Brava Energia S A S/Adr

Good day, everyone. Welcome to BRAVA Energia's earnings conference call for the first quarter of 2025. The presentation and comments on the results will be made by the company's chief executive officer, Décio Odoni, and the other officers of the company. 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 is being recorded and will be available on the company's investor relations website, ri.braveneggia.com, as well as the presentation that we 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 will be provided. Before proceeding, We take this opportunity to advise that forward-looking statements are based on the beliefs and assumptions of BRAVE 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 segment and other factors could cause results to differ materially from those expressed in such forward-looking statements. We will now give the floor to Mr. Adesu Odoini. Mr. Odoini, please go ahead. Good afternoon to all. Welcome to our video conference call to discuss Brava Energia's first quarter 25 earnings results. Before I start showing the presentation slides, I would like to put the company situation into context to help you understand our results. So this quarter, Last quarter 25 was a period of transition in the operations of our main fields, Atlanta and Papaterra. Transition after the startup of Atlanta and the restart of Papaterra. Due to 25, which we will report in August, is the quarter of consolidation of operations at these fields, which should only be fully reflected in the financial statements from Q3 2025, which begins in July. We started 2025 with production records. In April, we reached 82,000 barrels of oil equivalent daily, a volume we expect to surpass in May. Actually, in May, 90,000 barrels and in the last few days 94,000 barrels. This transition was reflected in oil sales. As we had to ballast FPSO Atlanta, we did not sell oil in January when the price was still higher. And we had to sell an awful load of off spec oil that had been stored at Papa Terra since the time of the previous operator. The trading numbers for this quarter were impacted by these events. Pedro will go into more detail momentarily. The increase in production has a positive impact on costs of Atlanta and Papaterra. This quarter we had full operating costs of the operation. As the platform went back to operating, while production was still low but ramping up, for this reason, the reported lifting cost does not yet reflect the values we are already achieving. For example, we reported $20 per barrel with FPSO chartering and $11 without the chartering. But at current production levels, we have reached $6 per barrel without considering FPSO chartering and about $10 per barrel, including the platform. and Papaterra after stabilizing production at the levels recently reached around 18-20,000 barrels, we will focus on improving efficiency and reducing operating costs. With the connection of the last two wells, we will be completing phase one of the full development of the Atlantis system and entering a phase of harvesting the fruits of the capex realized. This is 2022. Well, we invested more than $2 billion at Atlanta, and now it's about time we reap the fruits of this investment. Travassos will provide more details on these topics. On short, we continue to reduce costs and leave behind again that stage of investments in integrity of the facilities and installations. This was very intense after the asset was acquired by 3R. We achieved an EBITDA of $35 per barrel, which is still among the best in the region. And in the last few months, we made progress with steam injection and started a nitrogen pilot task and Boheri will address these points as well. We apologize, but we lost the sound of Mr. Odoni. Mr. Odoni, your microphone is muted. You may proceed now. Now we can hear you. Well, I don't know how this was put on mute. So I was talking about onshore and I said that Boeri will give us more detail on the progress made to reduce costs. related to steam injection and the nitrogen pilot test. And the most important thing for an oil producing company like Brava, which is improving operations, this is happening already and this will have consequences, which as the wise men once said, come later. With this, we will be able to accelerate cash generation and deliver to the company our main short-term objective. Comparisons with Q124 are imperfect as Brava only began operating in an integrated manner in August last year. The reported leverage is a snapshot of the past as it captures the reality of the last 12 months, which is different from the current reality. If we look ahead to the next 12 months, we get a different picture with much lower leverage, and that's what we are working towards. Even with production that still does not reflect the full potential of the assets, we achieved EBITDA of $182 million in Q1 2025 and maintained a solid cash generation. Humanity is coming back online and with the startup of the new wells at Atlanta, we expect to have better results in the coming quarters. After achieving production and cost records in Bahia, we decided to end negotiations regarding the possible sale of onshore and shallow water assets. According to material fact