Earnings call transcript: Brava Energia Q3 2025 misses EPS expectations

Brava Energia’s Q3 2025 earnings call revealed a significant miss in earnings per share (EPS) compared to forecasts, with actual EPS at $0.3226 versus a forecast of $0.682, resulting in a 52.7% negative surprise. Revenue also fell short of expectations at $3.01 billion compared to the forecasted $3.12 billion, marking a 3.53% miss. Following the announcement, Brava’s stock price dropped by 4.63%, closing at $15.35, reflecting investor concerns over the company’s performance.

Key Takeaways

• Brava Energia’s EPS and revenue both missed analyst expectations significantly.
• The company’s stock price decreased by 4.63% in post-earnings trading.
• Operational efficiency improvements were noted, with record production levels.
• The company has a strong focus on deleveraging and cash generation.
• Upcoming drilling campaigns are planned, with expectations for production stability.

Company Performance

Brava Energia reported a mixed performance in Q3 2025, achieving record production levels of 92,000 barrels per day, primarily driven by oil. Despite operational efficiencies, including a reduction in lifting costs to $15.7 per barrel and improved margins at 42.5%, the financial results were overshadowed by the earnings miss. The company continues to focus on operational efficiency and cost management amid a volatile oil price environment.

Financial Highlights

• Revenue: $3.01 billion, missing forecasts by 3.53%
• Earnings per share: $0.3226, falling short of the $0.682 forecast
• EBITDA: $238 million, reaching a record high
• Net debt reduced, with leverage ratio improved to 2.3x

Earnings vs. Forecast

Brava Energia’s Q3 2025 results showed a considerable gap between actual and forecasted figures. The EPS surprise of -52.7% indicates a substantial deviation from expectations, which is significant compared to previous quarters. Similarly, the revenue shortfall of 3.53% is notable, suggesting challenges in meeting market estimates.

Market Reaction

Following the earnings announcement, Brava Energia’s stock price fell 4.63%, closing at $15.35. This movement places the stock closer to its 52-week low of $14.15, reflecting investor disappointment in the company’s financial performance. The broader market trends also indicate heightened sensitivity to earnings misses in the energy sector.

Outlook & Guidance

Looking ahead, Brava Energia remains focused on cash generation and reducing leverage. The company plans drilling campaigns in Atlanta and Papa-Terra for 2026, with expectations for production stability and potential increases by late 2026 or early 2027. Despite the current challenges, Brava aims to maintain low onshore capital expenditures next year.

Executive Commentary

Décio Oddone, an executive at Brava Energia, emphasized the company’s unwavering strategy: "Our strategy does not change. Our focus is to deleverage the company." He also expressed optimism about production recovery: "We hope to see some recovery in our production coming now in the next few weeks until the end of the year."

Risks and Challenges

• Oil price volatility could continue to impact sales agreements and revenue.
• Geopolitical events affecting global refinery operations may influence bunker prices.
• The temporary shutdown of production for safety improvements poses operational risks.
• Continued focus on deleveraging could limit flexibility in capital allocation.
• Market sensitivity to earnings performance may affect stock price stability.

Q&A

During the earnings call, analysts inquired about the company’s water cut in the Atlanta field, dividend policy, and future production trajectories. Management provided detailed explanations, highlighting flexibility in capital expenditures and operational strategies to navigate current challenges.

Full transcript - Brava Energia SA (BRAV3) Q3 2025:

Tess Rodoni, CEO, Brava Energia: Hey everyone, welcome to the conference call to discuss Brava Energia’s third quarter 2025 results. The presentation and comments about the results will be made by Brava Energia CEO Tess Rodoni and other members of the management. There is simultaneous interpreting on the platform. To access it, you need to click on the interpretation button on the bottom of the screen and choose the language of your preference. This conference call is being recorded and will be available on the company’s IR website, ri.bravaenergia.com, where you can also find the presentation that we will show here. I’d like to remind you that all participants will be in listen-only mode during the company’s presentation. Later, there will be a question-and-answer session. Other instructions to participate will be provided.

Before proceeding, we would like to inform that forward-looking statements are based on beliefs and assumptions of the Brava management and on information currently available to the company. Forward-looking statements may involve risks and uncertainties as they refer to future events and dependent circumstances that may or may not occur. Industries, lists, and journalists should take into account that events related to the macroeconomic environment, segment, and other factors may cause results to differ materially from those expressed in such forward-looking statements. For opening the presentation, we’re giving the floor to Tess Rodoni. Mr. Rodoni, you may proceed.

