Brava Energia S A S/Adr

Good day, ladies and gentlemen. Welcome to Brava Energia's earnings conference call to discuss fourth quarter 2024 results. The presentation and comments on the results will be made by the company's chief executive officer, Décio Odoni, and other management officers. We would like to point out that simultaneous interpreting is available on the platform. To access it, simply click on the interpretation button at the bottom of the screen and choose your preferred language. This conference call has been recorded and will be available on the company's investor relations website at ri.bravaenergia.com, as will the presentation that we will show here. We would like to inform you that all participants will be in listen-only mode during the presentation, after which we will begin the question and answer session when further instructions to participate will be provided. Before proceeding, we take this opportunity to advise that forward-looking statements are based on the beliefs and assumptions of Bravo Energia's management and current information available to the company. Forward-looking statements may involve risks and uncertainties since they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts and journalists should take into account that events related to the macroeconomic environment, market segments and other factors could cause results to differ materially from those expressed in such forward-looking statements. We will now begin the presentation, giving the floor to Mr. Dessio Odoni. Mr. Odoni, please go ahead. Good afternoon to all. We start this presentation of our earnings With the video Conquering Atlanta, we made available now on YouTube and I invite you all to watch it. If you haven't watched it, please do. Before we begin the presentation of our results, I would like to make some comments. We haven't spoken a lot in recent months. Our team has been focusing on operating deliveries by the company and we've been delivering a lot. But I think that now it's a timely moment to share some ideas with our investors. This is the first quarter in which we report the combined company. We had reported Q324 and that quarter was a partial version because in July of 2024, both companies, Enalta and 3R, were still operating independently. Although Q4 is the first one, it brings a snapshot of the past. The results we are bringing do not reflect the current moment of the company, nor the future of the company, because it translates a moment where we had a shutdown in Papa Terra and the transition from the early production system to full development of Atlanta. And that made the offshore production of the company to be well below what was expected, impacting cash generation and EBITDA for the quarter. In Q4 2004, we progressed in integrating the teams and completed the short, mid and long term integration of the company. In this work, we identified that only 5% of production was concentrated in half of our concessions, which required allocation of human capital and resources, which was unproportional to the results we were obtaining. Thus, in order to concentrate efforts on our main assets, the ones that are more profitable, we decided to sell some smaller fields. The announcement of this portfolio optimization process happened at a moment where we were facing operating difficulties at Atlanta and Papa Terra. So we got some manifestations of interest by banks and potential buyers. Interested in more relevant assets of our portfolio, namely our onshore fields, we have an obligation of assessing business alternatives suggested to us. So, even knowing that the value of onshore assets, particularly those located in Rio Grande do Norte, are leveraged by operating and financial synergies coming from the deal between Enalta and 3R, the management of the company started a process for these possible offerings to materialize so that we could assess them pragmatically and more in depth as the market was provoking us as a result of that we received unbinding offers for the totality of onshore assets of the company and we decided given the strategic importance and the benefit brought by the synergies not to move forward Thank you for watching! and considering the merger of the companies. All of these events influenced the market perception of the company and our share performance. But the quarter was not summarized in just that. It was not just that. We had a lot of other things happening in Q4. We started capturing the merger synergies. We proceeded with the integrity campaign for Papaterra facilities and we resumed the production in the end of December as planned when production was stopped. We put into operation FBSO Atlanta, and that was the first deep water oil production project conducted from the start by a Brazilian company. And this was done on time, on budget, which is not very common for such a large, complex project. Mega projects with investments above $500 million, 98% of them Go beyond budget and extend beyond the time frame. And that was not the case of Atlanta Field. And at the very end of last year, we completed the acquisition of 23% of BC10 and Parque dos Conchos operated by Shell. It is now part of our portfolio. We took the first steps to optimize the portfolios defined in the strategic planning. We sold 11 low production concessions. We forged the partnership for gas infrastructure in Rio Grande do Norte. We advanced in the integrity campaign of the facilities for mid and downstream, and we revisited our model of selling by product and acquiring and buying oil. We signed more long term contracts with some distributors. Also important, we changed the strategy and management of our onshore business. We completed most of the investments in improving the integrity of the assets in Rio Grande do Norte, in Bahia and in Ceará. We started focusing on projects that require fewer investments, particularly for tertiary recovery. or EOR. And on onshore, we increased efficiency of capex. For example, we reduced by almost half the number of rigs that we use. We are just focusing on projects with a profitability above 15% with a robust return for that kind of asset, which are less capital intensive with a shorter maturation. We reduced costs. We continue to reduce onshore costs. In February, we achieved A record production onshore, especially in Bahia. Never did we produce so much and we increased the EBITDA per barrel produced. This is a metric that we and the management want to monitor looking forward. We want to monitor this up close. In offshore, In addition to resuming production Papa Terra and starting production at FPSO Atlanta, we approved the second phase for Atlanta and the new wells for Papa Terra. We had mentioned that we were going to do this in in Q125 and we did it in Q4. And these have a return well above 25% per annum. which is our goal for Sea Investments. We signed new contracts evaluating production of oil at Atlanta and we started fiscal optimizations and liability management efforts that we need to have in place to capture synergies and gradually reduce the cost of our debt. In February we received good news. We hit a record production almost 74,000 barrels of oil equivalent and we are preparing to produce more than 80 with the new wells opening at Papaterra and Atlanta and concluding the work we are doing at the FPSO of both fields. So we expect to have better results and also the return of production at Manatee. From August to December 2024, in the period where we operated as an integrated company, variable compensation of the officers was zero. Bonus for short-term results was zero. And the retention program with shares that have been approved by the shareholders meeting was rolled over to 2025, subject to performance. We implemented a new culture, culture that recognizes performance and that stimulates meritocracy. These assumptions were adopted. In the design of the compensation package of the officers that we approved recently at the board. So for 2025, the management compensation will be detailed in the next shareholders meeting and it is in line with our culture. We have monthly salaries below market average and a compensation which is highly result dependent and dependent on unlocking share value. In my case, it gets to almost 90% of my compensation. Of the total compensation, 40% corresponds to a short-term bonus, which could be zero, as was the case in 2024, and 30% of the share program for 2025 with an exercise price above the current values. The remaining 10% refer to the share program of 2024 with also a tech price superior to the current share price. The company has a clear strategy. We are pursuing the strategy. We believe in the merit of a diversified portfolio, one balanced portfolio. We believe in scale. A company has to produce more than 80,000 barrels of oil equivalent daily. We believe that an oil company should operate with lower leverage, ideally 1 to 1.25 times EBITDA. So past the ramp up phase of production, we will operate with low leverage, remunerating our shareholders and preserving our growth capacity. Operational results are starting to appear. Production is increasing. Atlanta will