communicated to the market, we made this decision in order to maintain a diversified portfolio which allows us to mitigate risks. Our onshore assets, like I've said before, give us greater flexibility to adjust capex according to the price avoid. While the offshore projects give us scale and a greater potential for increasing production. This flexibility of the combined portfolio has allowed us to reduce the investments originally planned for the year by 15%, now at around $450 million, without having a substantial impact on expected production. At the same time, we are reducing structural costs by more than 10%. As a result, we have achieved a breakeven EBITDA of around $30 per barrel. Considering financial expenses and capex, We generate cash with oil at around $15 per barrel. So even if there is a more depressed Brent scenario, we will lower our rent. With the same objective, we are developing initiatives to partially or fully replace our position as creditor of 412 million dollars. And we're making progress in liability management of that's due this year. Pissarro will give us more detail on this. In April, we replaced Mastrangelo, our former COO. And now Travassos is taking over and this is his first call. So welcome Travassos and I wish you a great success. We also recently started using EY as our auditor. We published our reserves report, which shows our ability to maintain production for a long period of time. And we also released our sustainability report, which includes a list of the initiatives related to governance, the environment, and people. We continue to build a culture that seeks to generate value for our shareholders and the results we have achieved as a result of our team's efforts. And that's why I'd like to thank everyone, all of our employees for their work. So I'll finish the introduction and I'll move to the slides. This slide summarizes a good part of what I've said already. It brings us production in Q1, which has increased since then, EBITDA generation, and our strong cash position. The strong cash position that the company is hosting. Next slide. You have a map of our production and the Evolution of production by the company in the last few years and quarters. Like I said, in the last few weeks we achieved more than 94,000 barrels and down below we have our reserves certification. 15 years of production of 1P reserves considering April production. which ensures the sustainability of our operations for quite a long time. Next. Now let's talk about our operating data. And the important thing to mention here is that with this level of production, we are also going to have now Mana Tea going back online and the operators taking initiatives to resume production. We have two new wells being connected at Atlanta. They should be completed by the end of this quarter. And we have a high percentage of oil production, which improves our earnings. Now moving to offshore. I will turn the floor to Travassos because he's going to have his debut now as COO. Good afternoon, everyone. I will bring you some highlights of the offshore segment. We're at a moment of strong production increase. In this quarter, we achieved an average of 41,000 pairs of oil equivalent in the last 20 days at Atlanta by connecting wells 4H and 5H. We expect to connect another two wells by the end of June this year, and this will bring us another production increase at Atlanta. As for Papa Terra, we resumed our production capacity at Papa Terra. We are now producing around 20,000 barrels daily. We achieved efficiency at Papa Terra of 93%. And I believe that this is the historical record. for Papa Terre. And if we look at the bottom graph, we see the trend last year and we can see a clear recovery in Q1 of 2025. Manatee has, as you mentioned, production at Manatee has been resumed with two wells or have pressurized gas pipeline. So now it's just a matter of time for the operator to resume production. And this will bring us an improved result to our operation. We've also had good results in BC 10. So we're in an up swing trend. And when we'll look at this chart, I think that this becomes clear. In the first quarter, we have a production of 37,000 barrels and in April, 48,000. So we are in an upward trend. At Atlanta, we have operating efficiency and at Papa Terra, likewise, we have been trying to pay the attention that this asset deserves. We are working strongly to focus on the main efficiency points, and that's what we addressed in Q125, and we're starting to reap the fruits of that initiative. So basically, this is what I have for the offshore business, and I turn the floor to Boetti to speak about our onshore business. Thank you. Good afternoon. Okay, so let's continue the topics that we addressed in the previous call. So we continue advancing in our plan to have steam injection generators that we installed at the Estreito field. We started in June 2024 to install the new steam generators at Estreito. In September of 2024, We had production at Stretu that was not so high and since then we've been improving production and we had an 18% improvement compared to the production at September 24. So the activities of steam generation at Stretu is giving us positive results as expected. We intend to