Interpreter: Obrigado por nos acompanharem na divulgação dos resultados.

Tess Rodoni, CEO, Brava Energia: Good afternoon, everyone, and thank you for joining us for the release of Brava Energia third quarter 2025 results. As always, we’ll start with the traditional disclaimers and then move to the highlights of the period. In this first slide, we can see that we continue on a path of increasing production, cash generation, and deleveraging. Production reached record levels both onshore and offshore. Production costs decreased. Phase one CapEx for Atlanta is now behind us, and we continue to optimize onshore CapEx. We also executed efficient liability management, replacing more expensive debt and monetizing credits associated with the FPSO Atlanta. As a result, we reduced the company’s cost of debt from 8.7% to 8.2%. We integrated Enel Energy into the holding, which will allow us to capture important synergies.

Normally, in a process of merger and management changes we experienced here at Brava, a turnaround process in the creation of a new culture takes some time and goes through different stages. Right at the start, as it happened between last August and September, we made the first changes to capture the most evident benefits of the merger between 3R and Enauta. A year after the start of our combined operations, already with a better understanding of the organization, processes, and people, it was time to make adjustments that would allow us to consolidate the culture and capture the benefits of the integration. That’s what we did by carrying out a restructuring that reduced the number of statutory officers from five to four and simplified the management structure. We eliminated one hierarchical level in the company, reducing the number of managers from over 90 to around 50.

This has made our decision-making processes more agile and efficient. After this date, we are now entering a period of cultural consolidation and enhancement. That’s what we will be focusing on from now on. In the next slide, we can see the continued growth in production, which reached record levels this quarter: 92,000 barrels per day, 80% of which are oil. I’ll now hand it over to Travassos and Boeri to discuss operations in more detail. Thank you, Tess. Good afternoon to all. I’ll talk a bit about the results of our main offshore assets, Atlanta and Papa-Terra. At Atlanta, during this third quarter, we saw an increase in production, mainly driven by the start of production of wells numbers two and three of Atlanta, but also by growth at Manati, as we can see in the chart on the screen.

As a reminder, Atlanta is an asset that has not yet completed a year of operation. It is indeed subject to some operating adjustments, both in the FPSO and in the subsea system, but it is an asset that has been performing very well. No major surprises. We expect that by year-end, these adjustments will be completed and we will begin cruising in Atlanta. Also, in Atlanta, we celebrated one year of activity in Brazil without any lost-time incidents. It was a moment of celebration for us since we do not separate good operating results from our safety results. This is a fundamental value for us here at Brava. On the next slide, I will return to Atlanta and talk a little about a topic that has raised some questions regarding Atlanta’s BSW. Before that, I will talk a little about Papa-Terra.

At Papa-Terra, we have maintained good operating results with record production in July. Actually, we just broke that record in October with average production exceeding 20,000 barrels at Papa-Terra. This is a significant milestone, the result of the progress we have been making in our integrity recovery campaign. We have been following inspection recommendations and re-inspecting cargo tanks. With good results from these inspections, we have recovered some of the platform’s original systems. As an example, we have the offloading system. For offloading, until now, we used to use an ancillary system. What is this ancillary system? We had a hose that floated next to the platform, which required us to maintain a boat, a vessel, holding the hose in place. This brought an operational cost and greater insecurity to this operation, greater unpredictability.

We recovered the system, and today offloading is done from the main system, which has reduced costs and increased the safety and efficiency of this operation. Very well. I’ll now move on to the next slide.

Interpreter: Speak a little about.

Tess Rodoni, CEO, Brava Energia: BSW at Atlanta. You can see that we have two graphs on the screen. The graph on the left has this line and some blue dots. What is that? This blue line represents our model, our BSW projection in the Atlanta field. And the blue dots, well, they represent what we do, the measurements and analysis we perform at the field. You can see that the model is very accurate. We can see that practically all the dots are on top of the line. This means that water production at Atlanta is exactly as we predicted it would be. There is nothing different. I’d like to remind you, although you are experts on this subject, that this treatment requires specific treatment. This information needs statistical treatment to validate any trend assessment.

