a phantom share model. In other words, it is not exactly a bonus package, pure and simple. It is a bonus package also linked to share performance. If we look at a two year horizon, the company had an IPO at R21. Our share is substantially appreciated, has been appreciating in recent months. Before we approve the total incentive package. I would like to say that we have commitments by the management, the managers and the whole workforce to achieve operating and strategic goals. To name a few in terms of production, our oil production S A S A S A S A S A S A S A S A S A S A S A S A S A S A S A S A S A S And if we calculate how much the company invested in work overs, this is also very transparent in our release. If we divide it by the reserve that was added through these activities, we have less than $5 per barrel of reserves that were added by extremely efficient activities. So also regarding CAPEX, the company had an extraordinary performance. And that's joining the drilling campaign, which is the strategy that we are building for the other clusters, including Macau cluster, starting this year. Of the total bonus amount, which is explicit in our documents, we have about 23 million reals of gross value, including income tax. and that was paid to the management and professionals of the company. Net of income tax, the net value is 17 million rials. Of this net 17 million, about 7.1 million rials is what was distributed and paid to three holding executives, the statutory officers of the company, including The executive officers and board members. So it's not an absurd volume. It's not an out of reality volume. Of course, there are several ways of looking at the amounts paid. If we look at the amount, pure and simple, if we compare with the EBITDA of the company this year, we come to the conclusion that yes, it was a relevant amount. However, If we compare with what this company has been building in terms of capital capacity, strategic acquisitions that will take the company until the end of the year to have more than 25,000 barrels of oil equivalent. Most of it oil, as we mentioned, more than 90% of our revenues come from oil. with around 20,000 oil barrels and about 6,000 barrels of oil equivalent gas. By year end, we will achieve a significant capacity to generate EBITDA. And our goal is that by year end, we're going to have a GNA per barrel of oil equivalent below $4 per barrel, which is compatible with Latin American Onshore companies and with companies around the world that have between $3 and $5. I've always said that onshore companies tend to have a GNA per barrel slightly higher than companies that have a significant production offshore. Why? Because naturally our teams need to be highly skilled. The number of geophysicists and geologists, as Savini mentioned, to assess dozens of oil fields acquired is quite a high number. And unlike what has been said in the market by one of our peers, we don't drill without assessing before. We have a very strategic path. to build our CAPEX plan and to be successful in our operations, as has been the case. And I think that it is also worth highlighting that in addition to operational metrics in 2021, we had a strategic path in acquisitions, which was very relevant. The acquisition of Potiguar Cluster that was signed in January of this year, but there was 100% negotiated in 2021. brought to the company an asset that can at least double oil production, at least double EBITDA. And with an extremely attractive multiple, if we compare particular close requisition for $1.4 billion, comparing with the Norte Capixaba Cluster or Carmopolis Cluster that have a production volume which is a lot lower compared to the amount that is being paid for these deals. Also in Potiguar Cluster, we have the mid and downstream which does not exist in any other cluster. So this is a very relevant in mid and downstream with high storage capacity and high S A S A S A S A S A S A S A S A may be exported with Potiguar cluster. Also considering our share of Papaterra over there, 100% of production is able to be exported since it's offshore. With that, we're going to move to other questions. But again, we are 100% open to answer your questions. We are 100% transparent for any questions related to this theme of the bonus. There's a question here about the lifting cost. I'm not going to be reading questions directly because there's a huge amount of questions. So we'll try to address more than one question in the same answer. If we look at our lifting cost for the company and the lifting cost of Macau, We have very high operating efficiency compared to other assets that are in a much more advanced production stage, which is the case of 3R. I'd like to remind you, we are in the process of acquiring and transferring assets simultaneously, many assets being transferred And as I mentioned before, and Savini has mentioned before, we have a backlog of operating activities which were not being carried out by the former operator. In other words, the moment we take over a field, it is in its lowest limit of production vis-à-vis our plan. We have an increment of operating expenses to do what was not done by the former operator. All of that aiming to have integrity, zero risks or aiming for zero risk, trying to mitigate as much as possible any environmental problem or accidents and incidents with our third party contractors and our employees. So when we take over these assets, they come with a higher lifting cost. Having said that, looking forward, our strategy is to achieve a lifting cost this year below $15 per barrel when we think about the whole portfolio. And always, as we mentioned, as of 2023-24, when we have production increment in all of the other fields, not just Macau, We want to be with $11 to $12 for the whole portfolio with the onshore portfolio below $10 per barrel. This is