install another two steam generators at Stretu and three of those will be installed in Alto do Rodrigues field. Now speaking about the EOR, which is Enhanced Oil Recovery. EOR, we have two important projects. One is a nitrogen project in heavy oil fields, and a polymer project in intermediate oil fields. A nitrogen project consists of injecting nitrogen in 30 wells in Facinda Belém, and others. We have eight wells in Fazenda, Berlin, and we have the production results of the first three. And the results have been very encouraging, very positive, and according to what was expected, a reduction in water production and a good increment in oil production. By year end, we expect to have evaluation of the nitrogen project so that we can plan the full development of this technology. And with the polymer EOR project, we are advancing the licensing project of the first injectors. And we'll do a total of 10 injection wells. We are moving forward with the licensing and trading issues. Speaking about drilling in the previous goal, I said that we were going to use a case in drilling technology to improve our drilling time even further. And that's what we did. And we achieved an important improvement of 22% compared to what we were doing before. And we were able to drill wells in Alto de Rodriguez in an average time of 1.4 day. 22% better than what we have been doing so far. And almost 100% of what was being done by Petrobras. when they were taking three to four days. And all of this will be included in our budget for 2026. And with a lower cost, we will be able to make possible projects that were impossible or not feasible before. And speaking about capex and given the drop in the Brent oil price, And as you mentioned in the beginning, we need to be efficient in the use of our campaigns. We reduced our drilling activities, ending the 2025 campaign. We are ending the drilling of the last well. Some drilling rings were demobilized. The last one will be demobilized now in the end of May and in the coming month we'll do the same with two work over rigs. So we're going to have just eight rigs for the whole onshore. One work over in Bahia, five work over rigs in Rio Grande do Norte and Ceará and two pull in rigs in Rio Grande do Norte and Ceará. And this reduction It's not true because the projects are not feasible for the current prices, but our breaking even point is lower. is lower than this brand. It's not that, it's just that we're doing this to protect our cash creation or cash generation and reduce leverage. Speaking about the OPEX, we continue to improve the efficiency of our operations. In the first quarter, we achieved $17.7 per barrel. And in the month of April, This dropped to less than $16 per barrel, so we continue to work to improve our operating efficiency even further. We are re-establishing some plans to make some methodology changes in the way in which we operate. by integrating new technologies, real time data collection, monitoring of the operations also in real time, which will allow us to reduce costs even more given a better use of our resources and problem detection and solving in real time. So now I'll turn the floor to Pedro to talk about the commercial.

Thank you, Boeri. Can you please change to the next slide, please? Here, the highlight is trading. And here I will talk about four main topics starting with Atlanta. This quarter we had the start up of the first offloads of PSO, FPSO Atlanta. This is a record in terms of loading, one million barrels. in Load in the platform, which was initiated in early March after the initial formation of the platform. Right after that, we conducted the first operation of co-loading between Atlanta and both for exports to Southeast Asia. Both operations were very close to Brent quotes within the pricing window. during an environment of high volatility, both in terms of oil, also in terms of all of the margins associated to fuel oil with low sulfur content for in part . And if you look at the year, the quarter is initiated with bring prices close to 80 US dollars and it ended with prices close to 64 dollars. And in March alone, the margins of low sulfur fuel oil presented high volatility and there was a significant reduction in terms of the normalized Track Record, but this has been already recovered throughout the second quarter. And even though the profitability of the operations were very close to Brent quotes, the second highlight at Papa Terra, they resumed operation and efficiency hit record numbers. We have five uploads conducted in the quarter. However, with a low revitalization program of the platform where we decided to do the offloading of an exceptional cargo about 400,000 bears. They were in the platform since the days of the previous operator, and there were still issues related to quality. And that's why, you know, that load was exceptionally well-priced. Since then, we had more than five uploads, all in compliance with the sales contracts and a progressive improvement in the quality of the operation. Right now, we are working in the negotiation of new conditions to trade Papaterra barrels, and this will reflect all of the investments that we did to improve the logistics of the platform. And this will also reflect in the