I know that nowadays you use AI to do this, but it is important to be careful here because the timing of this analysis is very important so that you can then determine a trend. I really wanted to draw your attention to the graph on the right. I think this one is even more relevant to what I’m presenting here. The information on water produced or BSW reported to the agency, to ANP, which is the source of data that you use, that you have available, and therefore that you use, is based on operational meters. Our memorandum with ANP determines that the information will be passed on from these meters. Operational meters do not have the same calibration requirements as physical meters, for example. This introduces uncertainty or inaccuracy in the data that is available there.

This graph shows actual data on the difference between the water measured by these operational meters and on the red line well above the water the BSW result obtained from our analyses, which are carried out well by well. Then, so that you can have the correct information, in October, we began reporting the BSW data from our analysis to ANP. This will give you a more accurate picture of the value of water or BSW at Atlanta Field. Okay? These are the updates I have for you from the offshore operations. I am available for questions, and now I will hand over to Georges Boeri, Onshore Operations Officer. Thank you. Hi, good afternoon, everyone. In the third quarter, we achieved an average production of 35,000 barrels of oil equivalent daily. This is the highest production achieved in a quarter in our onshore operations.

Considering the moment we acquired all of our assets, which was in June 2023. This record mark is even more significant when we consider that we have not had any drilling rigs in our onshore operations since May and that we continue to reduce the number of workover rigs. We currently have only five workover rigs, four are performing abandonment tasks, and only one is performing OPEX. In addition to the five workover rigs, we have two more pulling rigs that mainly perform OPEX tasks. Delving deeper into production in the Bahia assets, we also achieved our record gas production in September as a result of operating improvements in our compression system and the good production results from wells drilled earlier in the year in the CX Field. In the last three months in Bahia, we have exceeded 1 million cubic meters per day produced.

In Rio Grande do Norte, the positive impact of steam generation, improvements in the performance of secondary recovery at Canto do Amaro, and increased gas production in Macau and Alto do Rodrigues were also fundamental to achieving production increases in a low CapEx scenario. We also continued with implementation of pilot projects of nitrogen foam injection in Fazenda Belém, Alto do Rodrigues, and Estreito Fields, which is leading to increased production. Although, as they are still in the pilot phase, they have not yet had a significant impact on results. Also, at the end of September, we started a secondary recovery project at Salina do Cristal Field, which is part of the Macau concession, where we expect to see an improvement in the field’s oil recovery factor. Speaking of steam generation, we continue to make progress on our project.

All nine generators, purchased in China and the United States, are already in Brazil. Five are already in operation, and another three are ready to start operating by year-end, with the remainder scheduled for 2027. It is important to highlight that most of the CapEx has already been completed. Another key point, fundamental point, is that, as I mentioned, we are increasing our gas production, which is an essential input for steam generation. This allows us to have full control over steam generation costs without depending on the market price of gas molecules. In practice, this is a hedge for our main cost in steam generation. We underwent an audit by ANP. The audit covered the operational safety management system at all our fields in Rio Grande do Norte and Ceará. Initially scheduled to last one week, the audit was extended by ANP for another week.

Due to the large number of facilities in these fields, it ended up being conducted from September 29th to October 10th. As a result of this audit, we decided to shut down some of our installations, representing approximately 20% of our production at these fields. Since taking over the operation of the fields, we have worked tirelessly to improve the safety and integrity of our facilities, which, due to the divestment process of the former operator, did not receive the necessary investment. Obviously, working with so many assets requires prioritization based on risk and production. That is why our most important assets, which account for 80% of production, were not shut down, because the improvement tasks had already been developed. Since the shutdown of the aforementioned facilities, we have increased the resources to resolve outstanding issues and resume 100% production by the end of the year.

The CapEx we are currently executing was originally planned for 2026, so it does not represent an increase in our total CapEx. It is simply a shift forward from 2026 to 2025. In terms of order of magnitude, this CapEx represents about 3% of the onshore CapEx. Now, I will not turn the floor to Tess. Thank you, Travassos and Boeri. Let’s take a look at the financial highlights. Revenue remains at a high level, reaching BRL 3 billion or $561 million. All of this is despite lower Brent and US dollar quotations compared to the beginning of the year. Also, the fact that we had a quarter in which bunker prices were under pressure affected our average selling price. Another highlight is that we entered the fourth quarter of 2025 with a high inventory position.