have one of the most competitive lifting costs in the industry. Our onshore and offshore costs are dropping. Synergies are being captured. And as we have crossed the most capex-intensive phase and will benefit from production increase now, we are starting now a phase of greater cash generation. Leverage, as of now, tends to drop quickly. As our creditors agreed with the change in their calculation of the indebtedness indicators, So variations will be less volatile and less dependent on the foreign exchange. And as mentioned, we're implementing a culture that values people's contribution, a culture that strengthens meritocracy and encourages the sense of ownership of our employees. Today, officers are shareholders of the company. I am a shareholder of the company. More than that. Most of my personal assets are in Brava shares. Never have I sold a share as of 2025. Part of the bonus of all of the employees might be converted into company shares with a matching for the company. The goal with this measure is that all employees will become shareholders of the company and develop the attitude and behavior of being an owner. With this, we're building a robust, efficient and pragmatic company. with employees aligned with the shareholders in the permanent pursuit for better results as we are going to start seeing now. I am convinced that the coming quarters will continue to show that. Thank you very much for the initial part, for these initial comments, and let's start with the presentation. Please go back one slide. There. In the first full quarter of the company, we can see the evolution of production 74,000 barrels of oil equivalent daily, average daily production in February 25, and a robust EBITDA and cost reductions. I think that these are the take-home messages of the company associated with a robust cash position. Papa Terra resumed production. We started Atlanta and we started with Parque Desconches. We closed the Parque Desconches deal. Next slide, please. This shows a little bit of our portfolio. What we see is a robust increase in productions, as I have mentioned, in February of 25. We have capex efficiency. Directed to higher return assets, synergies being captured, deleveraging, which is starting to accelerate now, and a set of assets and projects with low regulatory exposure. In 2024, we had greater regulatory exposure, needing authorizations to conduct our operations, but since we have obtained almost all of the necessary authorizations for our investment program in 2025, Our exposure to regulatory approvals is much limited. At the same time, we have significant improvement in the amount of licenses we obtained in Rio Grande do Norte for our operations, and this is unlocking a lot of activities onshore of the Potiguar Basin. Here, the slide shows the governance structure and our management as announced recently. We are replacing Mastrangelo by Carlos Travassos. This was a scheduled replacement with a transition period. So in the next shareholders meeting on April 24th, Mastrangelos will leave and Carlos Travassos will take over. He's highly seasoned and he will take over as offshore COO. He has been working with us since January. So he's already very much integrated with the whole team and with our partners. Next. Here we have the highlights of the operation. We can see that the combined company Enauta Plus 3ER Last year, we started with the production of about 70,000 barrels produced daily. We had a gradual reduction given the operating efficiencies offshore until Q4, but we already see production resuming particularly in January and February. And now in March, we are working on the two FPSOs at Atlanta and Papa Terra so that we can connect two more wells. Two more in Atlanta, three more in Papa Terra. So that we can have a ramp up of production in the coming weeks and months for the company. So these are the main triggers for us to improve our earnings in Q125. Now we have the part of the presentation covering offshore activities. I will ask Mastrangelo to lead this part. Thank you, Desio. I would like to take this moment, since this is my last earnings conference call, to say that this was an agreed decision. I had already intended to return to the United States. I've been living there for more than 20 years. And what I can say is that I am very proud of the team that I was working with. And I'm still working with this team. I have a lot to deliver until the end of April. But with the merger between Enault and 3R, This is not a new Enalta and a new 3R. I can say that this is a first line team. The best that we had at Enalta and the best we had at 3R. We have the very, very best. I am very, very proud of this team. You probably saw the results in very little time in the last, in the previous earnings conference call. I participated with a number of goals to be delivered by the end of 2024. And of course the team delivered them all. They delivered everything that we promised. So Carlos Travassos will take over my role on April 24th. And he's very experienced. He started to work in the industry just like I did, just like Tessie did at the wellhead, at the shop floor. He knows what happens out there. It's not just an office work. He is somebody with a vast experience. I have more than 40 years in this industry. He has many, many years in this industry as well. He is somebody that I am very proud to be handing over to. And I am sure that he will continue the good work. He has been working with me side by side since the end of January. So this is not going to be a smooth handover. It's going to be a hands-on transition. I've been visiting all offshore assets with him a few days ago. I was in Perua with him. We were in Atlanta. I will be visiting Papaterra and we are talking with all of the employees. that are at the front line because our deliveries come from our people. And mobilizing everyone is what helps us deliver the results as we expect. I'm also a shareholder of the company. I believe in the company. And that is how we will continue to work together. All right. So let us now focus on the slide. As you can see, In our last earnings conference call, Q3-24, we said that we were working on structuring offshore, the growth of the offshore operation and the offshore portfolio. It was a conscious decision to start preparing particularly Papaterra to grow. We cannot think about Papaterra of the future if we didn't focus on Papaterra now. So we decided to work to structure our facilities to foster growth. We also said that we were going to resume production at year end. We did. For Atlanta, we transitioned the early production system to full development. And I will go back to Atlanta in a minute, but the results are showing now. In January, February, and that is what we expect to see from now onward in terms of growth. and I'll speak about the other fields one by one in a minute. All right, so let's start with Atlanta. I've said a lot about Atlanta, but this is an oil field. That I am always impressed with, with its ability to deliver results. Atlanta requires a production system that relies on pumping. So what did we do? We installed a robust system sized to work throughout the lifespan of the project without those intermediate shutdowns. We have a system that does not require water injection wells because it has a fantastic aquifer that maintains pressure. So compared with the development of a field that requires injection or injectors, they account for half of the drilling so that we can produce oil. Here we don't have the investments to re-inject water. This is a field that has produced more than 30 million barrels in a system that was an early production system. Any system that was there to give us more information about the field to remove risks of the full development and the results are very pleasing. So much so that our production curves, the response of the field remain exactly as we had predicted according to our models. So Atlanta field is performing really well. Primarily the reservoir, which is what matters, but also with a full development system, we are seeing a performance of the system as a whole, which is even exceeding our estimates because we had an average for the industry with an initial percentage of preparation. and adjustments to the plant and the field is performing even better than the usual. You probably saw the production curve in January and February and now in March we will have new wells coming online in a in a matter of a couple of weeks. So we've made all of the adjustments needed. So there was probably a slight reduction in production because we took the opportunity to run all of the necessary tests. And Atlanta field is keeping up, as you mentioned, we are the first independent company developing and executing on this project because we executed the project below the budget initially approved in 2022 because we were able to capture some synergies to reduce activities, mainly during installation. With that, we expect to have a final disbursement for the project in a couple of months that will be lower than what was originally approved in the budget. And that's very rare to happen in such a big project.

