Brava Energia S A S/Adr

Good afternoon, everyone. Welcome to 3R Petroleum First Quarter 2024 Earnings Conference Call. The presentation and comments about the results will be presented by Matheus Dias, CEO, by Rodrigo Pizarro, CFO and IRO, and by Maurizio Diniz, Exploration and Production Officer. We inform that the simultaneous translation feature is available on the platform. To access it, simply click the interpretation button at the bottom of your screen and choose your preferred language. This conference is being recorded and will be available on the company's investor relations website, ri.3opetroleum.com.br, as well as the presentation that we will show here. Please be advised that all participants will be in listen-only mode during the presentation. Then we will begin the question and answer session when further instructions to participate will be provided. Before proceeding, we take this opportunity to stress that forward-looking statements are based on beliefs and assumptions of 3R's management and on current information available to the company. Forward-looking statements may involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts and journalists should understand that events related to the macroeconomic environment, the industry and the other operating factors that may cause results to differ materially from those expressed in the forward-looking statements. We will show a brief video with the main ESG actions of the company.

Environmental 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 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 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 A S A S A S A S A S A S S A S A S A S A S A S A S A S S A S A S A S A S A S Promoting health and well-being activities for employees and the communities Education and Development Coding Workshop S A S A S A

We will now begin the presentation, turning the floor to Matheus Dias, CEO of the company. Mr. Dias, you may proceed. Thank you. Good afternoon, everyone. Welcome to our earnings conference call of 3R Petroleum, referring to the first quarter of 2024. The presentation will be made by myself, Mauricio Diniz, our CEO, and Rodrigo Pizarro, CFO and Investor Relations Officer. We're starting on slide three. We have an introduction of the main events, achievements, and points to be highlighted in First EQ24, which will be better detailed in a moment by Pizarro and Diniz. Firstly, Through the right of governance of the company, we discussed a distribution of 92.6 million in dividends, which represents the minimum compulsory and has as a base the profit recorded in 2023 fiscal year. In terms of total production, in Q124, the company posted 44.4 thousand barrels of oil equivalent daily. A substantial increase year-on-year and quarter-on-quarter, and also compared to the 2023 average production. We had a slight reduction of 3.3% quarter-on-quarter. This drop quarter-on-quarter is explained mainly by Interventions or workovers to replenish ESB pumps at Papa Terra Cluster. This was already something expected for this year. Because these pumps were in operation for quite a while and considering the lifespan of the pumps, the only difference, and this is totally probabilistic, is that we expected to stop these wells in the second quarter. This happened in Q1. But in terms of the annual effect on average production, this should not have any impact on the average production of the year. There were also not very relevant events onshore of intermittencies in the electricity supply in the fields. But this, as I mentioned, had very little impact. On a positive side, sustaining the production increase of 3R, the company continues to execute its CAPEX plan in two main groups. The first, a number of interventions and work-overs performed in this quarter, more than 300. And on another front, maintenance projects and expansion projects for the topside equipment. which support and will support growth coming from these activities and well workovers both in the mid and long term. Regarding financial performance, the company posted 2 billion BRLs in total revenues, including the segments of upstream and middle stream, and Isaho will give you more on that as I said, and an adjusted EBITDA of approximately 725 million BRLs up 4% quarter on quarter. In terms of EBITDA margin, not considering intercompany and corporate effects, upstream segment posted a record margin of 54.1%, an important mark in our production journey. And the middle downstream had a margin of 4.3%, still within the expected range. but a little below our target. We believe that by Q3 we'll reach around 6%. We would also highlight that the lifting cost of the company Convalidated and weighted, remained stable, flat with $18.6 per barrel, quarter on quarter. And we had an already expected increase in the onshore front, given this momentary interruption of production given the workovers, but still we remained with $18.6 per barrel as a lifting cost. Another very important aspect, and now talking about capital structure of the company, was the materialization of some debt instruments, both local and the issuance of bonds. These will bring relevant improvements in balancing the duration of the consolidated debt of the company. Lastly, I would like to stress our perception that the company, through its portfolio and robust business model, has elements that place it in an interesting position in the industry, together with other oil and gas independent companies, particularly with the backdrop that we have seen recently of potential deals of business combinations. And we know that all of these bring and will bring positive results. Because we are always pursuing greater scale and scale is very important in oil in the oil industry. Well, with this overview, let's move to the next slide. Here we have the charts that show in this the financial performance and the operational evolution. As I mentioned, operationally speaking, we reached 44.4 thousand Barrels of oil equivalent of average production with a slight decrease quarter-on-quarter, but with an important increase compared to the average of 2023. As regards the financial performance, I'm just giving a spoiler here, but Pizarro will give you more. I highlight a slight increase of adjusted EBITDA quarter-on-quarter despite the production decrease. which was expected as I mentioned and this is explained by the return of mid downstream and some improvements in trading conditions and in monetizing our products. Moving to the next session and here before I give the floor to Mauricio Diniz who will be giving us operational and commercial highlights, I will just mention the evolution by quarter of our trading conditions. to continue evolution of commercial aspects quarter by quarter regarding the uptakes of oil. In the first quarter, average selling price was $75.5 per barrel, 91% of the average brand price. Overall, Our onshore business line contributes a lot to the consolidated average, mainly given the integrated logistics through the oil pipelines. This model brings us some relevant points in terms of unit cost, but the integrated logistics undoubtedly gives us a positive effect in terms of monetization because of this integration and more flexible production chain. As for the evolution of gas monetization, we continue to be very competitive in monetizing the molecule with a selling price of 13% of the average brand price. This is because of our commercial efforts to diversify our portfolio of customers, but also the selling modalities of the contracts. where we always look for an adequate proportion of those firm ones that bring us safety and the interruptible ones, spot modalities or put modalities where we can capture an upside. Having said that, I now turn the floor to Mauricio Diniz, who will be presenting the main operating highlights. Thank you, Matheus. We'll now speak a little about production divided by cluster. Starting with Potiguar Complex, as we can see in the upper chart, we highlight a continuous and consistent increase in production at Macau cluster. We reached the mark of 7,400 barrels of oil equivalent a day, 81% of that being oil production. If compared with Q1 2023, this means a 68% increase, mainly due to the optimization of well production, the completion of drilling and start of operation of wells linked to the campaign in Salina Crystal, and some