3R Petroleum 3Q23 Earnings

3R Petroleum Óleo e Gas S.A. (“3R” or “Company”) (B3: RRRP3) hereby presents its earnings for the third quarter of 2023 (“3Q23”).  Except as indicated otherwise, the financial and operating information described as follows is presented on a consolidated basis and expressed in Brazilian Reais (R$), in accordance with Brazilian generally accepted accounting principles (CPC) and international financial reporting standards (IFRS).

HIGHLIGHTS FOR THE QUARTER

Consolidated portfolio and enhanced operational efficiency translated into record results

• Record net revenues of R$ 2.4 billion in 3Q23: +4.7x Y/Y and +2.8x Q/Q
• Record adjusted EBITDA of R$ 828.6 million in 3Q23: rises of 4.3x and 4.2x versus 3Q22 and 2Q23, respectively
• Expansion of more than 11 p.p. in consolidated adjusted EBITDA margin (upstream and mid & downstream), reaching 35.1% versus 23.8% in 2Q23: first quarter with integrated portfolio and without transition costs
• Upstream adjusted EBITDA margin reached 53.1% in the 3Q23, +14.7 p.p. Q/Q, while mid & downstream hit 11.6%, + 10.2 p.p. Q/Q, without considering the corporate segment and eliminations
• Optimization of commercial agreements, with record monetization in 3Q23: average price realized on sale of oil equivalent to 93% of the Brent price and price of gas^[1] sold to third parties posted 11% of Brent
• Diversification of oil, gas and by-products customers base creates alternatives for better monetization of production, besides minimizing risks
• Reduction of 21.1% in the lifting cost Q/Q: supported by the integration of the Potiguar Cluster and Macau Cluster increasing production
• Acceleration of Capex with rigs mobilization, evolution of the drilling campaign and improvement in production facilities, being US$ 3 million invested in 3Q23, +99.4% Q/Q and 6.5x Y/Y
• 3R completed the first full quarter of operating in the midstream & downstream segments without any operational discontinuity and healthy increase of EBITDA margin at this segment
• Operational cash generation reached a relevant mark of R$ 451.8 million in 3Q23, +111,8% Q/Q

        [1] In dollar per MMBTU

Operational evolution driven by the revitalization of facilities and investment in production

• 3R begins 4Q23 with production of 45.8 thousand boe/d in October, + 7.2% when compared with 3Q23
• Record production of 42.7 thousand boe/d in 3Q23, +50.6% Q/Q and +2.9x Y/Y
• The share of oil in the production worked out to 79% in 3Q23, reflecting the incorporation of the Potiguar Cluster and organic production increase in the other Company assets
• Mobilization of new rigs supported the record of wells interventions in a single quarter: over 260 interventions: reactivations of wells, workovers and pulling
• Onshore drilling campaign has added up to 26 wells drilling in 2023, with 18 carried out in 3Q23, with results aligned with Company planning
• Increased reliability of installations and operational systems have already translated into enhanced efficiency and production: continuous increase in production posted at the Macau Cluster and lower volatility at the Papa Terra Cluster
• Continued rise at Macau: +27.1% in total production measured in boe Q/Q, and rise of 80% in oil production posted in October when compared to the result for January 2023
• Wide-ranging mobilization to intensify activities of integrity, maintenance and recovery of installed capacity in the mid & downstream segment
• 3Q23 proves the benchmark position of 3R in Brazilian onshore basins, as it has positioned itself as the only truly independent company and one which has achieved major integration into the production chain, resulting in commercial and operational flexibility

Launch of the Company’s first Sustainability Report

• 2022 Report was published based on Global Reporting Initiative (GRI) standards

To access the documents of this quarter, click here.