We now have a partner, West Sloan. They came in with a 20% stake and they're giving us full support so that we can move on with the next stages. I think we have another one. Well, very soon I'll talk about the new wells and then now we'll return to that subject. But this slide only shows the change in scale. Well, we started with a temporary system. We were in production for six and a half years. The oil storage capacity was 480,000 barrels, and this required frequent offloadings. I mean, 30,000 barrels a day would mean every five days. So in the case of a plant, that is a unit that, as I was saying, has to be ready to produce and treat water. And they already come with 150,000 barrels of water a day with treatment capacity. Therefore, we are ready to start growing the production in this field. Our schedule. I think in our last earnings release call I said that it should be concluded by the end of this quarter and we are now concluding at the end of this quarter as promised and as we speak people are already getting ready to connect the last line of the wells and then after that's two more weeks or maybe a little bit over that we will we started commissioning for the next one so we are at the final weeks but Now going forward, maybe by the end of this semester, we have two more wells. I can say therefore that it's part of our schedule. We are on time. And moreover, we don't need any additional equipment because we already have everything. We have the license to make the connection, to open the wells. I mean, to spread the well, we have connections and lines. The only thing that it's missing, I mean, it's just a regular installation sequence. Just to conclude that final stage of the well. So today production is quite stable. It's around 26,000. So if you look at the numbers, we're just waiting for the production of the next two wells. I mean, close to what they were producing before and further on. until the end of this half year, the production that will come from the two remaining wells. But everything is according to schedule in terms of our production startup. But after I talk about Papa Terra, I will talk about the tieback wells. I mean, two new wells. There will be the seventh and eighth wells. So next slide, please. One more. OK, now let's talk about Papa Terra. Papa Terra has to do with the conversation we had last time. And we had to build the basis for our growth. And this is what we did. We started production. And today, what are we doing Papa Terra? Well, we are getting ready. for getting prepared for the intro, three new wells. There were three wells. In the pipeline, we are now upgrading the heating system. And why is that necessary? Because this is heavy oil, so you need more heating capacity to support the need coming from these three additional wells. And likewise, we will have to do the upgrade in terms of stabilizing energy supply. So in a few more weeks, we will be able to start up three new wells in addition to the production we posted in February. From then on, as I said way back then, Papa Terra, is a field with two million barrels in place, I mean, in the reservoir. To extract the oil from the wells, which we call to increase the recovery factor, you have to start working to optimize water injection and other things. And this is what we are already doing. And that's why I wanted to talk about it right now. We already started the section of of four new wells, two in Atlanta and two in Papaterra. I'm talking about both because this is an integrated campaign. It's part of the synergy. We cannot do, we couldn't do that integrated campaign if it weren't for this combination of our portfolio in terms of the projects. And with that, we can optimize the contract can be longer for the drilling of the four wells, and we could still have the option of an additional one. And with that, We already have all of the necessary material and equipment. Everything is already in place. And I think during last year's call, I said that this would be in the first half of the year, but we were able to anticipate it. We did the final investment decision, the FID that occurred in February or last month. So what do I mean by that? It means that we already have a project with enough maturity Thank you very much. and the receival of the rig that is supposed to be in September this year, meaning that in a few more months we will be receiving the contracted rig as Lone Star from Constellation. Two contracts have been already signed. The agreements were signed right after the sanction or the approval by the board. We already signed all of the contracts and this is very important. Eighty percent of the total capex have been committed just to eliminate the risks from the project, risks of any kind of pricing changes. And what hasn't been signed is because it depends on the final approval or a decel that we will spend and at the age of the project. But this does not compromise the delivery of the project. So the project should be delivered on time. Referring to the four wells, two wells in Alcalá and two wells in Papa Terra. We intend to start with Papa Terra. I mean, the time between the end of drilling and the production, the ramp up of production, you know, it's in place because we are taking advantage of existing lines. But this is an integrated campaign. It goes from one to the other. Alternatively, I mean, the vessel that will lay the pipes is the same. So this is something that allows us to have this advantage or to have the synergy Pérez Pérez Pérez Pérez Once the Atlanta wells get into production, I mean, if you remove freight, which is a standard in the industry to calculate lifting cost, so this is our lifting cost for Atlanta, we are turning this activity highly profitable. And in the non-operated fields, and maybe I can refer to DC-10, we have Mana Tea. Our expectation is to resume production this month. The operating company, I mean, we are on the back seat, but the operating company said that by the end of the month, they will start operations. We already have the license to resume Manatee's operation. I mean, Parque das Conchas, BC 10, with Shell, the closing occurred the end of last year with 23% stake. What I can say is that this has many similarities to our DNA. Considering our expertise, I mean, both fields have heavy oil. They rely on, you know, deep water pumps or pumps at subsea. And yesterday we concluded another offload with Shell. We did a co-loading. together with Parque das Conchas. And what would that be? The shuttle tank, the shuttle tank that takes the oil, they took half of the space available in the vessel, and then they go to Atlanta and took the other half. Therefore, there was a lot of added value in the portfolio, including that field that is not operated by us. I think there's another slide. Now I'll turn the floor to listen to talk about the onshore fields. Well, the fourth quarter, we already see some of the results stemming from the actions we are putting in place. We see Production and Cost Improvement, CAPEX Improvement, and also improvements in our facilities. This year in February, as mentioned before, we reach record production Record on short production in the history of Brava in June and June 23 at Heikon-Kavu, we reached the highest level of production in the field. So since 2016, almost 10 years have gone by and now we were able to reach a record production that was successful work then by our team now speaking about Reconcavo here there was a a reduction in OPEX stemming from several actions of cost optimization we made important changes to our maintenance and production agreement we also re had reductions in the work over of the wells engineering production reservoir and rigs Therefore, we are selecting the wells and tasks to be executed to reduce OPEX. DESU also said that we are come to completion in some of our integrity campaigns and the major integrity costs are coming to an end. And therefore, this is reducing our lifting cost. There are still many things to be done. In order to continue in our path to reduce costs and still talking about production in that basin. This increase in production that we mentioned stemmed from the drilling campaign of Thank you very much. by the response that we manage with the extra heavy oil field as a result of the drilling campaign and also improvements in the water injection in that basin. Next slide. We continue to work according to the plan that we showed to you last quarter, improving capital utilization. We are optimizing the management process of water. And at the same time, we are moving on with the oil recovery projects to improve oil recovery. Now, in relation to improvements in CAPEX utilization, we reduced substantially the number of rigs. We went from 24 rigs last year to 13 rigs at the moment. We also made substantial reductions in the timing of our drilling campaigns, if you compare to the previous operator in the Seattle hub. Richard Kehrer Kovacs, Luiz Felipe Carvalho, Carlos Jose do Nascimento In the previous operator they will drill in 160 days and now we are doing it on average 38 days per well and also very shallow wells but 300 for 400 meters in depth I mean we used to do in 2.4 days now we are drilling in only 1.8 days and as of August we will Introduce a case and drilling system and this will allow us to reduce that timing to 1.2 days. So all of these operating improvements are very significant to the projects. In the past, We had several inefficiencies in terms of CAPEX use and that stemmed from environmental license. And thanks to a great alignment that we had with the regulatory agencies, now we went from 7.8 licenses a month as an average last year, 7.8 licenses to 17 licenses in the first two months of the year. I mean, licenses per month. So in the year 2025 and comparing to the first two months of last year, there were only two licenses per month. And now we had Thank you for joining us. I mean, the steam equipment already arrived in Brazil, some already installed, and some others will come by the end of the year. And obviously, this will Thank you very much. Thank you very much. Enhanced oil recovery. We are launching our first project of nitrogen injection and the project would be deployed in the Fazenda Belém, which is our oil field. The pilot product consists of injection of nitrogen and sulfactants in the wells in these fields. In the world, this is a very commonly used technology. I mean, when you have heavy oil, you work in four things. Heating, which is something that has been done by the previous operator, nitrogen, surfactants, and vertical or horizontal drilling of wells. We are working to drill horizontally and vertically as well. but we are using the best polymer technology in the world. It's a proven technology. We will run a pilot project. We would do the de-risking of the technology and then we can probably go into full development. and in the oil fields that are not so heavy, so heavy fields, we signed this month an MOU with a supplier to deploy polymer injection in the Salina and Campoamato fields. So we are working to start injecting polymers at the most in the first half of next year. I mean, the purpose of this technology, I mean, just like nitrogen, after the initial de-risking, we do the full development. It's very important that these two projects, nitrogen and polymers, will probably have a minimum use of capex, which also is very good for efficiency. So in summary, Reconcavo, we are making Hessmann's in cost, et cetera, we still have You know, a possibility to increase gas. We will focus on improving production and costs. We will continue with the drilling campaign, you know, steam injection, water and EOR project. And we also want to constantly focus on improving capex, improving the integrity and improving our overall operation.