workovers in the area. As I will be showing in a minute, the lifting cost of this area maintains a reduction trend, being 6% lower quarter on quarter. For Macau, we also highlight the continuity of the works and adaptation of facilities to increase production, the expansion of processing, processing transport capacity of fluids and gas treatment and processing. On the bottom chart, we can see the progress of production for the whole particular complex, which is slightly higher quarter on quarter along Q1 2024. carried out 265 well activities, supported by a fleet of 12 work-over rigs and one drilling rig on site. The capex of the particular complex amounted to almost 50 million dollars, basically linked to the rig work and adaptation of our facilities. An important project is the steam injection in Alto dos Rodrigues, which includes an overhaul, complete maintenance of the generators, which were inoperable, and revitalization of four steam stations. One of them, station 5, was already revitalized. with a solution of four steam generators that were relocated from other areas. One of them is already operational. In this station, we are going to have two more steam generators expected to arrive in Q3 2024. When the installation of the six generators is complete, in that area we are going to have the injection of another 2,000 tons of steam daily. The works on the other steam generation stations are on the way to receive three new generators starting in Q4 24. With these 2,500 tons that are additional We will have installed and operational all our steam needed for the current production phase at Alto do Rodrigues cluster. I'd like to remind you that replacement of the contract that we had last year. The contract for these new generation generators, the contracts have been signed, they are ready and they are in a commissioning phase and in the preparation phase to be delivered to Brazil. On the next slide, let's speak about Reconcavo complex in the state of Bahia. In this quarter, we maintained a continuous increase of production, and this production has been increasing along many quarters, as you can see. In comparing with Q123, we increased production by 32%. In Bayou, we are operating with 7 work-over rigs. And we'll have another two drilling rigs in this quarter. One of them is already operating in the CXF field that started drilling last week. These seven rigs worked on 36 wells, considering workovers, equipment replacement or exchange, and well reactivations. The CAPEX program is mainly invested in the work over a campaign and on revitalization of the facilities, aiming to have production increase. On the next slide, let's speak a little about Papatea cluster. As mentioned in the presentation of our earnings last quarter, we are acting on the wills, exchanging the wills and working on the umbilicals to resume production. Of these, Papa Terra 12 and 37 have gone through work over rigs and we are working on the umbilicals to put them back into production. The rigs, once they leave Papaterra 17 now in May in the TLWP, the next one will be Papaterra 50. So in the next quarter, we are going to have resumption to normal production at Papaterra. These ESB or seabed pumps operated, as Matteo said, during the expected lifespan of three to four years. The important thing is that we are going to have new pumps in five of the seven wells. Another important well where the pump was not exchanged is in the TLWP. With the new well to be drilled, Papaterra 52, the rig has been contracted and we are waiting for the environmental license to get started. We have been in frequent contact with IBAMA. All documents and studies have been submitted and we are monitoring the process day after day. IBAMA has given our operational licenses. One example is that we are completing the abandonment of five wells. with this rig in Papaterra. A big improvement in Papaterra refers to integrity recovery. It is responsible for a good part of the losses that we had last year. We can highlight the availability of the tanks. I'd like to remind you, we would have offloading every 10 days. Now we can offload every three to four weeks, reducing our cost. The offloading system. As soon as we had the closing, we were operating with an offloading system, an emergency offloading system. Now in Q1, we completed the recovery of the main system and we are now in a commissioning phase for this system. We completed the overhaul and complete maintenance of one of the power generators, ensuring greater reliability for the unity. Maintenance of the others is being performed with new parts, thus also increasing reliability of these other generators. A big change, however, regarding integrity. will be the startup of the maintenance unit. The good news is that this week we got the environmental license to operate this unit and next week it will sail to be close to 3R3. It will be connected for 90 to 120 days with a production stoppage expected to last 15 to 20 days in the beginning of Q3. On the next slide, let's talk about Perua Cluster. Here, we see production that remained stable at around 460,000 cubic meters daily and the lifting cost close to $5 per barrel. The unit underwent the necessary integrity repairs and now produces aligned with gas sale contracts. On the next slide, Here we see the general evolution of our production, as mentioned by Matheus, which reached 44.4 thousand barrels of oil equivalent produced daily. This was impacted by the stoppage of wells at Papa Terra, which are undergoing workovers. This should be regularized in the next quarter. As for oil production, our stake with 34,200 barrels of oil equivalent daily, 70% of that coming from Puteguaya cluster. As shown in the fields that were closed earlier on, the growth of the fields improvements in integrity and management coupled with the quality of our assets will allow us to continue our growth trajectory of our production, getting the most out of our assets. I now turn the floor to Pizarro to detail reserve certification and the financial highlights. Thank you, Denise. Good afternoon. In the next session, we will present an update of reserve certification of the company. I'd like to remind you that The independent expert we use is DeGaulle and McNaughton, and we do this update once a year. Comparing the 2024 results with the previous certification, we had an increment of 29 million barrels of 2p reserves. Partially offset by 15 million consumption of reserves in 2023. We continue with excellent metrics of present value more than six billion dollars. I'd like to remind you that Certification does not consider the value of mid and downstream assets and that the NPV calculation of the company includes income tax and social contribution, which is not always included in the stratification of other companies. Our capex per barrel into P reserves remains very efficient, below $6 per barrel. We maintained a high proportion of oil, 89% of total reserves, and more than 71% of the two P reserves are classified as proved. At the peak production, we have about 14 years of lifespan for the reserves. In other words, well above the average of our comparable peers in Latin America.

On the next slide, we bring the breakdown per basin, and the main highlight being Papaterra, which reached approximately 120 million barrels, referring to our working interest, and the big relevance of the Potiguar Basin, with more than 300 million barrels of Tupi oil. That's the proven and producing reserve, produces continuous high, with 144 billion barrels. In the next session, we present the financial highlights of the company in the period. With the resumption of the mid and downstream assets, an important part of the oil production in the Potiguar Basin was refined with revenues of around 1.4 billion BRLs, very close to the managerial revenue of the upstream. Conceding managerial revenues Among segments or excluding those revenues, our net consolidated revenues added up to 2 billion BRLs in the first quarter. On the following slide, we see the breakdown of upstream revenues per basin and per type of product. Approximately 86% of revenues are from oil, although production represents 77% and 57% come from the Potiguar Basin, once again emphasizing the relevance of this onshore asset that's so important for the company.

On the next slide, we see the company's adjusted EBITDA.