something that we always like to stress. Obviously, just like the rest of the market, we are suffering inflation pressures, pressures related particularly to the cost of energy. But this will be fast resolved, particularly in Macau. When we complete our gas to wire plant, we have hired, we have obtained the necessary environmental licenses. We even included a small picture in our release. In the next institutional presentation of the company will bring you other photographs, but the system is in the final assembly stage and we'll move to commissioning in the first half of the year with the ability to generate energy corresponding to 70 to 80% of the whole consumption at Macau could be could reach 100% of installed capacity by year end. There's a question regarding our ability for financial structuring for the Potiguar cluster. Of course, we have to remind you that for any acquisition, particularly one as relevant as Potiguar, we always assess an optimal acquisition structure in terms of debt and equity that we want to have for the acquisition of the different assets. If we Analyze acquisitions prior to particular cluster. We understand that we have 100% of the financial structure completed. If we consider particular, we understand that a relevant part of the equity, if not 100% of the equity has been brought in to the company with the two last follow-ons that we had. So, of course, if we look at the follow on as a successful goal, this is linked directly with our ability to acquire assets and attractive entry multiples. For Porte Guaraclostre, we are assessing opportunities of financing, loans and partnerships. We don't have any mandated bank. We haven't had any legal office hired so far. Thus, we will not be informing the market regarding this process of financial structuring. As soon as this is decided and formalized internally, we will disclose to the market our expected financial structuring, which is being discussed with mainstream banks in a very intense process. I'll turn the floor to Mauricio Diniz, our offshore operating officer, who will speak a little about Papaterra. There was a question about Papaterra. Okay, I'm going to detail our actions to bring in Papaterra, one of the main contracts that we have. We have the operation and maintenance contract. We're in the final stage of negotiating this contract with some companies. We should be signing it soon to start training the team as quickly as possible in agreement with Petrobras. There are two other important contracts of maritime support and a contract for air transport support. These two contracts are out there with requests for proposal and very soon we should be signing these contracts. Other important actions. Licensing. We have submitted documentation of part of the documentation and we are waiting for an answer from the authorities. In other words, there's nothing in Papa Terra that can be seen as a hurdle or as a limitation for us to proceed with the closing of Papa Terra. Additionally, we are monitoring the operation together with Petrobras, so we are following everything that is happening, so we understand that this transition is going to be quite uneventful. Pizarro, I'm going to mention the other closings. We are very close to complete the closing for two assets, the Reconcavo Cluster in the state of Bahia and the Fazenda Belém in the state of Ceará. We still await some approvals by ANP. And even today, one is being evaluated. So in the coming weeks, We will probably have no hurdles to proceed with the closing of these two assets for offshores. Peru, we are still waiting for an answer by IBAMA, the Environmental Agency of Brazil. This answer was promised to Denise for the end of this week, so very soon. And I understand that this should be expected, PERUA closing should be expected by the end of March. And for Pescada, I think we spoke a little about this in the previous conference call. This is the asset that was not a priority for IBAMA. As soon as PERUA is complete, IBAMA will continue to analyze Pescada and Rio Grande do Norte state. And so we expect closing more towards April. Because the technical work at IBAMA is quite advanced regarding Pescada Cluster. But first they need to finish with Perua and then they will finalize their analysis of Pescada. So this is news and in a couple of days we should have the closing for Reconcavo Cluster, which is a great cluster in terms of production and reserves. Well, there is a question here by Andrea Ribeiro with Brasil Capital regarding transition costs. Andrea, thank you for the question. I think that this is an important aspect that we need to keep in mind here in the current status of the company. As Sabine has just mentioned, we are very close to complete two closings. In other words, we need to have the team 100% prepared. We have to have our G and A packed to the asset, totally prepared because at any time we may get final approval by ANP and the environmental agency to take over these operations. So for these assets, which are not offshore assets, we are 100% prepared. For offshore assets, which is also an important part of these 40.8 million Reals. I would say that we are 95% prepared to take over Perua Cluster and we are in the process of preparing for Papa Terra Cluster. What does it mean? We have the supply team, we have the technical team, We have the geology and geophysics team and the operations team evaluating what will the first activities implemented be in Papaterra and Peruá and any other transition asset. Of course, there's a mismatch. We have GNA and OPACs before we actually have the corresponding revenue from the asset. And that's why we prefer to highlight this. This is going to be recurring until we get to the final closing. Until we have the closing of Potiguar, we'll always have expenses that we will break down for the market. without the