As we had a partial shutdown of the operations at the Potiguar cluster and we planned maintenance stoppages at Papa-Terra and BC-10, which will impact production this quarter, these inventories can partially offset the impact on production for the period. On the EBITDA slide, we see another record of $238 million. Margins grew to 42.5%. Even in a scenario of lower Brent prices, operating free cash flow improved both onshore and offshore, proves that the company is more efficient in operations and in CAPEX allocation. Partially onshore, we changed, particularly onshore, we changed our investment strategy and gained efficiency, you know, maintaining an attractive price even while reducing CAPEX. On the next slide, we see cost evolution. Improvement in production and efficiency is translated into a lower lifting cost, which this quarter reached $15.7 per barrel, including chartering costs.

The highlight was offshore, where costs were competitive and saw a sharp decline driven by Atlanta. In addition to the lifting cost, we also reduced G&A, which was below $3 per barrel. On the CapEx slide, we continue to see a downward trend, even with the start of Atlanta phase 2, which will lead to a significant increase in production starting in 2027. The main highlight here is the discipline in the onshore segment, which posted a 31% reduction. Now, the next slide is the most important of this presentation. We chose the strength of our capital structure and the evolution of our leverage. Our cash position remains very strong. Thanks to cash generation and higher EBITDA, the company was able to reduce net debt and significantly lower the leverage ratio.

This ratio is stood at 2.3 times, a much more comfortable level than the 3.4 times we had early in the year, showing that we are moving in the right direction. Now, this slide shows that our cash position provides a good degree of comfort given the extended amortization profile of our debt. As for cash flow, we see a solid operating cash flow. The highlight was Papa-Terra, which posted positive cash flow, reflecting the asset’s improved operating performance. We also posted lower CapEx and abandonment costs. Considering all other effects, we generated free cash flow that supported both deleveraging and net debt reduction. As for hedging, we have a healthy protection position that should help us navigate the next 12 months with more stability. We currently have about 15 million barrels hedged through NDFs and zero-cost collars following the policy detailed on the slide.

To wrap up the presentation, I would like to say that we will move through the fourth quarter of 2025 and into 2026. Focus on the main point of the slide, which is cash generation and deleveraging. To achieve that, we will continue prioritizing high safety standards and operating efficiency improvements. To conclude, I would like to thank the entire team. We only came this far thanks to everyone’s hard work. Now we’ll open the floor for questions. Thank you. We will now initiate the Q&A session for investors and analysts. In case you have questions, please use the Q&A icon located in the lower part of the screen and type in your question. For audio questions, click the Q&A icon, type in your name and company, or click on the raise hand button. Please hold while we collect the questions.

Our first question is from Vicente Falanga with Bradesco BBI. Sir, you may proceed. Good afternoon, everyone. Good afternoon, Décio and Brava’s team. First of all, I would like to thank the company for giving us very thorough information on BSW and for sending the correct data to ANP. For us, this transparency is very important. My two questions relate to that topic. Travassos, our understanding is that maybe this, you know, cut in water until, you know, to a certain point should be seen as something positive. Could you talk a little bit about that? What is the water cutting limit that is considered to be healthy? What can ensure in your reservoir models that BSW will evolve or whether there is any risk that the water will start isolating the oil and getting in the way of permeability?

Should we be concerned about that or not? My second question. In some previous conversations, I had the feeling that the choices as, you know, pump models had been probably, quote unquote, some peculiar choices. In addition to all of the explanations you gave me about BSW, maybe not. Maybe the choice of that particular pump has been assertive, giving the volume of liquids that you have to move. I just want to understand what that is the case and what is the volume of liquids that the pumps are absorbing today and up to what limit that volume could go up if necessary. Thank you, Vicente, for your question. Before sending that to Travassos, I think we chose a more agile presentation just to be more efficient. I would also like to say that Luis Carvalho will not be here on the other side because next time.

He will be here with us. For the time being, I’m here to, you know, make up for him. I will just ask you to shorten your presentations or your questions, to resume your questions to two, so we give more people the opportunity to ask questions. The choice of NPP was a correct choice. These are very efficient pumps, very robust. They allow us to see that we are working with, you know, state-of-the-art pumps, and the performance of the pumps has been very, very good. Atlanta’s phase 2, we did not choose the same pump because the wells are further apart. Since we already have the guarantee of three pumps and their overperformance, we chose a different solution. Now we’re seeing the good results coming from our choices.