We've reached $144 million in the first quarter with a combined EBITDA margin of the different segments of about 36%. Separating them, the upstream margin was close to 54% and mid and downstream approximately 4.3%, excluding corporate expenses. On the next slide, we see the company's lifting cost. On the average of the first quarter, we had a slight increase to $18.6 per barrel, mostly due to the workovers in wells and the momentary removal of the production in Papaterra, as Matilde and Denise already mentioned. And for the onshore assets, the lifting cost per barrel, including logistics, remains very efficient at $16.6 per barrel. In the following slide, we see the breakdown of CAPEX with the investment of approximately $92 million in this period, most of which was allocated in interventions and workovers and in topside systems and what we call facilities. The next slide shows our company's capital structure at the end of the first quarter. Operating cash generation was impacted by a higher working capital level including a cash call that was not paid to the partner in Papaterra that adds up to 160 million BRLs as well as the decommissioning of two wells in Papaterra where we did not yet receive the reimbursement agreed in the contract with Petrobras. It's in the normal steps of the process but at least we have around 82 million BRLs to be received from these two wells. We also had a buildup of byproducts, crude oil, and the best, higher inventory for operations and CapEx activities that somehow also impact cash position. However, even with all these impacts, a cash position of $253 billion is quite healthy and compatible with our plan for business execution over the following quarters. It should be noted that the company did not anticipate or advance receivables in the quarter, and we will make an effort to optimize working capital throughout the year, especially by reducing the stock volume of oil and refined byproducts, as well as a more intensive management of the products or the inventory items for OPEX and CAPEX activities. As for net debt, including the portfolio. We have about $186 billion, a profile of amortization of growth that has already been amortized by the extensive liability management work that we've been doing over the last few months. The main highlight, we had the issue of a seven-year bond. We reopened the market for new issuers from Latin America. This market had been closed since the beginning of 2022. and this bond will be paid bullet in 2031 and it may be anticipated after three years of issuance. We also had two local issues that were important, an incentivized debenture that we had a swap to something below 8% in dollars and another institutional debenture of similar volumes to the issuance of the incentivized debenture. So with all of this work, we have a very compatible amortization profile in terms of our business plan. On the following slide, we present our hedge position for oil. In total, we have approximately 7.7 million hedged barrels, 1.4 million of which are in NDF contracts and the remainder in the zero-cost coal contracts. Finally, the last slide shows our priorities for 2024. The first one is the full engagement in the due diligence stage and the evaluation of the transaction, the synergies and all of the benefits of this potential business combination with Enalta. A second priority is the compulsory assignment of 37.5% stake of the Papaterra cluster as we have recently informed the market. Still in Papaterra, but in the operating aspect, we'll begin the campaign to conclude this first major integrity recovery plan of this asset with a lot of dedication to replace those four wells that are undergoing workovers into production in the coming weeks. And in organic growth, we have a series of initiatives planned for 2024, including the beginning of the drilling campaign in the Serra Fuels. That's part of the Macau cluster where we have the best productivity per well onshore. It's a big highlight, even if you look at the entire Latin America in terms of well productivity. We're also going to begin the drilling campaign in Bahia in May. And there's a lot of focus in the delivery and commissioning of the steam generation systems and the expansion of the processing capacity and water injection at the Potiguar fields. There's still a lot of work to do. There's a lot of low hanging fruits for especially in Potiguar and Papaterra that are starting to crystallize over the coming quarters. This concludes our earnings presentation of the first quarter of 2024. We thank you all for your presence and we will begin the questions and answers session. We'll now begin the Q&A session. If you wish to ask a question, please click on the Q&A icon at the bottom of your screen and type your question. If you want to ask your question live, you can click on the same icon and write down your name and company name or Raise Hand. First question, Vicente Falanga, Bradesco BBI. Please, you may go ahead. Thank you. Good afternoon. Thank you all. My first question, I'd like to get into more detail about cash generation. So in this quarter, it was a little below at least what we expected. But from what we understood on your release, there have been some non-recurring events. So if you can give us more detail of what these non-recurring events are and what we can expect in terms of cash generation for coming quarters? I know there's going to be Papa Terra and maybe the second quarter won't be or won't recover so strongly, but what can we expect in terms of cash generation for the last quarter of the year? The second question is that situation with the NTE, what can you do in legal terms and what would be the next steps for you to guarantee that you have all of the off-takes in Papaterra as fast as possible to prevent a situation where this company is limping, so to speak. So just to understand whether this event has incurred any discussion of the stakeholders in the merger to do a valuation ratio or... Thank you.

Thank you, Falanga. Great questions.

About cash generation, I said briefly I talked about it briefly, but basically we had some non-recurring impacts. The biggest one being the non-payment of some cash calls from our partner in Papateja. There's about 160 million DRLs. So we had a buildup of refined products and oil. that the delta of the increase of these volumes of about of around 80 million BRLs and another 80 million BRLs of decommissioning to be reimbursed by Petrobras and as I mentioned as well it is not the company's practice to anticipate or advance receivables so since we have a very healthy cash position we prefer not to spend it or not to have an additional financial expense to anticipate receivables. So with that, we do have some fluctuation of working capital that's completely within according to our model, but of course momentarily affected by that issue with our partner in Papateja. Another aspect in terms of working capital, and we had already mentioned this in the previous quarter, Since the company has been preparing for a series of interventions in Papaterra and in the Potiguar cluster in general, we also have an impact of an increase in inventory of items that will be used in the replacement and repair of equipment and systems both in Potiguar and in the campaign in Papaterra. So this trend tends to be normalized in coming quarters. So cash generation compared to the EBITDA tends to be closer. And this question with the cash generation that comes from EBITDA tends to be bigger in the coming quarters, not as much in the second quarter, but mainly in the third and fourth quarters of the year. And finally, Reminding you that the offshore expenses tend to be very fixed as we are going through a phase of interventions and workovers in Papaterra. Most of the expenses are fixed And we have a generation of free cash flow in the Papaterra asset this quarter that is reduced. But as we resume working with the wells, simply with these wells that are being worked over and replacing pumps, we tend to get to higher than 20,000 barrels on average of production. And with that, the cash generation that remained positive in the last quarter for Papaterra will once again thrive. with the resumption of those wells. I'll let Matheus add a little about the BTI, but basically we have a very positive expectation from the contract. That's a very strong goal that we have in this partnership with BTI. Thank you, Pizarro. Hi, Falanga. So to summarize, as Pizarro has already introduced the agreement, the Joint Operation Agreement, DOA, determines JOA, determines different functions, and the partner agreed in a continued default in the conditions for future. And in this context, the company, us, S3R, started with a transfer request in the ANP, because since this period was exceeded, we went with this transfer process at ANP. And once we filed this request, all the conditions of the operation are already 100% included in the framework. So we have just concluded a new oil trading contract with Petrobras itself. And in this context, the contract itself defines that 100% or we can nominate 100% of the cargo. So we'll start naming 100% of the cargo very soon with this discussion is ongoing at ANP, but we already have, we'll start having the rights over 100% of the asset. I imagine there will be developments in this scenario. We've seen this before. There's some preceding aspects in the market. And when this happens, the other party will start with an arbitration or there will be a discussion, but it's very clear that we have a very strong right here in this discussion. And we're fully convinced that we have met as an operator all of the requirements and conditions, and certainly we shall succeed in these discussions. So from now on, we have 100% of the rights expected. The contract already sets this forth of the trading rights, the rights of naming the cargo, and we've been following this protocol with the ANP to have 100% of the transfer rights. Thank you. And about your last comment about that relationship of exchange. We prefer not to discuss it, considering that we're in a moment of a diligence process. OK, thank you. Excellent. Thank you for your answers.