corresponding revenue. On the other hand, it's worth reminding you, and we made this very clear in the release, that we have about $18 million estimated by the company worth of cash generation along 2021 alone for those assets where the cash flow in the transition period will be deducted from future payments to be made to Petrobras. So we have both Papa Terra and Pescada Arabaiana and Fazenda Belém as assets where generation of operational cash of the asset during the transition period will be deducted. So to simplify things, In terms of cash generation and administrative and operational costs for the company, we had around $18 million on 2021 and around $40 million BRL of operational expenses in the period. There is another question related to Potiguar cluster. S A S A S A S A S A S A S A S A S A S A Well, they bring flexibility. So instead of having one, two, maximum of three potential buyers for our onshore oil, as it happens to most of the companies exclusively focused onshore, we now have an array of potential buyers compatible with offshore assets. Any trading company In our case, because we have distributors sitting next to Potiguar area, we have direct access to distributors of oil byproducts that translates into competitiveness, flexibility and higher oil sale prices. This is our expectation. And for the oil from Potiguar cluster, it is a better quality oil. which tends to have very low discounts compared to the brand. There's a question here about the relinquishment of a block in Potiguar Basin. We tried to make it very clear in our advisory to the market that the relinquishment of this asset has nothing to do with the acquisition of Potiguar Cluster, that this block was actually acquired by the former S A S A S A S A S A S A S A S Some of them we see as having a potential, which is the case of Camarón. It has a production potential, a reserves potential, particularly for gas in a better and better gas market. And in the case of this block specifically, our evaluation, our assessment was that there was no reason to keep this asset in the portfolio. In other words, we relinquished it. The asset had no Minimum exploratory program linked to it. This had been already done by the former management, and so we relinquished it. And just to stress what you said, Pizarro, just to make it clear, this was an exploratory offshore block. It is not in the middle of the onshore fields that we have in our portfolio. It has nothing with our production area. And with a very low exploratory potential, even other blocks that came from the old Ouro Preto that have had the minimum exploratory potential already or minimum exploratory program already fulfilled, well, Some of them we maintained in our portfolio for several reasons, several strategies. Why do we maintain an exploratory block with three ore at this moment? Because there's somebody drilling next door. If they are successful, our block, our acreage will appreciate immediate flame. So that's why we keep it. And that is the name of the game in exploration. But this one that we relinquished had no exploratory potential. So we decided to return it. Here there is a question about the Guamare asset operation. What I want to tell you is that this asset is not part of the core of the company, but the Guamare asset has some parts. There's one part about fluid treatment and separation, and this is very much the core of the company. We know how to operate that. We have part of the activity which is linked to a refinery on site and there is the port. The port has no operation stress for us. It is compatible. And as for the other part of the asset, the industrial part, we have people in the company today. And to be very quickly, they participated in the land preparation of Guamare. There are people here at the company who know every pump, every separator, so there will be no stress in operating the Guamare asset. If the company will validate a partner in the future, that's another story. But in operational terms, there will be no difficulty in operating the asset as a whole. And again, I just want to stress, it's a good thing you mentioned Denise, but I just want to make this very clear. All of that is core for an oil and gas company. Like I said in the presentation, We have some of the largest onshore fields. And in the Guamare acid, we have the water oil separation plant. It separates oil from water from all of the fields. So we are trying to be very clear and transparent to the market. Guamare is part of oil processing. Oil is mixed with water until we get to Guamare. So we can never get rid of Guamare. What we maintain is the option to bring in perhaps a partner to operate or a partner for the mid and downstream processes. But we are going to analyze that very calmly in the future. We have paid for the cluster. We don't need a partner to sign the deal. and we'll be assessing strategically if it's worthwhile having some kind of partnership for the whole cluster, for Guamare only or not. It really depends on our ability to have funding. As Pizarro mentioned, Guamare will give us a lot of flexibility He lives through your totally independent from any other player. And this is something that any oil company wishes to have this kind of independence and flexibility. And of course we wish to have that too. It is not by chance that we actively participated in this bid with Petrobras. This has always been our dream, right, Pizarro? The Potiguar cluster, our number one item in our wish list. And we acquired at very low prices considering the Brent oil prices today. And Dr. Lisa Vini. I think that as we always like to say, Potilguar is the largest and the best onshore shallow water asset put for sale. And we had a favorable deal for 3R. Substantially better than other deals that we have been looking into, considering the divestment by Petrobras. Now, going