contribution of the heavy oil from Papaterra, especially when this is mixed with the pre-salt production. And we hope that these new conditions come into force in the second half of the year, given the improvements in current conditions. And the third item has to do with operations of our refineries. I would like to highlight the signature of a new oil supply contract with this new partner, which reinforces a long-term commitment between both companies. It's a two-year agreement involving investment commitments to increase the robustness of the operation and trading that would mean a difference of 20 to 30% vis-a-vis the previous agreement. In the refinery is still as of April, we started independent operations to sell fuel oil, discontinuing the partnership with rising. And since then, we already serve more than five clients with different destinations. And these results will become more apparent as of the second half of the year. And finally, speaking about gas, we also had a quarter of high volatility. Well, this was a higher exposure to spot prices because they were a bit more under pressure. But there was a very positive combination because there was a high performance of gas production in Bahia. However, there was a higher solution of demand due to some operating issues from one of our clients that supplies gas. But all of these issues are already normalized. Now I'll turn the floor to Pisa who will go on and speak about the financial highlights. Thank you, Pedro, and good afternoon, everyone. We will now talk about the financial highlights of the first quarter of 2025. Slide 14 shows net income of the company, net revenue of the company, with a significant evolution between the fourth quarter of 2024 and the first quarter of 2025, reaching 491 million BRLs in the period. that is a 47% increase, mainly attributed to higher production coming from offshore assets. Next slide. Here we show that 52% of upstream revenues are related to offshore assets, and out of that total, slightly over 90% are revenues stemming from oil sales. Now, moving to slide 16, here we show our EBITDA evolution, which reached $183 million in the first quarter of 2025. Offshore assets, they not yet reflect the potential of the portfolio. And with the recent ramp up in Atlanta, we had a relevant EBITDA increase when compared to the previous quarter. In offshore, I would like to highlight the EBITDA per barrel of onshore operations, reading $35 a produced barrel with a break even for EBITDA generation, close to $28 per barrel. Now, next slide. Here we show lifting cost. The highlight goes to the second consecutive cost reduction per barrel in onshore and offshore. We see Lift costs slightly higher momentarily, and this will be reduced by fixed costs both in Atlanta and Papataha as well. With an increase of that ratio of offshore over total production, consolidated lifting had a slight increase momentarily until we update the offshore costs. Next slide. We show CAPEX in the quarter, which also contemplates investments to connect both wells in Atlanta and all of the subsea equipment adding up to 43 million barrels. The remaining approximately $108 million contemplates $36 million in onshore drilling. On that note, I would like to highlight that the company decided to postpone the onshore drilling campaigns due to rent prices, which reduced the number of rigs. And this is going on throughout the second quarter, as mentioned by Boetti. Until the beginning of the third quarter, the company will have only eight work over rigs and no drilling rigs, meaning that the chance to reduce capex in the coming quarters is A CERTAINTY, BOTH FOR OFFSHORE AND ONSHORE. IN THE NEXT TWO SLIDES, I'LL TALK ABOUT THE COMPANY'S CAPITAL STRUCTURE. SLIDE 19, WE SHOW THAT THE NET DEBT OF THE COMPANY IS AROUND 2.1 MILLION not considering receivables from the charter from FPSO Atlanta and a cash position of $831 million. Very robust. I would like to highlight that this temporary leverage tends to be reduced with increase of production already experienced in April and May. And this does not consider production in Manatee and the last two wells in Atlanta. In addition, the company is getting operating cost reductions, reducing admin expenses, and also capex in relation to what was projected for the year. And we are also creating alternatives for the chartering at FPSO Atlanta. I will also like to mention that increase in offshore production will dilute fixed costs, which can more than compensate more challenging breadth scenarios. And this was seen in April when production increment more than offset rent reductions once compared to the average in the first quarter. And in the next slide, we show that the cash position is much higher than all of the obligations for 2025 and 2026. And we would also like to highlight that the next phase of liability management will be earmarked to fund in part or in full the exchange rate debentures maturing in 2027. Next slide, we show the cash flow for the period and the hedge position. We had 1 billion BRLs in operating cash flow and we amortize approximately 650 million BRLs considering the balance. between earn out payments to Petrobras, which is part of the compilation of our gross debt, the prepayment