Next question from Rodrigo Almeida with Santander. Mr. Almeida, go ahead. Good afternoon, Denise, Matthias, Pisa, and the whole 3R team. I have three points. I'll start asking about Potiguar, and I guess that here I'd like to get an update on the steam generation project, how it's unfolding, what we can expect in terms of the timing, particularly timing and magnitude. and going a little beyond and also for Serra and I think that we start knowing about the electricity outages so I'd like to know if you have any project regarding ensuring power supply something that could give us more comfort also for us in terms of production continuity and reducing volatility my second point is in Made Down Stream And talking about refining, I know you have a bunker contract now, but perhaps, are you thinking about forging partnerships and bringing somebody in to operate the asset with you? And lastly? This is a question I have, a doubt I have, along the lines of this question, the effect of abandonment. on cash flow. I'd like to understand this, but it was not very clear to me. If you can help me out, it would be very appreciated. Well, thank you for the questions. I'll start with the last one, which is faster. Well, basically, we have an agreement, which we call the Commissioning Cost Sharing Agreement. It sets forth the new operator, 3R. carries out the decommissioning, presents evidence that the decommissioning was completed, and Petrobras has some time to reimburse the decommissioning. This is part of our working capital expenses. But it is kind of out of business as usual. It refers to wells that were not operating since the beginning. And that's why we highlight here for working capital that is not standard. It's not part of our day-to-day operations. And for the other questions, I'll turn to Denise. And thank you, Rodrigo. All right, let's start in with the team project that's basically divided into three phases. The first. The first phase was to get some steam generators located in other areas and relocated them to a new steam station. They were built in, say, six months. So we took the generators, And we performed an overhaul, an upgrade of the generators. Well, this stage was completed. So the generators were taken to these new areas. We got the environmental license and the first generators started to operate. It is responsible for about one third, about 2000 tons of steam a day. So in the coming weeks it should be complete. The second part is steam generators that we bought from a company called Kedwi. These generators being manufactured and they will be delivered in the next quarter. In the third part, we purchased two generators. They're ready. It's just a matter of bringing them over. They're in the United States. We have to bring them in and assemble them. So we expect by year-end to have all three phases complete, thus completely replacing the previous contract. And we would have 7,000-7,500 tons of steam daily, re-establishing the steam injection conditions. in the fields of Streito and Alto de Rodrigues regarding Serra. The rig has been all transported, mobilized, and it's 60% assembled. In the next two weeks, we should begin drilling the wells at Serra. These wells are a little deeper. They should take about 60 to 70 days to be drilled. And as regards electricity, what we have today, today we are doing other power connections in the fields where we have more deficiency and where we are more impacted by the public grid and we are having interconnections with other areas with more power. This should be completed also in the next quarter. So that we can have more reliability in the electricity system in the state of Rio Grande do Norte. You know, I'd like to add something. The first interconnection of those that Denise mentioned is Ready Complete. It was in the Macau field. One of the main ones, we had a lot of problems and issues, but this interconnection was finished in mid-March, so it improved a lot. And Rodrigo, to be very objective regarding mid and downstream, We have a more consolidated partnership from the commercial standpoint. We continue our conversations to have a partnership in some format, equity or in a condominium or some kind of format that will bring more expertise to 3R, that will bring more capillarity for the business so that we can focus a lot more on upstream. Of course, as we always say, Mid downstream assets do bring a very important element of trading flexibility, operating flexibility and the whole integration. But the goal is that we continue to design possibilities with some partners studying the possibility of having a partnership via equity or another format as soon as possible. Unfortunately, I guess because of our time limitation of us here at the management, we were not able to advance as fast as we would have liked. But I believe that in very little time we should have something more consolidated. And again, thank you for the questions. Okay, perfect. Thank you very much. And there's a question that came in the chat about typical production of Seha of the New Worlds, a question by Svein. Thank you Svein for the question. Well, we have an assumption of approximately 250 barrels per well. Now that can vary, can get more than 300 or slightly under 200, but that's a productivity per well that is perhaps the very best in Brazil. Perhaps in Latin America, some Venezuelan fields can produce more, but on average, it's a very good yield per well. Thank you very much for the question. Next question from Bruno Montanari with Morgan Stanley. Mr. Montanari, go ahead. Thank you for taking my questions. I have a follow up question and two more questions. The follow up is about downstream. I understand that you continue to look for partners, but I'd like you to give us more color regarding the level of interest of partners. Has the level of interest increased, reduced in the last six months, considering that now we have more data and you have more experience with the operation? Does this attract more people to the table to discuss with 3R? And my first question is about the lifting cost. I would like to understand and just thinking about onshore assets, because Papatayaha is kind of more volatile. What is the most likely trajectory for us to see this level of $16, $17 per barrel of lifting costs that you currently have? And thinking about the next two, three quarters and perhaps the next two to three years, what is the potential lifting cost in the short to mid-term? The second question is about cash generation. In the prior call, Pizarro, explained the EBITDA, the CAPEX, and so on and so forth. And I'd like to understand if those numbers remain valid or whether working capital pressure that we saw in Q1 should push those numbers down. Thank you. Hi, Bruno, to answer the first question. Considering that now we have more knowledge, In greater commercial relations with many distributors and trading companies, the interest has increased quite a lot. And this is one of the elements together with the fact that we were not 100 percent dedicated to this, given that we have a lot of tasks to perform in our hands and the potential deal and together with the operation. So we cannot focus on that totally. But we had increased interest not only from local distributors with whom We have trading agreements, but from other trading companies and relevant operators, particularly of bunker fuel, because 55 to 60 percent of what we produce in Midtown Stream is VLSFO VLSFO Bunker which has increased a lot so we have we've been approached by many possible partners of course there are some conversations that are more advanced those that started talking to us sooner but we've been talking with many many companies there's a lot more interest which once again puts us in a very interesting position playing kind of a leading role coupled with that one more fact the fact that we got the license of our area for bunker operation in other words the market of distributors and trading companies are trying to develop which is the domestic trading of bunker to capture that logistics difference and have a higher spread We drew even more attention now with this operation of structuring a bunker operation in the region. Thank you. I'll turn the floor to Pisao. Bruno, thank you for the questions regarding the lifting cost. Onshore first. We are at a very efficient level When we see other Colombian players or the Brazilian players that do not have all the network of pipelines that we have, do not have thinking capability and terminals. So when we compare, we are quite well positioned in terms of onshore efficiency. It is important to note, as Denise mentioned, that all assets we've been operating for more than a year and a half to two years are assets where we were able to increase production by 50, 60, 70% in some cases. Not talking about onshore assets. This should be the natural history of Boutique fields, particular cluster fields, because since we had a reorganization of our management, we have been very cautious regarding our facilities. We don't expect to have a quick production leap soon after we take over an asset, because then we will run on restrictions regarding water separation or water reinjection or any facility limitation. So we have been focusing a lot on increasing our processing capacity, tanking capacity, so that we can release the flow of all of the wells available and increase the draining of the reservoir with new wells drilled. For particular clusters, we're doing this, we've been cautious. Also the impact that we don't have full steam injection. We are able to offset that and that is quite satisfactory for us. We are quite pleased because we are not having additional production losses in the heavier oil fields in Potiguar. All of that tends to be replenished in the coming quarters as production increases and this should become more visible starting in Q3 and mainly in Q4. We can then reduce by 10% the current lifting costs for onshore. Perhaps not in Q4, but perhaps in Q1 of 2025. I'm talking about offshore, as you mentioned. I have a relevant asset, Papa Terra, where most of the costs are fixed. But I'd like to remind you, since we are in an integrity recovery process where all major suppliers are going on board to repair the existing systems. A part of that becomes CAPEX. The other part is OPEX. We cannot simply get the current CAPEX of Papa Terra, annualize it, and understand that this is going to happen in the future. The truth is we have not only the effect of production increment diluting fixed costs, but we will also remove these additional costs related to maintenance campaigns that should have been performed in 2018, 2019, something that the former operator didn't do. So all of that tends to put the Papa Terra lifting cost at a very high level of efficiency. I'd like to remind you, it's our own asset we don't have any lease back it's our operation our asset with this we can have a lifting cost which is rather efficient and in case we need or want or prefer for any reason For strategic reasons to manage our cash, we can also have a sales lease back of the Papaterra FBSO, something which has been provoked by some players interested in fostering that. Then it's additional liquidity, which is not typically characterized as debt. It is not considered as debt in the covenants, so we have even more flexibility. I'm saying this for those of you who are more concerned about cash generation and cash position. We have a lot of peace of mind regarding that. We have no concerns regarding implementing our business plan. And talking about our cash generation and capex, the order of magnitude doesn't vary a lot compared to what we said in the prior quarter. The company's big intent that relies on third parties is drilling the first well at Papa Terra. We still hope that this will take place this year. It's rather possible. We continue to be very diligent in talking with IBAMA. I'd like to remind you that this is one of the simplest licenses to be given. All the risers of the SEPC line are existing. There is no additional environmental impact, so it's an easy license to get. Among our priorities with IBAMA, this is our top one priority. Fortunately, we already got the license. Today, actually, we got the final license. for the work over with UMS, our flow tile. So there might be a mismatch quarter after quarter, but in the average for the year, our assumptions remain very similar to what we mentioned in the prior quarter. Thank you very much, Bruno.