back to one aspect regarding the compensation of the management, we received here some questions related to the value foreseen in the reference form and the value set forth in the compensation proposal. It is important to highlight here that all payments made as bonus as incentive package respect to both the limits of the AGE and the limits set forth in the reference form. In the reference form, we have values to be paid by three or a holding to three or oil and gas. And as part of the compensation proposal, there are payments to be made both by the holding and by its subsidiaries. I'm going to read in the proposal approved in the AGE of April 2021, the shareholders meeting compensation proposed to board members amounted 3.38 million BRL in cash and for the officers of package off to 16.8 million BRL for cash compensation also approved in the same shareholders meeting. The amounts paid as I mentioned were lower than these upper limits approved in the AGE shareholders meeting. And the amounts indicated in the reference form are also lower. than what appears here in the list. Well, one last question about water oil separation plant. Sabine, would you like to address that? Sure. Sure, I can answer. I can talk about that. You will remember that our plant has two phases. We have a free water knockout which is already installed and that we should start operating as we have been saying in recent months now in March. So we're about to start the free water knockout. It was manufactured in Texas. It's been here since December. and the plant as a whole should start operating well they will remember that two plants actually for water oil separation in the Salinas Cristal and in the Serra Macau fields and they will be commissioned according to plan in May including the fiscal meters which was one of the bottlenecks We're impacted by the pandemic last year, but that we had rescheduled and we are now on schedule. So by May, you should be commissioning those. Having said that, it is important to say that our production at Macau is doing quite well. The result of our work overs, the opening of new reservoirs in existing wells has given us exceptional results. Our operating officer, Jorge Lorenzon, our technical director, and Grijalva, they've been working hard. Edding fresh oil in a field that has been operating for decades now. So we are now on the way to double the production that we found in Macau. And I stress without drilling one single well. I take this moment to give you another piece of news. We should start drilling in Rio Grande do Norte clusters now in the second half of the year. We are working hard and strong in our supply chain. S A S A S A S A S A drilling campaign for Rio Ventura, bringing it a little forward compared to our original plan. So I just spoke about these two things together, but it's all underway with the plant and it's all underway for us to start drilling and to intensify things in 2023 in several clusters. And even without the commissioning of the Water Oil Separation Plant, our production is at a very strong level and we are on our way to double production at Macau Cluster. Well, to end the Q&A session, we would like just to stress, as Savini mentioned, that we are open to interactions with the market. We are available to answer any further questions you might have. Of course, providing the information that we are able to provide the market. We are working with our people and compensation committee, which was recently created. when we set forth all of the targets linked to the compensation package for 2022. Naturally, what we will have as parameters are share performance, lifting costs, administrative expenses, capex deployed, and obviously EBITDA. and the Brent oil price. Of course, if the Brent increases, EBITDA has to increase as well. EBITDA margin and GNA administrative expenses with a maximum target of $4 per barrel of oil equivalent. And this in December of 2022, annualizing December production. In other words, these are very, very aggressive targets and we are working hard just like we did in 2021 to achieve them. And I think that it is quite clear for the management of the company. We want to give you comfort for eventual payment of bonus. The targets have to be attained. Of course, we intended to do this in 2021 and we did. And in 2022, in the coming weeks, we want to bring this 100% structured and very transparent to the market. linking this to Phantom share packages, like I mentioned, that include share performance and operational and financial parameters for the company. Thank you very much for attending this conference call. Savini, would you like to say any final statements? And I would like to thank you for your attention on behalf of the other officers. Thank you, Pizarro. Tuan, thank you very much for your attention. As Pizarro mentioned, we are 100% available. And I'd like to stress that we will continue with our work. And following the plummeting of our share today, I got really surprised with the reaction of some investors and analysts to a program that should be seen That's something that aligns the management, but not just the management, the workforce of 3R aligned with the shareholders. I really get surprised. I'm very candid with you. I'm utterly surprised. But regardless of our share value, we will continue to work with a lot of safety, with a lot of operating efficiency, increasing our production, doing what we love to do. Regardless of the investors that decide to sell our shares at any time, of course, we are all here defending the value of our shares. We'll continue to do so, but obviously respecting all stakeholders. Investors are one of them. The workforce is another stakeholder. So thank you very much. And we will continue working hard to increase production at low cost, as we have always mentioned, and very safely. Thank you very much.