Travassos, we will elaborate further. Thank you for your question, Vicente. In fact, your second question was already answered in terms of the NPPs. Speaking about water and the guarantee that at a certain point the water will not isolate the oil, this is the advantage of adopting an anticipated production system. For three and a half years, we worked, you know, with that just to be sure that we have an adequate model to distribute the water. This is a certainty we have, given all the information that we were able to collect from the anticipated model. You talk about emulsion. In fact, this is an important point. At a certain moment, we will break that with the increase in BSW. We break the emulsion.

On the contrary, we hope that there will be an improvement in the operating results since, you know, the pumps are freed. We will decrease the intensity of the pumps. This favors the production, given the fact the FPSO is more than prepared to deal with that produced water. Thank you for the comment. We will be adjusting it. I mean, data from October are already up to date in terms of the water produced. You will see that the BSW is much lower than the one that was reported through the meters. Once again, thank you for your question. Thank you. A próxima pergunta vem de Milene Carvalho. Next question from Milene Carvalho with JPMorgan. Ms. Carvalho, go ahead. Hello, everyone. Good afternoon. Thank you for taking my question.

Congratulations on solid results in terms of delivering cash generation and consistent production. My first question has to do with Papa-Terra. You’re advancing with the licensing of Wells 52 and 53. I would like to understand what is the expectation of contribution until the end of the year. I would like to understand the contribution and timing of this project. My second question is about Jubarte. We saw Pedro Braz announcing negotiation, and I would like to understand how the negotiation is advancing on your side. Thank you. Let me answer about Jubarte, and then Travassos will speak about Papa-Terra. The BC-10 operator Shell, and they are the ones conducting negotiations with Pedro Braz. Conversations are ongoing to define compensation for or reparation for the best production in the unitization agreement. We haven’t got any definition of when this will be concluded. And for Travassos.

Papa-Terra, can you comment on that? To speak about Papa-Terra, and taking the opportunity to speak about the campaign there, we have planned a drilling campaign that is absolutely in keeping with the plan. We received approval to clean the rig. The rig is scheduled to be mobilized now in the second half of December. It is aligned with the SPDIN. SPDIN is the start of drilling in the first half of February. As regards the expected production, it should start in the second half of 2026. This is what we are expecting with those two wells. I would like to remind you that with this integrated campaign, we drill and complete the two Papa-Terra wells, and then we move to Atlanta. Travassos, just to understand, what is the expected production from each well by the end of 2026? Milene.

I did not answer your question on purpose because we want to avoid giving you a guidance, and that’s why I didn’t say it. What I can say is that all is in line with the expectation, and we should be starting production in the second half of 2026. Okay, thank you very much. Next question from Passo Vasconcelos with UBS. Mr. Vasconcelos, go ahead. Your microphone is enabled. Good afternoon, Décio and the other officers. Thank you for taking my question. I have two, Décio. My first question is about dividends. The current company policy is 25% payout of net income. And based on net income with no adjustments that you presented this year, this would give us something close to BRL 500 million that could be announced. I understand that this can still undergo some adjustment. This amount is not written in stone.

But my question, Décio, is perhaps that the company could think about adjusting this policy so that you could have more flexibility in capital allocation. Or whether you understand that this is the moment to start thinking about some kind of more robust distribution of dividends to shareholders. The second question, Décio, your opinion, your view of the company looking forward after these recent changes. In the management reorganization of the positions. Do you expect any adjustment in the strategy or positioning of the company looking forward? These are my two questions. Thank you. Thank you, Travassos. All right, our strategy does not change. Our focus is to deleverage the company. 2026 is a year where we have committed CapEx with the four wells that we will be drilling. Two in Atlanta and two in Papa-Terra. There will be a significant reduction in CapEx in 2027.

The situation will be a lot more comfortable in terms of cash generation. As regards to dividends, this is a discussion that really depends on the board of directors and on the shareholders’ meeting. Eventually, this will be debated. The strategy, like I said, does not change. We are working to generate cash to deleverage the company. In 2027, we are going to have a company with a more robust position, a stronger cash generation. Then we will be more prepared to discuss dividend payout and share buyback, capital allocation, and all of these themes. Over Q4 and 2026, our focus will be in cash generation, deleveraging the company, and a successful execution of the four wells at Atlanta and Papa-Terra, and the operation of our current assets. Beleza, está entendido. Obrigado. Thank you. Understood. Thank you. Our next question from Gabriel Bravo with Citi.