Next question, Luis Carvalho, UBS. Please, Luis, you may go ahead. Hello, Matheus, Bizarro, Denise. Thank you for your presentation and for taking my questions. Bizarro, if I may, take the last thing you said now about the cash position. When we look at the cash flow, you generated something close to 100 million with an EBITDA of 700, but there's still the net debt went up 1 billion. So you have a leverage slightly higher than what you indicated or you pointed as the ideal with a more stabilized recurring aspect. And then there was a payment of dividends referring to 2023, right? So all of that with oil in the quarter at $85. So I'd like to understand a little bit how you see the trajectory of this leverage and maybe putting a scenario of, let's say, the deal with Enalta doesn't go ahead. So how? Of course, I'm talking about worst case scenario, the deal doesn't go forward, the default from Papa Terra and they continue not paying. What would be the company's options to try and work around it so that you avoid restrictions? The second question may be to Matheus. It's about the deal, and I understand you have some restrictions about making comments at this time, but a concern that we have from our concern, investors, is about the lockup that there would be for the management and for the reference shareholders as well. I don't know if there's any discussion in the sense that you could tell us about, because somehow This causes some uncertainty about the timing of this process. Thank you. Thank you, Louise. Great question. As I mentioned, we are very confident with the leverage and cash position. We have a very conservative working capital management. We can use some strategies, some tokens that could improve working capital during the next quarter or during the year of 2024. Just to give you some examples. As I said, we don't use the strategy to advance receivables. We haven't used them yet, but we may start to use it. This is typically used by pretty much all independent companies. And with that, we could, for example, advance 300 to 400 million BRLs this quarter if we had anticipated or advanced the receivables. We also have, as I said, the possibility of the sales back of the Papaterra FPSO that could be a couple hundred million dollars or more, depending on how much we accept to pay in terms of daily rate. So, of course, we always want to have a very conservative view. And that's why I wouldn't go overboard here, giving you an amount that strategically could be anticipated in terms of receivables in the sale lease back. So it's a possibility of bringing $200, $250 million in this sales lease back format if it were in the company's interest. If we look down in the detail of our balance sheet, we also have a position at a cost above 500 million BRLs of refined products and crude oil. So the production cost of those products is at around 500 million BRLs. And that's at the sale price is a lot higher. So we're looking at this very carefully, looking at ways of keeping this volume in stock smaller and smaller. But we're not always going to look at this at the turn of the quarter. So overall, it can always happen at the turn of the quarter that the Papaterra tank is full and the tanks in Potiguar are also full because the cargo, as was the case this quarter, for example, the Bunkers cargo was concluded at the beginning of April. So if it had been concluded in the last day of March, it would not be here in this accounting detail. So all of that is part of the natural management of the company's receivables. Again, we're very conservative. We're not worried at this time about leverage. There is a certain mismatch, as you mentioned, between EBITDA and operating cash generation, which did not happen in the previous quarter. And what should not be seen again in this scale in coming quarters, unless, as I said, we have the offloading exactly in the beginning of the following quarter. So all of that is a natural part of a company with a very high in stock volume. That's a benefit for 3R, both on onshore and offshore. We're one of the companies that has the biggest storage capacity At some point, the effect of working capital could be negative, but we're also a company that have an integrated midstream and downstream in our onshore assets. So the mid and downstream working capital is a little different than the upstream working capital. So whenever we have a maintenance stoppage and go back, there's also a variation between quarters. So that's all part of our business. And we are looking at this very carefully. Leverage above 2.5 is not something that we like. It's not something that we want to have in the medium to the longer run, but we understand that we're in a very comfortable situation at this time, irrespective of the brand position of coming months. Thank you. Hi, Louise. Good afternoon. Thank you for your question. So of course, reminding you of what Bizarro said. We can't really give you a lot of details yet, but of course, this concern is a concern that the management also has. We have been talking about this with the proposal and trying to structure something with our board, with our shareholders. I emphasize that it is a concern of both managements, of both companies, as it is a concern of the boards. So what I can tell you, what we've been talking, we're trying to structure something to address this concern. We don't have anything material yet, nothing 100% closed, but I understand it's a concern for the market. It's a concern for us. And we understand that on the management side, this will definitely exist and we're pursuing a format. And we've been suggesting and discussing so that this is for the main shareholders as well and the combined company. Thank you, Luis. Great, thank you. Next question, Bruno Amorim, Goldman Sachs. Please go ahead. Thank you, everyone. Good afternoon, Mateus Bizarro, Denise. I have two questions, actually. The first is just a follow up about the production perspective throughout the year. It would be good if you could tell us. You already said that on the very short term, The production is a little bit to the side. It starts to grow more in the second half of the year. Can you give us an idea of where the production can get at the end of the year with and without the new licenses from the from Obama? That would be very helpful. And the second point about your gas monetization. You understand that you're running at an adequate price level, or is there an agenda from the company to try and improve this gas monetization? I'd like to hear about that from you as well. Thank you.

