By Brazil Stock Guide – PRIO SA (PRIO3 BZ) posted record adjusted EBITDA of US$ 879 million in the second quarter, up 218% from a year earlier, as the Wahoo ramp-up and a larger stake in Peregrino drove production and sales to all-time highs.
Average production reached 172,000 barrels per day, rising 72% year over year and 11% from the first quarter. Oil sales increased 87% from a year earlier and 3% sequentially to a record 15.3 million barrels.
Lifting costs fell to US$ 8.90 per barrel, down 36% year over year and 5% from the previous quarter, as higher Wahoo volumes diluted the cost base and PRIO optimized operations at Peregrino.
“We set three records during the period: average production of 172,000 barrels per day, sales of 15.3 million barrels and adjusted EBITDA of US$ 879 million,” management said.
Total revenue rose 184% to US$ 1.44 billion, helped by the higher sales volume and a 45% increase in benchmark Brent prices. Net revenue advanced 160% to US$ 1.22 billion.
Adjusted EBITDA excluding IFRS 16 reached US$ 878.6 million, with the margin widening to 72% from 59%. Net income on the same basis rose 169% to US$ 413.3 million.
Including IFRS 16, adjusted EBITDA was US$ 901.3 million and net income totaled US$ 392.7 million. PRIO’s statutory accounts filed in reais showed net income of R$ 1.96 billion, up 188% from a year earlier.
Wahoo changes PRIO’s production base
PRIO completed the first phase of Wahoo’s development during the quarter. The field began the period with two wells producing about 20,000 barrels per day through a tieback to the Frade FPSO.
A third well was connected in April, lifting output to 30,000 barrels per day, followed by a fourth in June that took Wahoo to 40,000 barrels per day. It was the first field development executed entirely by PRIO.
The Valente cluster, comprising Frade and Wahoo, averaged 61,100 barrels per day, up 165% from a year earlier and 87% from the first quarter. The cluster generated 35.2% of PRIO’s quarterly revenue.
The increase came despite a gas-lift line failure at Frade in early May that temporarily halted three producing wells. PRIO completed the repair in July, allowing the Valente cluster to subsequently exceed 70,000 barrels per day.
The company has also begun drilling two new production wells at Frade, with start-up expected in the third and fourth quarters.
Peregrino accounted for 37.5% of revenue and averaged 74,500 barrels per day attributable to PRIO. Production rose 90% year over year, reflecting the acquisition of an additional 40% interest from Equinor in November 2025, which increased PRIO’s stake to 80%.
Output fell 7% from the first quarter following an electric submersible pump failure at the C-26 well. The workover was completed in April.
PRIO brought the A-15 well in the Isolado reservoir online in late May, returning gross production at Peregrino to more than 100,000 barrels per day. Two additional wells are scheduled to be connected during the third and fourth quarters.
The company also completed repairs to Peregrino’s gas-import pipeline. Once recommissioned, the system will allow PRIO to replace diesel-fired generation with natural gas, reducing operating costs and emissions.
Albacora Leste production fell 18% year over year and 16% sequentially to 22,100 barrels per day after hydrate formation interrupted the ABL-68 well. Operations were restored in early July.
Export tax limits capture of higher Brent
PRIO achieved an average benchmark Brent price of US$ 94.60 per barrel during the quarter. Its equivalent FOB price was US$ 87.69, resulting in a discount of US$ 6.91 per barrel, an improvement from US$ 8.15 in the first quarter.
The benefit of higher oil prices was partly offset by Brazil’s 12% crude export tax, effective since March 12. Domestic and export sales taxes reached US$ 114 million, compared with US$ 7 million a year earlier. In its statutory accounts, PRIO recognized a R$ 562.9 million impact from the export tax.
The commercial result was negative US$ 103.7 million, compared with a US$ 30.6 million loss a year earlier, reflecting higher volumes sold under arrangements in which PRIO delivers the crude to customers.
The financial result deteriorated to a US$ 120 million loss from US$ 55 million, mainly because of higher interest expenses and the net effect of hedging operations.
Leverage falls to 1.5 times
PRIO ended June with net debt of US$ 4.05 billion, down US$ 326 million from the first quarter. Net leverage fell to 1.5 times adjusted EBITDA from 2 times three months earlier.
The reduction came even as the company invested in new wells, completed Wahoo’s development and repurchased 9.3 million shares.
PRIO also repaid the remaining US$ 168.7 million balance of a bond issued in 2021 and refinanced US$ 354.1 million of bilateral debt originally due in 2027, extending maturities to 2028 and 2029.
The average cost of debt ended the quarter at 6.4% a year, with an average duration of 2.7 years.
The operating momentum continued after quarter-end. PRIO’s production climbed to 196,260 barrels of oil equivalent per day in July, up 10.2% from June and the company’s highest monthly average of 2026.
Leave a Reply