You may proceed, sir. Olá, pessoal. Hello. Obrigado por. Décio and team, thank you for taking my questions. I have two questions. I think my first question is I would like to hear from you something related to oil discount this quarter, which I think it was slightly higher than last quarter. I do not know whether this was a one-off situation. If you can tell me a little bit more about the commercial strategy of the company and what would we expect in terms of discount going forward in terms of, you know, trading price. The second question on dividends. As you just said during your presentation, the company is deleveraging at the moment, which was already expected. Looking at the company’s strategy today, I think the trend is to continue on this track. How fast do you think this avenue will be?

Also looking at hedging going forward, what should we expect in terms of deleveraging pace until next year? Just so I can fit into this debate about dividends. This will be the first step before we get into the subject of dividends. I think these are my points. Thank you. Obrigado. Thank you. Thank you, Gabriel. Desconto. On the discount note, we have, you know, sales agreement, especially with Atlanta, and so they are referenced to the banking in Singapore. What we’ve noticed in recent times was a whole set of factors that affected the banker price in Singapore. What factors am I referring to? Bombing of Russian refineries that increased the offer of fuel oil, and there was a large refinery in Nigeria that had problems producing diesel, and they are producing more fuel oil. This.

Oil thing, or what happened. In the sea, also contributed to that. It was a whole set of measures that brought prices down. As we see in previous quarters, that was a set of measures that helped the bunker price. We did not sell at a premium the same oil. This is a market condition. We think that with time, things will get back to normal. In terms of dividends and the speed of leverage, deleveraging, the strategy does not change. I already mentioned that. We will continue. We will continue to focus on deleveraging and efficiency and operating delivery in all of our operations. The level of deleveraging or the speed of this deleveraging will certainly depend on the price of oil in, you know, throughout the years. It will not be a major deleveraging due to the CapEx that is scheduled for 2026.

2027 certainly will be very different. Super claro, pessoal. Very clear. Thank you very much. Our next question is from Bruno Amorim with Goldman Sachs. Your microphone is already on. Good afternoon, and thank you for taking my question. I know that you will not give any production guidance, but if you could tell me in quantitative terms the trajectory of our production going forward, does it make sense to believe that there will be a short-term gain of the wells that are yet to be connected in the short term? Maybe from then until the end of next year, we will see stable production or maybe slightly lower once you start delivering the new drilling campaigns more towards the end of next year. Does it make sense for me to think about the curve going that way?

Before I give the floor to Travassos, we hope to see some recovery in our production coming now in the next few weeks until the end of the year. Throughout next year, we do not see any new event regarding increased production. We will work with the current infrastructure. There might be a decline in production through time, but by the end of next year, we will start operating the Papa-Terra and then Atlanta wells, and then we will see an increment in production, but that will be by the end of 2026 and early 2027. Now, Travassos, I think you already answered the question, but in fact, we have the Atlanta system. That is a system that is getting into the end of the offshore decommissioning through 2025. We hope that by the end of the year, that will be concluded.

We hope that there will be a small production gain in 2026. What is more relevant is when we see the two Papa-Terra wells in operation, which we anticipate will happen in the second half of the year, and that is when we will see a spike in production. I would also like to say one more thing. At the end of 2024, I mean, at the very end, we started with two wells in Atlanta, and it was really surprising to see our operating performance of a vessel that was producing at high efficiency at the beginning. That was surprising, but now we are beginning to work with more equipment and with more, you know, load, heat, and energy, and this is much better for us in terms of the vessel that I just mentioned. Can I just have a follow-up question, please? É uma pergunta diferente.

It’s a different question, maybe on a different note. Se o petróleo for para baixo de. If oil prices go below $60 next year, how would the company react? Can you comment on your CapEx flexibility? I mean, you made several deliveries that really improved the break-even of the company. I just want to understand how you would react in case oil prices go below $60. I mean, the reaction mechanisms are very well known. We will seek for further efficiency, both, you know, administrative and operational, and we have to reduce costs and reduce whatever else we can in terms of expenses. Our intent is, you know, we do not want to spend the cash. Okay, thank you. Nossa próxima pergunta vem de Rodrigo Almeida. Next question from Rodrigo Almeida. Mr. Almeida, go ahead. O seu microfone deveria, não é possível liberá-lo, Rodrigo.