Good afternoon, Bruno. Thank you for your question.

I'll begin. And if Denise wants to add. Basically, our annual plan. And once again, a lot of what we see now a lot due to these replacement of those pumps the ESP pumps we understand there could be an annual impact but as I mentioned during the presentation this was actually just a mismatch of terms of deadlines that we thought it was going to happen in the second half it happened now but replacing the pumps and as Denise also said there will be new pumps the likelihood of the annual production in Papaterra, that would be the biggest risk point here. The probability of it being the same is very high with the exception of the license. And then the difference in Papaterra, the potential could vary. If we are not able to drill, it could be 22. If we can't do it with the potential of the workovers being done. And if we do drill, it would be 22 plus five or six It would be that, but only at the end of the year. So we would not really impact the average production throughout the year. On the other hand, as Pissarro also said, we've been very diligent with Iberma. This is a lot simpler of a drill. It's a twin well with a line already entirely there and the highs are already there. And with this license, with the agreement we got today, we are very enthusiastic that it is feasible for us to achieve this, to obtain these licenses. But the impact on the years on the annual average, if it happens, won't be as relevant because the first oil of this new well would be in the middle of the year and a lot of it would be already with the work over. So it would be on an average of 22,000 barrels without this drilling. With the drilling, we would get between 58 to 60,000 barrels at the end of the year. The average would be 51 to 52,000 barrels. And we are maintaining this plan. The onshore is in line. The levels are low. The workovers and the drilling schedule are completely compliant to the plan. Onshore licenses are a little bit simpler. And if there are any delays, we are able to optimize more workovers to opt at a potential delay on drilling. So we continue very confidently that it should not vary too much between 51 to 52,000 barrels. With this exception in Papaterra, if we don't get it, and then looking 100% of the basin in Papaterra, there'd be a difference of 22 plus 5,000. So that'd be the threshold of how we would end the year with or without the drilling. Just a brief comment, noting that Papaterra, we have 53% of working interest today. So 5,000 barrels, divided by two more or less. It's the impact at the end of the quarter, not on the average or the annual average. Yes, I forgot to mention that. So Bruno, continuing in the monetization journey for gas, we understand even based on the last quarter and you could see that's about 13% compared to the benchmark price, which is a very compliant market price. And of course, what we've been pursuing is to have a structure that generates an upside. So with the proportion of all the gas that we generate and monetize, part of the contracts are strong to bring us this confidence, security, and we have the spot market as well to capture an upside or some demand peak in the market and some put contracts as well. Anyway, we believe that this price of 13% is quite adequate to the market. We see it here actually with quite some joy. It's a very good price, but where we're going to maybe see some fluctuation that's not in the total, but on the average, would be on that share 25% of the gas that we can have a little bit more flexible contracts. where we can maybe capture an upside in the unit price. But 13% is very compliant. If we remain between 12% and 13% throughout the year, we're within our plan. Thank you. Great. Thank you, Matheus. Just a quick follow-up. If I understood correctly, With or without the licenses from here to the end of the year, you can have an impact in Papaterra, but on the onshore, you believe it wouldn't be a relevant impact, whether you have the license or not. Does that make sense? For onshore, we're getting the licenses we need. Maybe there's a one month delay, two months delay, but we can offset that with work over another well. So onshore, we don't see this effective impact in production due to delayed licenses.