Next slide. Thank you, Larry. Well, let us now start about the commercial results in the agenda looking forward. The charts on the slide show our consistent results amidst a period of growth, price volatility and operational volatility of the company. with part of the explanations made with the offshore environment. But I would like to highlight three main points regarding oil. This quarter we completed the offtake contracts for Atlanta partnership with Shell and Trafigura. The new contracts have a new trading format for Brava. Atlanta prices associated with the end markets, Southeast Asia and for low sulfur oil. So this allows us to share the benefits associated with cargo sharing as Michelangelo mentioned. Logistics optimization and improvement in the quality of the product delivered to the end market. These can bring us sharing of gains for Braz in addition to mitigating risks and accelerated the cash cycle of the company. We see the ability of storage at the new FPSO as a positive element, adding value to similar cargoes, meeting market needs, as he illustrated our share in Parque das Conchas and products with a final spec. That we produce at Potiguar Refinery and what other refineries in Brazil export. Second point, still on oil. There is a new trading format for purchasing oil in Potiguar. This was signed in February. This is a different partnership with Petro Reconcavo and other producers at the basin. Objectively, this leads to 20 to 30% increase in the discount in the purchase of oil compared to Brent. The counterpart is a fluctuation of margins in jet fuel and diesel S 500. The partnership also involves co-investment of the producers. Insured storage, improvement of transportation modes to optimize the growth of flow expected for 2026 at the basin. This is a new contract model. It's a 24 month partnership and we are very happy with the results so far. Third point. We end, we start Q2 25, aiming at the restructuring of our trading of our shared parquet des conches. The end of our partnership with Raizen for the selling of Bunker domestically and abroad and the negotiation of a new selling cycle for Papaterra Oil, now reflecting the investments made to improve logistics of the platform, which now has its full storage capacity in a new and a new offloading system. In natural gas, the company developed an area dedicated to natural gas. We improved our trading strategy with new sales contracts to Bahia Gais and Copper Gais and others, in addition to signing a longer contract, a three-year contract with Congais. And this is the NTS system of distribution. Gas contracts signed with Petro Reconcavo with differentiated conditions at Portugal in addition to gas procurement contracts. The focus, in our opinion, will be that in the mid-term the company will benefit from its gas fields, the integrated processing infrastructure, the geographic position of the portfolio, with increased production, a number of access points, improving margin and delivery to our main customers. Here One of the main points associated with our thesis and the business combination of 3R and Enalta leading to the creation of BRAVA Energia. In these five months since the creation of the company, several teams delivered many synergies identified in the action plan. We estimate that in terms of present value, by year end 2024, we obtained more than 30% of the total estimated synergies with the business combination. We expect to fully deliver these synergies captured along 2025. There will be a growing impact on the operating and financial results of the company. It is worth highlighting here that among the main activities During that period, we had the ownership restructuring of the holding. We finalized many of the subsidiaries. This is an ongoing process to be finished by mid 2025. Secondly, a broad liability management program with the prepayment of debt, issuance of debt, and some commitments that will allow us to reduce the average cost of debt, lengthening the maturity of the debt. We also delivered a deep reorg, reducing headcount, unifying systems of the company In addition to improving some activities that are ongoing, we did a broad review of the whole structure of guarantees and insurance, and operationally we reduced the redundancies in the offshore logistics, supply of inputs and provisions, as well as, as you mentioned, the decision to invest in new offshore wells with an integrated campaign for new wells in Atlanta and Papaterra. Now I turn the floor to Pizarro for the financial highlights. Thank you, Pedro. Good afternoon, everyone. We have now the financial highlights for Q4 and the full year 2024. For a comparative basis, we'll present non-audited pro-forma results, as if another merger with the company had happened in the beginning of the year. So let's start with the net revenues of the company. We achieved about 10 billion BRL in 2024, almost 2 billion BRL in Q4. In upstream, revenues were 1.3 billion BRL and in midstream 1.5 billion BRL, 860 million BRLs being intercompany eliminations. The biggest impacts on revenues are related to Papaterra project and Atlanta project, as mentioned by Dacio and Mastrangelo. These two fields have resumed production in the beginning of 2025. On the next slide, we have net revenues for upstream. Broken down by offshore and offshore. Shown stability of revenues from onshore fields, even with a reduction of Brent price during the year. In 2024, about 90% of upstream revenues came from oil, 10% from gas. Of the total, 46% came from Potiguar cluster, 10% in Bahia, totaling 56% of onshore fields, 25% in Atlanta, 13% Papaterra, 6% in Perua and other fields. Manetti also had a maintenance shutdown performed by Petrobras during most of the year. On the next slide, we have adjusted EBITDA for the company, given the operating restrictions at Papaterra, Manetti and the replacement of The FPSO at Atlanta, we had a declining trend in EBITDA throughout 2024, which followed production reduction. However, we have resumed production levels very close to Q1 2024, where we achieved $251 million in just one quarter. I'd like to highlight onshore EBITDA, which was quite substantial. We can see here the results. And if we analyze jointly onshore EBITDA midstream allocating 50% of corporate costs, we achieved about $34 per barrel for our onshore production. In other words, among the most well-positioned in Latin America. In offshore, We could see the real potential of cash generation in the habitat of our combined offshore portfolio starting in Q125. On the next slide, we present the lifting cost of the company. with and without chartering effects. Positive highlight for the onshore lifting cost at levels below $17 per barrel as a result of production increment of onshore fields, reduction of costs mainly in Bahia. I'd like to remind you that a good part of our logistics costs and onshore offloading pipelines is included in the lifting cost, which is not the case of our peers in Latin America. For offshore, with the new wells of Atlanta coming online and resumption of production at other wells at Papa Terra, lifting cost per barrel tends to be more efficient compared to the 2024 average. On the next slide, we have our CAPEX. A S S S S S S S S S S S S S S S S S S S and in the full development of Atlanta will not be repeated, at least not in the same order of magnitude in 2025. On the right, the pie chart considering the current working interest of Atlanta. Total capex in 2024 was about $870 million. In offshore, a total volume of $540 million. 70% of this $540 million linked to the Atlanta project. The replacement of the FPSO, as well as the whole drilling campaign, and Connection of the New Wells. For onshore plus midstream, total volume of investments was $333 million, 140 million of those in facilities, including investments in steam generators and integrity recovery. On the next slide, we have the company's capital structure. We ended 2024 with approximately $1 billion in our cash position and about $1.55 billion in financial net debt. If we add all the year notes of the company, deferred payments linked to the acquisitions, total net debt is $1.9 billion. And of note is that we have $402 million in receivables from Ensign, which will be paid during the chartering contract for FPSO Atlanta. Even with an EBITDA that was substantially impacted in Q3 and mainly in Q4, the company's leverage calculated in dollars was close to 2.8 times. I'd like to remind you that this is just looking at the last 12 months. On the next slide, we have cash flow and the position of oil byproducts. Operational cash flow was impacted by a reduction of production of onshore assets in addition to delinquency of NTE, which is the partner ETA Papaterra. and the owners for 526 million BRLs. The company remains with a very healthy cash position, as I mentioned, of $1 billion. As regards to byproducts, we have 170,000 NDF derivatives and many other contracts in the color format with a floor of $58. and we resumed our hedging strategy trying to protect the breakeven of the company mainly in the coming months. We currently have 1.7 million NDF contracts at $72 which protects the company from instabilities regarding the current level and these contracts are concentrated in the next six months. And I'll turn the floor back to Dessio for his final statements. I'll try to be brief because this is getting very long. But I would like to stress that we promised to deliver some operational events in Q4 24 and we did. We did deliver. We are getting prepared to deliver a production increase at Atlanta and at Papataha in the short term. And we We'll continue our goal to capture as many synergies as we can. We will continue to optimize our portfolio to concentrate on our most productive assets. We will continue this journey Onshore and generating cash per barrel both onshore and offshore. We are in a positive trajectory with Atlanta and we will continue In this relentless effort to create a culture of meritocracy, recognition and respect for earnings, which will make us deliver better and better results for our shareholders. With this, we are going to close the formal presentation. I'd like to say thank you for your patience. This was a very long presentation, but we are here to answer your questions. Thank you. We will now begin the question and answer session. If you want to ask a question, please click on the Q&A button at the bottom of your screen and type in your question. To ask questions live, click on the same icon and enter your name and company or click on raise your hand. Please wait as we collect the questions. First question from Mr. Rodrigo Almeida with Santander. Rodrigo, your microphone is enabled. Go ahead. Good afternoon to everyone. I think let's start with three questions. I'd like to speak about liability management. If I'm not mistaken, you have an opportunity to make some extraordinary amortizations. And when we look at our interactions with the fixed income investors, they are very interested. And they have been interested in your business case. So I'd like to know how you're interacting with this market. What are your plans now for the coming months regarding Extraordinary amortizations and possible issuances that can somehow bring benefits for you in terms of the cost of debt. And on that same topic, Desio, do you have any visibility regarding any news about the instant receivables? Second question is about Papatejo. And perhaps here more specifically in direct, In terms of the possibility of gas generation and electricity, we know that there is a high energy consumption need. So any costs related to that? Do we intend to operate the FPSO? I don't know exactly the details of your contract, but could there be any OPEX and cost upside at Papaterra? Any news about the price of oil from Papa Terra? And the third topic is more detail on Onshore. We spoke a little about the steam generation project. When should we have the full effect of the steam injection project? And what are your main focus of drilling at Potiguar? What are the main fields and wells you're focusing on along 2025? And what should be the lifting cost for onshore in the coming? What's the thing that these are my questions?