For some reason, we cannot enable your mic. Please leave and rejoin the conference call. Next question. O senhor Thiago Casqueiro. From Thiago Casqueiro with Morgan Stanley. Mr. Casqueiro, go ahead. Your microphone is enabled. Good afternoon, Décio, Boeri, and Travassos. Thank you for taking my questions. I’d like to go back to Atlanta. I understand that this production increase, we should start seeing more in 2026 after the final operating adjustments in the asset. Would it make sense to think November and December reversing the drop that we saw both in October and in September? Is this production increase only in 2026, and in November and December, we should see still the asset declining a bit? That’s the first. Second question to Boeri: Perhaps you could give us more color on these initiatives or the pilot projects.

Have you found any obstacles, any hurdles that you had not mapped? I just would like to see whether there were some lessons learned. Let’s start with Travassos and then Boeri and Thiago. Sim, a gente tem uma expectativa. Yes, we do have an expectation, Thiago, that in November and December, we should see some kind of recovery given the final phase of commissioning that I mentioned. To delving into this a little bit, today we are increasing our heat capacity at the plant, which will allow us to process a little bit more oil. This should increase production. Releasing the NPPs, the pumps. Right now, we are making some adjustments in the primary separation system, and this should be resolved soon. This will bring production back up a little compared to what we had presented. Good afternoon, Thiago. Thank you for the question.

Speaking a little about EOR. We finished the execution in Fazenda Belém, Estreito, Alto do Rodrigues, with good results in all fields. That’s where we have some history for Fazenda Belém, but the results were positive in all three cases. So much so that we signed a contract of one year with our technology supplier to develop a more integral phase in one of the fields. The EOR, the nitrogen foam project, is running well. To speak about the other EOR, which is polymer injection, we are at a final phase to come to an agreement with our main technology supplier. We have done three injectors, and we still have to do one fourth injector. We believe that in the beginning of next year, we should be injecting polymer in Salina do Cristal.

I also said in the beginning that in Salina do Cristal, we started a project to develop water injection. So Salina do Cristal, I think that next year we should see a production increase based on water flooding. And polymer injection. Both will happen at Salina do Cristal. Perfect. Thank you very much. Nossa próxima pergunta. Next question from Rodrigo Almeida. Mr. Almeida, your mic is enabled. Boa tarde, Décio. Good afternoon, Décio, folks. Talvez voltar no ponto ali do FPSO Atlanta. I would like to go back to FPSO Atlanta. We see that the platform is still in a commissioning phase. So a direct question. When do you expect you will end the commissioning of this platform? Perhaps that is a moment where we will have more confidence in the stability of production.

If you could give us an idea of the timing of when you will be able to finalize all of these adjustments, it would be helpful. E a segunda pergunta aqui é. My second question is related to NTE. Share when you start the drilling. I think that very soon in December, January, you should start the work. I would like to see the share of NTE. And this new well still be drilled. I imagine that they are not going to take part in the CapEx for this project. These are my two questions. Thank you, Rodrigo. I’ll start with the second question, and then Travassos will speak about Atlanta. NTE, we are in the arbitration process. I cannot give you much about that. The mechanics of how it works is, during this period, revenue of oil sales goes to an account, and that account.

Will use the resources to pay their part in the consortium. In the last quarter, given the improvement of results in Papa-Terra, the account was positive. Over next year, with the increase in CapEx, our expectation is that the account will be negative again. As we make the investments. Travassos, you can answer about Atlanta. Question about the performance of Atlanta. I think it’s worthwhile underscoring, Rodrigo, that the performance of Atlanta over the year was very good. It was very positive. It remained above 90% operating efficiency for a unit that is just starting to operate. As Décio mentioned. As I mentioned before, we will increase the volume of production, and we will demand more equipment. The equipment will start operating, and mainly my thermal demand will increase: more oil, more need for heat, heavy oil. There is an important milestone: commissioning one specific.