Great, thank you. Next question from Pedro Soares with BTG Pactual. Mr. Soares, go ahead. Hello, good afternoon, everyone. My question is quite objective regarding Papa Terra. with the storage of the assigning process regarding the NT stake. Can we imagine, can we say that you are more confident regarding the project to keep it in the portfolio for longer? And my provocation is that in the past you have admitted, not before all these maintenance stoppages at Papaterra, well contracted, but that the asset could go through those reassessments of portfolio and perhaps considering divestment. So my question is, is the signing process suggesting that you are more optimistic about the asset? Pedro, thank you for the question. Yes, we are very optimistic about Papaterra asset, a good example as the result of the reserves stratification. That was the asset that increased reserves the most compared to other basins. That is an asset that indeed requires a strong revitalization campaign because it was very much neglected for many years. That is an operation with very, very low OPEX and zero CAPEX by the former operator in recent years. So our year one was quite painful with a lot of events, a lot of maintenance, general problems in the primary and secondary systems for practically all of the main activities of the asset. However, it is an asset where we envision excellent results after this campaign. So, yes, we're very much interested in the asset in general terms and this assignment process is part of the one of the main conditions of a JOA and we will follow This process binds the book in an attempt to accelerate this transfer as quickly as possible. Meanwhile, we are already selling the offload, the oil, in an integrated way, 100% of the production, and then offsets the past cash calls. So the hole is not increasing, it might even reduce as we increase oil production. But as Matheus has mentioned, They are already in a continued default stage. With this continued default, even if they start paying again, even if they are back on track, we can continue with the compulsory assignment process as we have done. And let me add something. Last year, at this very same time, we had two concerns. One was the topside that we were looking at. We knew what was going to happen and we were working on that. And the other part was the reservoir. We had very little data from Petrobras and data recording what was underwater. And what we proved over this year with the reservoir studies and our modeling is that there is a lot of oil there. When we stop the wells, the pressure of the wells return to the original pressure. So they clearly follow the models we had and that high volume that we expect to have. So the reservoir part, that's out of the equation. We had some questions, not anymore. So we have a very good outlook for Papa Terra in the future. And one quick comment. As Pizarro mentioned and Denis just stressed, we are very confident. We were always confident. We always liked that asset. The only difference is that now we have a lot more information, which makes the projected deviations a lot smaller. But the assignment is not the result of this trust. We are just pursuing a right of not having 62% of the revenue and 100% of the cost. So that's our fight. We executives have to protect the company and we will do so while we are here. So this was the summation of two events. We are more confident and yes, we're going to fight for our right to protect our company. Thank you for the question. Thank you. Next question from Leonardo Marcondes with Bank of America. Mr. Marcondes, go ahead. Hi! Good afternoon, everyone! Godoy, Mathis, Denise, Bizarro, thank you for taking my questions. I have two questions and one follow-up question. Still talking about cash generation. In the second quarter, it seems that you have a high payment to be made to Petrobras regarding the acquisitions. I think that you have spoken at length about the topic. Bizarro mentioned that there are some options But I'd like to understand, is there anything in the pipeline to make these payments or whether in your opinion, your day to day operations will be able to cover that payment in your view? That's my first question. My second question has to do with Guamare partnerships. Up until recently, we had discussed the potential partnership with Petro Reconcavo. For Guamare, and I would like to know for the NGPUs of Guamare. And I think Matheus mentioned the production of 1,553,000 barrels. That would be by year-end? No, that would be the average for the year, Leonardo. Yearly average, okay? So let me start with your first question about cash generation and payments to Petrobras. If we stress, if we remember what we said in the prior earnings call, we had two local debentures. One to refinance an existing debenture and the second one exactly to service our obligations with Petrobras in the beginning of the year. So we understand that we already have that amount in cash. So it's not going to be supported by operating cash generation. It could be partially, but the fact is that we have already issued a debt at the venture exactly to be able to make that obligation. We might get other smaller debt facilities for working capital, but in terms of the gross obligations of the company, If we pay Petrobras and if we bring in a working capital facility, that in practice will not impact the indebtedness of the company. And I think I did not mention previously, and I'd like to remind you, our debts are mostly dollarized. What happened in the end of the quarter? Exactly the dollar rate left its average level and was appreciated a lot. With that, dollar-packed debts converted to Brazilian BRL increased, of course. That should be offset by the company revenue, which is also 100% dollarized. So perhaps a working capital facility can be issued in the coming months. We partially had a small issuance of about 100 million BRLs. But all of that is part of our day-to-day operation and we have no concerns related to that. To your second question, who was what? Oh, the partnerships in Portigua Complex regarding NGPU. I think that this is something we should address in the future months. regardless of any merger or any possible greater M&A that might go through with 3R in any third party. But we understand that, yes, there is a complete synergy in an operation for gas treatment together with Petro Reconcavo. So that's something that apparently both sides are open to discuss. And we will definitely find a solution that will meet the expectations of both parties in a satisfactory way.

Perfect. Thank you very much. Well, thank you for the questions.