Thank you, Rodrigo.

Well, yes, we have a number of initiatives related to liability management. I will turn the floor to Pizarro so he can detail those. Likewise for Papaterra. We want to improve the efficiency at Papaterra. We have a number of ideas, a number of things in our pipeline in that direction, and I'll ask Mastrangelo to complement that, and then we will answer onshore. So let's start with Pizarro on liability manager. Thank you, Rodrigo. As regards liability management, I'd like to remind you we have two big debts that can be prepaid this year. Fortunately, the most expensive two of our portfolio of debt, those $500 million Richard Kehrer Kovacs, Luiz Felipe Carvalho, Carlos Jose do Nascimento Travassos, Mauro Braz Rocha And this is exactly because of that that we are monitoring up close both the domestic market and the international market. Here we have opportunities in both. We also have a very robust cash position as I mentioned in Q4. We don't necessarily prepay and issue other instruments as big as. But our goal is to reduce the average cost of debt of the company. and partially reduce the size of the company's gross debt with cash generation and also using part of the cash that we currently have in-house. So this is the liability management scenario. And as you said it yourself, we also have quite a relevant receivable of $400 million from Inson. And we are studying alternatives regarding that. Our goal is not to have this receivable beforehand at a rate that is very far from our average cost of debt. So obviously here we are very focused on a financial structuring that will bring us a substantial part of that amount as a cash equivalent for the company. And I think that I can turn the floor to Ms. Trangelo to speak about Papa Terra. Hello, Rodrigo. Thank you for the question. You touched on the points that I had mentioned before, but there are many upsides. Usage of gas, minimizing the use of diesel, and you even mentioned operating the FBSL. Well, this negotiation is underway. It is our intention. To go for the low-hanging fruits to get immediate gains in our operating efficiency. And I'll take this moment since you kind of raised the gas topic. At Atlanta, in our license, in our operating license, we already have the possibility of using crude oil, the oil produced as fuel. This might sound too simple, but we do sell oil as fuel oil, as Pedro mentioned, so we could immediately use it on the board. So the intention at Atlanta is to prioritize gas and perhaps if needed, we can use crude oil.

So both points that you mentioned, they are being worked on.

And I attend the Florida Burial.

Well, Rodrigo, you asked about onshore.

Our production for the year is expected to increase slightly. We're not expecting substantial increase in production, and we have focused, as we said since the beginning, on optimizing our investments and our capex. That's why we are reducing the rigs from 23 rigs last year to 13 rigs this year. So our production outlook will post a slight increase, by year end, and steam injection, which is centered in our heavy oil field, about 8,000 barrels per day. Steam injection will reduce the natural decline of the fields. When we got Potiguar cluster and we had the lack of steam, we could see What is mentioned in the theory that we could experience the strong decline of the fields, 40 to 60% of annual decline with steam injection, we could increase substantially the decline rate and the lifting cost. Because gas has a cost, but it brings an increase in production. If we don't inject steel, the cooling of the field will lead to such a great loss of production that the fixed costs will have a very important weight in the lifting cost. So the lifting cost has to improve with steam injection. Thank you, Rodrigo. Oh, if I may ask a follow up question regarding trading of Papaterra oil. I think you mentioned enough loading something that was left. Could you access a new market? Anything on that? That would be much appreciated. We are working on that. Well, our first offload from Papa Terra was exceptional. He was worked independently from the Petrobras contract to run some tests in the exports market and to include oil volumes. They were part of the ballast of the platform. That was exceptional offload. And it worked as a test for several topics related to future trading production from the field. But that was an exceptional offload. We worked in partnership with other local and international players. As I mentioned in the presentation, today we have a trading contract from Papaterra to Petrobras. And we are working on a new strategy for renewal, aiming to improve the profitability of the contracts after investments that were made to improve logistics of the platform. It was very inefficient. The platform could do just small batches. Small batches. That required some dynamic positioning vessels and these are scarce resources in the market and that made the profitability of the operation that hindered the profitability of the operation. So we expect to work with a new concept starting in Q3 of 2025. Perfect. Thank you.