of lower debts, which were more expensive, and also the issuance of $64 million, which was very competitive with interest rates below 7% in dollar terms. In terms of our hedge position, our position was reinforced and we have 24,000 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 and slightly below 10,000 bears with a floor price of $61. This position has been reinforced now at the beginning of the second quarter. Now I'll turn the floor back to Desu for his final remarks. When I finished my initial remarks, I was told that I had some connection issues. So this shows that operating problems occur everywhere. So I will shut down my video to improve my connection. So as a priority for the next coming months, is cost reduction and deleveraging. We are changing the focus of the company. At the moment that we are deploying projects and acquiring assets, we have a lot of capex. So this is a period where we are now trying to reap the benefits of our capex, especially in Atlanta and Papaterra and also Manatee that is ramping up as we said before. We reach 94 barrels a day as an average production in the past week. And this efficiency search is now being reflected in our lifting cost. We had $20 per barrel with the chartering at Atlanta. But if we look at a production levels, it's below $6 per barrel without considering the FPSO in that platform. In onshore, when we combine our production and upstream assets, the price of per barrel is $35, very productive. And this has to do with our efforts to reduce capex for the year. So at the current oil prices, our capex is around $450 million a year, and this does not impact production in any way relevant. So this higher efficiency will also support our deleveraging. Therefore, we believe that despite a Brent challenging scenario, we will have EBITDA below $30 per barrel. This is a great break-even point. And if we consider financial expenses with CAPEX, Our free cash flow generation occurs with oil prices at around $50 per bear. That means that we are moving forward to deleverage further and this will allow us to think about the new phase of the company. And with that, I would like to thank you all for your attention. And now I will open the floor for questions. Thank you. We will now initiate the Q&A session. In case you have a question, please click in the Q&A icon in the lower part of your screen and please type in your question. To ask live questions, just click in the same icon and type your name and company or Use the raise hand button. For questions, you can use the Q&A feature or raise hand feature. Please wait while we collect your questions. Our first question is from Vicente Falunga from Bradesco BBI. Vicente, your microphone is already enabled. Good afternoon, , and all of the Bravo team. I have two questions. My first question is about the cash generation outlook for the second quarter. And my second question is whether you could elaborate a bit more about the divestment of your assets in Bahia. What is the plan for the asset in terms of drilling, you know, the field and What does it take for you to unleash the gas production and whether you could also have strategic partnerships in your Braille assets? Thank you. Thank you, Vicente. I would like to start by saying, as I was commenting earlier on, that we have cash generation. We'd braid at around $50 per barrel. considering financial expenses and capex. So I think that once production increases in the next few weeks, we will be well positioned to improve our cast generation, not only for the next coming quarter, but also for the entire year. Now, in regard to the Bahia assets, we analyzed the results that we had in Bahia more recently. But, and we continue to improve our cost and efficiency in Bahia. Things are moving quite well. And we also managed to increase production. Now we are working to sell our gas production that we have in Bahia. and with that we will have a double effect. We will increase revenue and by the same time we will dilute costs. We are also putting a lot of efforts to integrate the activities of the assets in Bahia. We have manatee, we have compression in Bahia with great possibilities which is now running idle, I mean at only 45%. So we are discussing with the operator the way to use that facility and this will certainly increase our efficiency in terms of gas production in that territory in Bahia. We are also thinking about the future of Mana tea. Mana tea can be used to store gas in Bahia. So we have the potential to leverage our asset in Bahia. So we are also trying to work to reduce costs of our production in Bahia. In Bahia, more particularly, we continue to work to reduce costs even further. And as I mentioned before, at the end of last year, we exchanged the OEM Operator in this has reflected in an improvement both in terms of costs and our operations. We also reduced headcount. We reduce the use of surface facilities and we will continue to work to promote further reductions while at the same time we will We will enhance our gas production because we could add more sales once we enable that gas that is not being used or is idle. And all of that will certainly allow us to make improvements in the free cash generation in Bahia. Thank you.