Next question from Regis Cardoso with XP. Mr. Cardoso, go ahead. Hello, Matheus Pizarro, Denise, and everyone. Thank you for taking my questions. Some topics have already been addressed, but Speaking about the need to invest in facilities and even in midstream earlier in the call you mentioned that you adopted a philosophy of first making these investments in facilities in midstream and then after that putting more effort into wells connections and so on and so forth so I'd like to understand this breakdown of investments looking forward has the bulk of the investment in facilities in midstream been made or is there still a lot to do can you give us any number can you share the number with us in your earnings release you talk about the actual i don't know if there is anything in the release about what is still to be made And a very close topic to this one is related to operating priorities. Clearly, Papa Terra, Serra, and I don't know if you have any other priorities that you would like to list in a horizon of the next 12 months. And if I may, I'd like to ask a follow-up question regarding a topic that has been addressed of perhaps a partner in downstream. I'd like to know what kind of skills and qualities would this partner have? What do you think a possible partner should have to offer in downstream particular? Rajesh, thank you for the questions. Indeed, what you mentioned about the investment in facilities and what Bizarro mentioned, there was a change in the strategy. And a change we made the hard way, considering the Macau story since the beginning. So the company of the strategy indeed was changed. Both onshore and offshore, we need to prepare the foundation for production increase. Of course, we have a lot of assets and have a lot of wells closed, and we can potentially increase production very fast. This is what happened to Macau. You can just reopen many wells, production will increase a lot, but guess what? You don't have the top the TAO-C Foundation to support the production increase, in addition to looking at other equipment and systems that needed adequate maintenance, and they were not at par considering the maintenance when we took over the assets post-closing. So the strategy changed. We make a robust investment, given what I've just said, in the first years of the asset, so that we can provide maintenance, the maintenance that was not done before. and sometimes even maintenance so that some things can go back to being operational, such as tanking capability at Papa Terra. So things that were not adapted, we need to fix according to the requirements of the competent authorities, just like we have to expand and prepare equipment for production increase. We've been doing this strongly. We have a number of projects at the company. Last year we focused a lot on that, but this year we are focusing a lot on this and will do so for at least a year and a half. But this investment tends to fall. That proportion of capex apart goes to drilling and workovers, and the other agenda is maintenance and expansion of the systems. So we have a division of about 35% on one side, and the remaining go to drilling and workovers. These 35% tend to reduce. In 2025, that will drop to around 20%, so a marked decrease, and we believe that the balance in 2026 onward. will be between 13 to 16%, ideally 15%. So that's kind of the balance that we're expecting. But of course, both 2023, the capex was high. This year it accounts for a high portion, about 35%. But that investment is necessary right now. So we won't have problems with the drilling and drilling operations and the work over activities. One question was what really? Oh, priorities. Operational priorities. Starting with Rio Grande do Norte. We have the steam injection project. That's a very important project. We have the water injection project in Canto do Amaro. That's another area where we are working a lot. In Bahia, we have projects regarding integrity at Reconcurvo. In other words, what is Macau and Rio Ventura, the older assets. That's a phase that is kind of behind us. Now, Edpapa Terra, UMS, that's a work that we're going to dedicate a lot of effort to do it in the best way possible. And also, there is some work to be done in terms of management. We have to improve some contracts. We currently have some contracts we inherited from the former operator. So we are reviewing some contracts to reduce costs. So we are changing some structures. There was a recent example of merging operating units in Bahia and merging them into one single unit. When we started the operation, the inventories were separate because every company had one. And so we are doing work to optimize inventories. Considering the several clusters and the several areas, that's a strong work front. Also regarding safety. Safety is always a priority for us. Aspects related to safety and the environment. So we are doing work in terms of training and having the procedures in place for the team because we have a lot of new hires at the company, so we have to do constant work. So overall, we will increase our efficiency over time, our operating efficiency working on these mainstream contracts regarding integrity, management and improvement of our operations. And thank you, Regis.

I think that was another question.

Oh, thank you. There's just one more. Well, I'm going to get started. Mateus will add anything. We kind of mentioned this in the past. The focus of the company is upstream. That's where we have the biggest margins. That's where we can have the highest EBITDA per barrel. Mid downstream, add to things. It brings flexibility. It brings us independence. We don't have to rely on third parties for most of the oil and gas offtakes by the company. So the kind of complementarity is ideal now for the subsequent stage. That is having best the better margins to sell bunker QAV, diesel, etc. Of course, we do that. We optimize that. And as Matheus mentioned, we had an excellent initiative from our mid downstream department of transforming our private use terminal at Guamaré into a terminal that can fill directly bunker. So large vessels, They need to have a small ship-to-ship transfer of bunker from our buoys to a large vessel. All this can be done. We've got all of the authorizations to implement that. And this is what we call a hub. People ask us, what is a bunker hub? Well, it's nothing but quote unquote, like a a gas station to supply large tankers, something that we can do through the mid downstream of Guamare. That is just one of the initiatives. There are many other ways of better optimizing and increasing capillarity in Rio Grande do Norte, Ceará, Paraíba states. Having a shortcut of bringing a trading company or a distributor as a partner that can foster the arrival of refined products cheaper because they have their own logistics or because they're interested in distributing widely in the northeast one way or another this can foster and potentialize the use of our terminal As a reminder, we have an idle capacity. Of course, a part of that idle capacity comes from the repairs that we are performing in the whole mid downstream to increase tanking capability. We've achieved a maximum capacity of the refinery. We might refine third party oil, not necessarily what is being manufactured in the region or what is being produced in the region. We can bring oil from elsewhere. so that we can use the refinery at full capacity. These are just some examples. On one hand, distributors or trading companies can help us have a shortcut to optimize the margins of mid downstream. Perfect, bizarro, Zoe. Understand it's more related to sourcing and trading rationale than in the operational side of the refinery. Well, let me just add something. Pizarro was so complete in his answer, but I just want to add something. There are some additional upsides. Of course, we can have potential tax gains and not having double taxation as we have today, or use the credits of other companies that accumulate credit. So those could be upsides. Not to mention the commercial strategy mentioned by Pizarro. Of course, after a while, after a while operating, If we understand that operating the industrial assets is not rocket science, that we are operating and well and reducing the unit cost of production of these assets quarter after quarter. And of course, Bizarro was brilliant. He explained this really well, the commercial strategy capillarity. But there are also some upsides not having double taxation. For example, today we have double taxation with the companies that do operations for us and they can potentially use some credits that other companies might have related to the nature of our activity. All right, thank you very much. Oh, and for the standpoint of operations, We are quite okay. It's very hard for anybody to be more efficient than 3R. We've got the whole teams mobilized in the upstream collecting stations. So we have a lot of teams. The team mobilized in upstream and the team mobilized in mid downstream. All right, thank you.

Okay, so I think I'll just say a few words, first of all. Thank you to all of our team and the company. We've been working very hard over the last five years. This is an operation that was growing year by year with subsequent acquisitions and the movement in the capital's market. That's also very important with IPOs, follow-ons, capital injections, the ventures of all types, the bond that we issued recently and the company. Reopening the market to the American market to foreign bonds. So there's a real workload to all of our teams and all everyone here with a team spirit that grows with a culture that has become stronger and stronger here at 3R. and also of course supported by all of the governance aspects that's very well structured and the company implemented in recent years so basically i'm here to thank not only you as investors and interested parties as sell side analysts of our company but also the complete company's employees who are watching us in this live stream Mateus, Denise i'd just like to reinforce this Thank you first to those of you who always seek and help us think outside the box and look at things from a different angle when we can't see something. The counterpoints are very important. I would also like to thank 3R's team as well. We're very proud of being part of it. I thank you both for your patience with me and thank you everyone. That's it. I think everything's been said. The company is following a brilliant path. Over time, we've been following a brilliant path with very good results in various aspects, and we'll continue on track. Thank you so much. Thank you. The conference call is now closed. We thank you all for your participation. Have a great day.