Our next question is from Luis Carvalho with BTG. Mr. Carvalho, your microphone is on. Hello, Décio, Mastrangelo, Boeri, Pedro Pizarro. Thank you for your time and for being so transparent. If you allow me, I have three topics. In your initial remark, you talked about The fact that this adjustment in the compensation program or alignment, certainly BRAVA is the result of two companies that probably had different cultures. Therefore, I would like you to please tell me a bit more about this compensation model. I mean, I know you said something about it, but if you could give me a little bit more details, that will be very much appreciated. And the second question is, at the moment of the deal between 3R and Enalta, much was said about synergies. And then reading your release, in some points, and I think you also mentioned that during this presentation, you talk about synergies and you also mentioned a few points. But for us, it would be really useful if you could quantify things a bit more. Where do we stand in that path towards reaching like $1 billion in synergies. How much has been captured and how much you intend to capture in 25 and 26. And finally, that's true, if you could tell me a bit more about the portfolio recycling, if you can call it that. You have different assets and certainly this generates a lot of opportunities for the company. But I would just like to learn your view about how you look at the company as a whole. You talk about onshore, you were negotiating still a few things, but what could you do about the asset as a whole? Would it make sense to sell it now that Atlanta is about to start? Maybe you could do that or do something with your stake. So if you could talk a little bit more about your portfolio, that will be appreciated. So I'm glad to hear that you're still following us. Okay, let's talk about the compensation part of the question. We, the board has approved and we will have a better disclosure in our general meeting of 2025. We just approved a new compensation model for the company. This new model contemplates for managers, I mean, monthly wages below the market, but compensation would be very much linked to performance, cash generation, and the appreciation of the shares. In my case, the variable part of the compensation Richard Kehrer Kovacs, Luiz Felipe Carvalho, Carlos Jose do Nascimento Travassos, Mauro Braz Rocha Richard Kehrer Kovacs, Luiz Felipe Carvalho, Carlos Jose do Nascimento Travassos, Mauro Braz Rocha meaning that that stays in the company for three years in terms of what they they acquired and what the company matched up and then with that employees become partners of the company and that's why they have a vested interest in in growing the company so once they buy part of the bonus in shares and matched by the company they can certainly become a shareholder So it's like a pendulum movement, movement coming from both sides. And in some other cases, we also offer, you know, stock option programs. In the case of earnouts, we have some, some executives at the company that also carry shares of the company in their portfolios. This is very important to promote a better alignment, especially In a company that has no controlling officer and we see that there are a lot of people interested in our success. Now referring to portfolio recycling, I think I already talked about that. We develop an initial planning job and this led to 130 alignment activities in different areas of the company. I mean, Not only you have to do something about cost, OPEX, APEX, and development, you have to have a culture. And this culture involves processes, communication, management, and everything aligned in the same direction. So this whole set of initiatives that we evaluated contemplates, among others, the optimization of our portfolio. I said 130 actions. We have a large number of concessions and with low production. I'll give you an example. We just sold 11 concessions with total production of 250 barrels. Typically, we should concentrate our resources in the most productive assets and the assets with higher profitability. I mean, we still have a lot more to do. We still have to clean up the portfolio further and let's see how the process will evolve. I mean, for the assets, for the sale of assets in Bahia, so we intend to move forward with this process of improving our portfolio. We also had a partnership with PG&E and Rio Grande do Norte, meaning that with that we are Improving portfolio management. And this is the objective for us throughout the year. You also mentioned synergies. We've been capturing synergies. I mean, the questions you ask are the same questions our board members ask us all the time. So we are working hard towards that. We already gave you a small idea of our synergies, but I'll ask Pisa who to add something, especially in regards to synergies related to liability management. Well, Luis, I think Pedro referred to About 30% of the target, about $1 billion, this has been deployed. It doesn't mean that it's already being materialized in terms of cash or contract reduction, but what it means is that from the potential of what could be implemented, 30% has been addressed or signed. Let me give you an example. Dr. Luiz Felipe Carvalho, Carlos Jose do Nascimento Travassos, Mauro Braz Rocha I mean, now referring to a second example, the merger of Enalta Energia, it's a subsequent obligation of agreements from the past that occur at the moment of the merge. And the intention is that Atlanta will become an asset from the holding using about 700 million barrels of tax Richard Kehrer Kovacs, Luiz Felipe Carvalho, Carlos Jose do Nascimento Travassos, Mauro Braz Rocha Therefore, we have a delta that accelerates the tax loss. I mean, these are just two examples, but there is yet a third example, which is the foreign exchange debenture issued by BTG, which is currently is located at 3R. So once we did the recycling and the liability management, we will not only issue that at 3R Potiguar, we will do that either at the holding or at some of the subsidiaries that have offshore assets. And obviously this brings huge benefits. I will only give you one more example. When we look at our onshore portfolio and our offshore portfolio, I said before that our onshore portfolio is one of the most profitable ones in Latin America. I think it's one of the most, if not the most, if you look at the number of bearers. And as you also said, that we have a big magnifying lens there. Just look at there and the Brent discount. The ideal thing is to look at that EBITDA number per barrel. It is precisely in the onshore portfolio that we have Sudeni. So this combination of Sudeni plus EBITDA per barrel, which is very competitive, gives us a free cash flow in the last operating line. And once again, one of the best, if not the best in Latin America. And in areas where our profitability is higher of EBITDA per barrel, I mean offshore barrels, especially in Atlanta, the effect will be most concentrated in terms of our financial expenses. I just tried to quantify some financial aspects that are the most relevant ones in terms of that $1 billion synergy. I mean, we already made some initiatives, Pizarro was saying that, but we'll capture that in a timeline. The same thing goes for operating synergies, both CAPEX in our campaign that we just hired for the two Papa Terra and Atlanta Wells, that they wouldn't be done if the companies were separated, and also operating synergies that we have in the field. You also asked me whether Selling an additional stake of Atlanta isn't our radar and the answer to that question is no. Okay, thank you very much. It's very clear and I'm very pleased to see your explanation about compensation. Thank you and have a good afternoon. Our next question comes from Bruno Montanari from Morgan Stanley. Your microphone is on. Thank you for taking my question. I have a follow up and two other questions. Going back to the S A S in Bahia. Could you tell me if the level of interest after the streamlining of the area increase or decrease? And what about engagement? And most importantly, what is your timing expectation for the conclusion of the process? And my second question is about BC 10. If the opportunity arises, would you like to increase the effect or maybe eventually become the operator of the block in the mid and long range? And my last question is, I think 2025 is a transition year in your balance sheet. There will be a very strong deleveraging Thank you, Bruno. Sale of Assets. Okay, we already mentioned that we hope to have some binding propositions in the midst of April. This is all I can tell you. BC-10 is a new asset. It's not in the market, but if it is, we will just look at it. And the use of cash today, we have in some of our debentures, some limitations for buyback and for and Luiz Felipe Carvalho. Do you have any other comments in terms of the venture limitations? Limitations that we have, I mean, the dividend payout and share buyback, is allowed for leverages below 1.5 during 2023 and after the year 2023 if the share buyback increases to 175 no after 25 2025 that level increases to 175 but as Desu was saying the leverage target of the company is close to 1.25 which is Richard Kehrer Kovacs, Luiz Felipe Carvalho, focusing on all the projects already approved, like FID of the two Atlanta and Papateja wells that have very high profitability. So we will bring production without adding costs to the assets. Atlanta's FPSO and Papateja, they already have a predetermined fixed cost. So here we would add, I mean, 20,000 barrels to our stake, and then we would do just marginal capex. It's precisely this kind of mentality that we have for offshore, allowing us to increase production gradually without having very, I mean, a very fast pace of growth, but we will also release dividends in a very intense way in the next three years. So the company has this capacity of paying out dividends, maintaining low leverage without Thank you for joining us. in cases where we want to approve a different region, but the target is, I mean, 30 in terms of magnitude, in order of magnitude. So this is an overview of what we intend to do in terms of cash utilization. Very clear. Thank you.