Next question from Leonardo Marcondes, Bank of America. Go ahead, sir. Hi, good afternoon. Thank you for taking my questions. I have two questions. The first is regarding CapEx. During the presentation, you spoke a little about this, but I'd like to understand some points a little better. First, what was non-recurring in this quarter and should not be repeated in the coming quarters. Secondly, I'd like to understand this reduction of onshore rigs and how this can impact expectation of capex and production vis-a-vis the certification. And thirdly, I'd like to understand what you're thinking about capex for 2025 as a closed year. And then I have another question for Travassos. I would like to hear from you, please. What are the main challenges and opportunities that you identified in Brava's assets? You've been with the company for just a little time, and I'd like to understand the priorities and plans for the offshore fields. That's what I have. Thank you very much. Thank you, Leonardo. I've been told that my sound is dropping. I apologize, so I'll keep my camera off. As regards CapEx, we are completing a very CapEx intensive phase at Atlanta. The completion of phase one of the full development, $1.3 billion. And now we only have to connect the last two wells in the next 45 days. With that, We no longer will need to make this major investment for the company. The company is also leaving behind a phase of major investments to improve integrity of the Papateha platform. And this will change the level of offshore capex. We just need to drill four wells, two at Papaterra, two at Atlanta. And there's also a part of the FPSO, but we're addressing integrity. There's always a lot of work to be done in that regard, but much less. And this reduction in the number of rigs will happen with very little impact on production. And I'll ask Boetti to explain what his plans are in more detail for the onshore operation with this reduction in the number of rigs. But before that, I have to tell you that we are working with an expectation of $450 million of capex for the year. Boetti and then Travassos to address the question about offshore challenges and opportunities. Hi Leonardo. Well, to add to what Des you said about capex, about 50% in the first quarter was linked to the onshore operation. What? We will not continue? Well, we will reduce the number of rigs as mentioned. A strong reduction in capex. in this last part of 2025 and also in the steam generation project. We have executed about 75% of the capex for this project. So what's remaining is 25% of the total capex for the project. And speaking about onshore production and how we will reduce the impact of having fewer rigs. Like I mentioned, we have a possibility of monetizing gas in Bahia. This is an opportunity that we have in our hands. We are working also on a project to increase gas production in Rio Grande do Norte. We have a plan to increase gas production and this is evolving quite well. There are some opportunities at Macau. From the top of my head, I remember we doubled the production of gas in Canto do Amaro and Rodrigues, and all of that continues to evolve. And also our compressors of the wellhead to reduce pressure and have an increased production of gas in the Rio Grande do Norte fields. And this month, in the end of May, we will be finalizing the revamping of the Sechys compression plant. Over there we have a compressor's plant that will allow us to increase gas and oil production because these fields are being explored with gas lift. And these compressors are not yet working with the expected efficiency. But like I said, we will be finalizing this by the end of the month. All of these actions put together plus some improvement activities in Canto do Amaro will allow us to offset the reduction of production due to fewer drilling rigs from now to year end. We expect to maintain onshore production at the current levels. And let me add, before I give the floor to Travassos, Leonardo, if we look at the first quadrant, we had $150 million of capex. Of this 150, more than 40 are here packed to Atlanta. And in a way, this will no longer be recurring when we complete the connection of the last two wells. And we have about $35 million for onshore drilling. And as of Q3 of this year, we should no longer be drilling onshore in 2025. So these two effects are the main effects that will allow us to normalize the CAPEX profile at a much lower level than Q1. This does not happen fully in Q2, but we do observe a very relevant reduction in Q3 and Q4 2025 travasses. Thank you, Pisa. It's quite interesting, the point that you mentioned. Because, you see, we continue to connect wells now, getting to the second half of the year. Now, Leonardo, thank you very much for your question, because it gives me an opportunity to speak about the challenges I'm seeing at Brava. Of course the main challenge is having a capital structure that is streamlined, lean, working with efficiency, reducing the lifting cost, and overall these are the challenges. Now speaking about each one of the assets at different stages, when we look at Atlanta, we have efficiency, connection of the wells, we plan to top up the unit very soon. We have a current production of 43, 44,000 barrels with a plant capacity of 50,000 barrels. So we imagine that we can top up that unit And in parallel, we have a campaign to increase efficiency at Papa Terra. For Papa Terra, we had an important challenge. We had about 12,000 or 13,000 barrels daily, and now we are at around 20,000, 21,000 barrels. So