Next question from Tasso Vasconcelos with UBS. Go ahead, sir. Hello. Good afternoon, Desu and the other officers. Thank you for taking my questions. I'd like to go back to the outlook of offshore fields. At Atlanta, since the connection of the two whales, production seems to be normalized and flowing quite well. So I'd like to get an update of the expected production for the two wells that should be connected in April and also for Papatea. The company is making some adjustments in the wells because of the gas production and this has been a bit discussed here. These adjustments tend to increase production in the coming months. So I'd like to get an update of when all of these adjustments at Papaterra should be completed and what is the expected level of production at the field after these adjustments. Because I think that these two fields together with the resumption of Manatis, the main path for the company to get close to perhaps 100,000 barrels of the company's working interest. So I'd like to have an update, please. Second question going to M&A at the Reconcavo Basin. You acquired two assets, Reconcavo and Rio Ventura, for close to $350 million. According to the certification, there was no great change in the volume of reserves. One year it increased a bit, the other year it increased a bit, but comparing the most recent certification with the first one, the variation was less than 10%. But during that time, a lot of investments were made to the assets. So the question is too bizarre. I'd like to get an update from you regarding what was the total amount invested in those Bahia assets from the beginning, and if possible, a breakdown of the investment. What was made in infrastructure and improvement, structural improvement, and what was in reserves development? These are my questions. Thank you very much. Thank you, Tass. So regarding the offshore fields, the two fields that will start operating at Atlanta and the three new wells at Papa Terra are wells that produced before. So we kind of know the wells performance and our expectations are based on that. So I'll ask Mastrangelo to give you more detail on that. Okay, Tass. Like I said, we're finishing the connection of the wells from today to tomorrow. The last line will be ready, so we expect to start production in the coming weeks, perhaps in the first week of April. Level of flow, the wells that were the highest producing wells in the early production system, wells four and five in the early production system, they got to close to 14,000. And now we are going to see the combined production and the wells producing today are quite stable, as you said. In the case of Papa Terra, equally in the coming weeks, Hopefully in the beginning of April, we should have these extra three wells coming online. Individually, in the past, they produced altogether close to 5,000. This is just to give you an order of magnitude, okay? And for Manetti, like I said, the operator by the end of the month, the operator will be resuming production. And as for M&As, the value we see is how much we paid in the past, the reference number, but we always look forward. So I'll turn the floor to Pizarro to give you more data that you asked about. Very soon in the coming days Tasso, we will be releasing our new reserves certification report that will be very updated and we're going to have many more details. We have invested 40, 45 million dollars in the assets in Bahia. When we took over the Reconcavo cluster, we were already operating Rio Ventura and both assets combined were close to 5,200 barrels of oil equivalent. And as Boeri mentioned, now we achieved a peak of production. Operated by Brava in Bahia, reflecting the 2016 production. So we are close to 9,500 barrels being produced in Bahia. A part of that production is gas that we re-inject and we are working together with Pedro's team, Boeri's team and Pedro's team are working together to monetize this additional gas. So it's a big leap in production. and primarily in the recovery of integrity of these assets. A good part of this financial volume was invested in integrity recovery. We still have some low hanging fruits in the assets, which are not related to the drilling campaign, which are related to monetization of gas, which is the example I mentioned. So again, we are at a moment of a competitive process. We avoid talking about numbers, valuation, potential. So we are just stressing that the Bahia asset, although it's not that relevant in the combined portfolio of both companies 3R and Enalta, it does have a significant value with a production level which is rather high. And let me add, Pizarro spoke about the reserves certification. Before you ask, we're going to have the reserves certificate by the end of the month. We received a first draft and there was no significant change in the report. Okay? Super clear. Thank you very much. Next question from Leonardo Marcondes with Bank of America. Mr. Marcon, just go ahead. Hello. Good afternoon, everyone. Thank you for taking my questions. I'd like to ask three questions. Two questions that are more complex, and one is a follow-up question. My first question is about the integrated drilling campaign at Atlanta, Papaterra, and perhaps Perua. In the advisory, you talked about $200 million, but we understand that this campaign should require more capex than that. So I would like to know if you could give us more color on what you expect the capex to be in this integrated campaign and what you are estimating in terms of production at some of the wells. My second question is about The oil sales contract with Shell for the Atlanta oil. And if you could tell us more about this contract, if it's similar to the previous one, which was very close to brand price or any different characteristics in this contract. And the quick follow up question regarding dividends and leverage. Leverage that you will consider for the payment of dividends in dollars, which is the same as the new covenant, correct? These are my three questions. Thank you. All right. Regarding the integrated campaign, we released the material fact. that stated that we had contracted some equipment and services amounted to the amount you mentioned. And we said that we were going to have an FID, the final investment decision, this half year. And that's what we do when we have certainty regarding the costs and the contracts we're going to sign. 85, 90% of the costs are insured, guaranteed. And this is what leads to the total cost of the campaigns. which are very efficient and productive because we have just tie backs. We don't have to have any new production unit. Pizarro mentioned that and I will ask him to detail that some more for you. Well, Leonardo, let me remind you, we have 80% in Atlanta, currently 62.5% stake of Papaterra, four wells, as you mentioned. These are tiebacks, so almost no investment in the plants and the facilities to integrate. To connect these wells, part of the equipment for Papaterra had been already acquired. So we have about 400 million dollars, which is the working interest of our company for these four wells. And if we look at productivity, you just have to look at what we have in the reserves certification. But for the working interest of the company, this should be close to 20,000 barrels. if we compare productivity capex size with other projects of offshore companies which are listed we are among the best projects exactly for the reason i mentioned that's production there will And that's why it was not difficult to have full alignment between the management and the board of directors for immediate approval of these projects. And this is the reason why Mastrangelo did everything in his power to accelerate the FID. because we had a lot of certainty regarding all of the subcontractors that are relevant so that we could conduct the campaign in a well-planned and successful way. And regarding the Atlanta contract, Pedro, you can add to that. Well, Leonardo, thank you for the question. The contract signed recently with Shell is very different than the previous contract. Shell has been a partner at Atlanta for many, many years selling Produce volume since the early production system. During about seven years of the early production system, they are very relevant player in trading low sulfur oil, particularly in the southeastern market. In addition to being a relevant player in integrated and seamless logistics for a floating of oil in Brazil. It is kind of hard to precise the spreads and to compare with what we had before in terms of trading solution, because previously we had a commercial condition that was agreed upon regarding the brand. But as I said in my part of the presentation, We're cutting the price of the product in the end product for the low sulfur MGO in the southeastern market with a number of nuances regarding the flexibility of combining offloads, combining products, where we have a co-participation of the gains coming from these operations. So this is a contract that will include a little more volatility in profitability compared to Brent isolation over time. In our view, it will be better over time compared to what we had before. Pedro, let me add to that. Leonardo, if we look at the company portfolio, Atlanta compared to the Brent, because it is low-sulfur oil, perhaps there is greater volatility vis-à-vis to the Brent. It is expected that on average the discount will be low. Potentially, in some moments, it might even carry a certain premium. Oil from Portugal, the second big project producing oil, when we think about the final profitability post midstream, this also represents a very low discount vis-à-vis the brand. The Bahia oil, exactly because it is a very light oil and also low sulfur oil, it has a low discount. With the exception of what we have in the portfolio that does not have extremely low discount would be Papa Terra and our stake in BC10. There are some improvements there. But with a blend of products that the company has, we end up having an average discount vis-à-vis the brand, which is very low. and that is why our lifting costs might not be the best among listed companies but the blend of the company considering all components so we can have breakeven EBITDA generation or EBITDA per barrel which is what we are monitoring up close all of that ends up being very competitive I just wanted to underscore that of course this is very much led by Atlanta but also by Portuguay if we look at the company in an integrated way And Pedro has a task of luring this discount that we have for Papatera and Parque Desconches. And yes, Leonardo, we work with dollars. Very clear. Thank you very much.

Our next question from Bruno Amorim with Goldman Sachs. Your microphone is on, sir. Good afternoon. Thank you for allowing me to ask a question. I just have a follow up on Pizarro's comments about the possibility of dividend payout in the coming years. First of all, do you understand that The leverage to be delivered this year, which is higher than last year, because this year your EBITDA is more normalized, whether the target, if this is a target leverage for this year or this is probably stemming from the cash generation of the company. And my second question, I just want to get a big picture about the company's cash generation profile for this year and next. This year, probably envisioning a production of 80,000 barrels a day. Would it make sense to think about EBITDA close to 1 billion US dollars? and this will lead to a cash generation that is relatively low you wouldn't be you know still be single digital in cash flow yield and this would be the best proxy proxy of what would be dividend throughout the year I know that you do not give any guidance I just want to try I'm just trying to validate my rationale So, Pizarro, over to you because you have to report to CVM or the Brazilian SEC. Bruno, thank you for your questions. Well, I have to be very careful because we do not give guidance. The company I mean, as restrictions, there are some instruments because as we said, these instruments limit leverage to 1.5 at the most to allow for dividends, except for the mandatory minimum, which is 25% of the profits. So eventually in 2025, we do have a potential and 25% of the profits of a company, just like you said, may have EBITDA at that level. and it comes in a year where the exchange rate was 6.19 and today exchange rate is much lower and our debt is denominated in US dollars so the financial effect if the exchange rate remains at that level it's positive therefore we see the possibility of paying the minimum mandatory payout and that's relevant having said that I think the most important thing is to look back In 2024, in the first quarter, we had 251 million US dollars of EBITDA. In one quarter, with production at 72,000 barrels. From then on, Brent prices were down a bit. However, the expected production is higher. Therefore, your estimate is very much in line, especially if we look at the history of the company in the first quarter of 2024. As mentioned before, we intend to keep CAPEX close to $500 million. This will allow for increased production year on year throughout the next three years. However, cash generation would be, I mean, in the last line after CAPEX will be positive. Positive this year, potentially even more positive in 2026 and even more in 2027. So this is a trajectory that we We anticipate and what we've been discussing with the board and it is also what allows the company to reach 100,000 barrels and even more starting in 2027 especially with the four new wells in Papateja and Atlanta with the capacity to pay out dividends with low leverage. So it's just a combination of factors. Thank you very much. I just have a very quick follow-up in regards to growth. So this year, obviously you'll have the normalization of Papa Terra's production, Atlanta's ramp up. So in the next coming years, where do you see growth coming from? I mean, these three, these four wells, we have two wells in Papa Terra and two in Atlanta, and they will Farron, in fact, in the last quarter of 2026, so we come in the beginning of 2027 with these four wells in operation. So this more than compensates for any decline in 2025 and in the first quarters of 2026 or 2027, which is already in place without exceeding that capex level I mentioned, we do have the potential to reach a much more relevant Dr. Luiz Felipe Carvalho, Dr. Luiz Felipe Carvalho, We should consider a much, I mean a better behaved CAPEX. So I'm not going to repeat the level of CAPEX we had when we still were working on the full development system. And the last question is about our current cost of debt. And this would be the last question.

Perfect. Just something regarding the capex of our total capex. If we do not consider the 20% there we sold to West Lawn and Atlanta, we are talking about a level of capex in 2024 of $800 million, of which about $400 million is the full development of Atlanta. which will not be repeated in that order of magnitude in 2025. The same thing applies to Papaterra integrity, onshore integrity, the reduction in the number of rigs and that is why we're kind of reducing this intensive CAPEX of the company to start now a moment where both onshore and offshore CAPEX is a lot more related to expansion rather than related to integrity recovery or deployment of a large project like Atlanta. And the last question about the cost of debt. When we look at the cost of our dollarized instruments, the latest debentures that were swapped at a rate of close to 7% and our obligations with Petrobras, in our case with Qatar at BC10, we have a cost of debt close to 8.5% in dollars, equivalent in dollars. and the two most expensive instruments can be prepaid this year and eventually issue new debts. The trend is that the cost of debt is declining. This is what we can tell you so far. Thank you very much. for joining us today and I'll see you next time. Thank you.

Brava's conference call has come to an end.

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