for Papa Terra, I understand your question. You want to know about the upsides and where we're going to focus our management. And we have to pay the The attention that this asset deserves, we achieved an efficiency of 93% There were some operational threats to our efficiency, but we are addressing each and every one of them. So we have these two assets at different stages and different challenges. And we have Manatee. We see opportunity at Manatee. We are not the operators, but we believe that Brava has a lot to collaborate with that asset. We have the Perua asset with an excellent operating efficiency. We operate Perua at low cost and high efficiency. And I think we can apply that to Manatee as well. and bring our experience to that asset favoring Brava and our partners. So overall, these are the points and opportunities that I would like to highlight and thank you very much for the question. Excellent. I thank you. Have a good day. Thank you, Leonardo. Next question from Gabriel Baha with Citi. Go ahead, Gabriel. Hi there, thank you, that's too bizarre in the whole private team. Well, for a quick follow-up, I think that Atlanta, the start of Atlanta has been very successful. And I think that the next concerns we have, I'd like to hear from Travis in his little time heading the offshore operation. I'd like to hear from him about decline of production. It might be too early to speak about that, but perhaps he could share with us his first impressions about the behavior of the reservoir looking forward so we can understand better production profile. That would be interesting. Second point about capital structure. Perhaps we'll have a different moment of oil price, a little more bearish than what we had in recent years in Bizarro mentioned investments and being more rational about the investments. So I'd like to hear from you about production peak. Something around 100,000 barrels daily produced in two years. Are you maintaining this? Because I want to understand the recurring maintenance capex of the production if we have that level of production or if you could change your mindset depending on the oil price. So my question is, how sensitive are you to oil price to get to this level of production and investment? These are my two questions. Thank you. Thank you, Gabriel. Travassos will answer the first one. Thank you, Desu. Thank you, Gabriel, for the question. It's an excellent question. Actually, when we speak about decline, we're talking about expectation. We're talking about estimates. So we have to speak about a typical decline for a heavy oil reservoir. So what do we expect in Atlanta? We're going to have a peak of production. And then we're going to have a more marked decline initially. This marked decline will be offset by the phase two of Atlanta, which is expected for the end of 2026. And then we're going to see another marked decline in the beginning, but with a very long tail of production. So this is the expected behavior for the rest of the world. In this start of production, we have seen results that are slightly better than what we estimated and we expected the decline curve will be like this. The next three to four months, we might see a production decline, but then that will pick up again. As we deploy the project and we will see a much more even behavior. That's the typical behavior of a heavy oil reservoir as what we have in Atlanta and for capital structure. Well, that will be answered by Bizarro. Well, it's Desio speaking for capital structure. We are getting close to 100,000 barrels daily in the capex level. We have to maintain this level of production in the coming years is lower than what we have executed recently. We don't have any major project like Atlanta to implement, and this is what we're working with. So Pizarro, could you give us more color regarding that? Thank you, that's you. Well, Gabriel, in our business plan, we have the drilling of four wells, two at Atlanta, two at Papateja. The breakeven Brent for this project is very low, very low. below $25-$27 because this whole production will be incremented practically without added costs and diluting fixed operational costs RFPS or Atlanta and after two units at Papatea. So the probability of maintaining these four wheels in our business plan for 2025-26 is very, very high. And with these four wells alone, we will more than offset the expected production decline in the whole onshore and offshore segments until these wells come online at the end of 2026. So we continue to maintain a production level above 105,000 barrels average production for 2027 with these four wells alone. The part which is much more flexible is the onshore part, and that's why we demobilize the good deal of the rigs and postpone some of the investments, as Boyd mentioned. These are also profitable projects, even with the current Brent oil price of $60. However, with the aim of maximizing free cash generation, we are postponing the campaign. On the other hand, we can resume these campaigns if the Brent oil prices improve in the coming quarters. But what is fundamental in my answer is that the business plan is maintained with these four wells, when obviously If we have even more challenging Brent scenarios, we can be led to reassess these four wells, not because of profitability, but to maximize cash flow. But for now, the project is maintained. Thank you very much. Well, we need a very radical scenario, right? Because the break even price is low. and we don't need to invest in the platforms. So thank you. Thank you for the questions.