Top side piece of equipment, a tech boiler, that we are finalizing the commissioning for in December. With this, my heat capacity at the plant will be full. Only then will I be able to produce at maximum capacity that the wells, that the reservoir, and that the elevation system allows. November is a good thermometer for us to be increasing our production capacity to reach the maximum level at Atlanta. All right, thank you very much. Nossa próxima pergunta. Our next question is from Conrado Wegner with Safra. Your microphone is on. You may proceed. Good afternoon, Décio, Travassos, and Boeri. I just have a follow-up question related to, you know, secondary recovery, and you talk about onshore. How can we see CapEx for onshore going forward? First of all.

According to what you’ve said in previous occasions, I would just like to confirm if the initiatives of secondary recovery do not imply additional CapEx and everything would just fall into the OpEx account and whether the level we noticed this quarter for onshore CapEx is what we should expect going forward, or you still believe that there are further reductions to be made with the reduction of the number of rigs? For next year, we planned a significantly lower CapEx for onshore because we do not need to drill any more development wells, but an exploratory well. We have good expectations. There will be no activities, and the year will have a low amount of work over rigs because we already bought everything we needed in terms of foam. Additional CapEx will be dedicated to some work over.

Activity, things that have to do with the integrity and legal compliance, and some investment may be in an EOR. There are two types of EOR. Everything that has nitrogen does not require CapEx, just OpEx. EOR refers to everything that refers to polymers or water flooding. There is some CapEx that will allow us to make conversions in injection wells. This is part of the workover campaign that we have planned for the year. This is certainly a year of low CapEx for onshore, and we will be working in the integrity for both onshore and mid-downstream because now I’m also in charge of that area of the company. I would just like to remind you that EOR is enhanced oil recovery. Thank you for the explanation. Nossa próxima pergunta. Our next question is from Nicolas Barros with Bank of America. Mr.

Barros, your microphone is on. Good afternoon. My question is on capital allocation. I think more recently you prepay receivables. You also manage your liabilities with Reconcafo, and this is very clear in terms of your intention to deleverage the company. Is this really through cash generation or EBITDA expansion, or is there any other lever that helps with that, or any other more relevant investment that could be, you know, considered? As you said it quite well, this is our focus. It’s our obligation to review the portfolio to see if there is any further opportunity to review our position, and this is what we do on a regular basis. At the end of the year, we will approve the year’s budget. This is the time of the year when we review the portfolio.

If there is anything that makes sense, of course, we will be open to further analysis. Thank you. Thank you. Nossa próxima pergunta vem de Régis Cardoso. Next question from Régis Cardoso with XP. Mr. Cardoso, go ahead. Boa tarde, Décio Travassos. Good afternoon, Décio Travassos and Boeri. Thank you for the results, the presentation. Good to see the company generating cash, deleveraging, with high production. I’d like to go back to CapEx, in particular in Atlanta phase two. What drew my attention was that you brought things forward. Could you comment on the phases of phase two of Atlanta, both in terms of disbursements and activities? I do not know whether you can quantify what we should expect in terms of CapEx for Q4 2026. You kind of talked about it qualitatively. I do not know whether you can give us more to base our models on.

Expectations of cash generation. Thank you, Régis. We do not give a CapEx guidance. I will ask Travassos to give you some numbers regarding the integrated campaign. Before that, I would like to comment on something interesting. We are only able to have this campaign in Atlanta and Papa-Terra and bring forward this production increase because we prepared for that during Atlanta phase one. We used a lot of what we had prepared for Atlanta phase one to be engaged in Atlanta phase two. Still at Enauta, the alternative we had was to do Atlanta together with Oliva. With the merger, it became a lot clearer to us that it was better, much better, to drill the wells at Papa-Terra, not in Oliva. That is the only reason why we are running this campaign now.

If we had to start from scratch in 2025, with the start of production of first oil of FPSO Atlanta, we would never have production in 2026-2027. This was a good move on our part. That will create a lot of value in the future for our shareholders. Although we do have the disbursement of CapEx along 2026, and Travassos can give you more numbers about the campaign. Régis, let me try to give you some more information for you, but not giving you a guidance. As Décio mentioned, we do not provide a CapEx guidance. In your question, you said the numbers were brought forward. Why is this happening? At the approval of the FID of these projects, we adopted an early engagement strategy. In other words, early engagement of the companies so that when we approve the FID.

We left one room, got into another room, and signed these contracts. These contracts, in the past, had some uncertainty. Back then, we were uncertain about the approval of IBAMA regarding license for Papa-Terra. We adopted a flexible strategy. In other words, I had the possibility of starting with Papa-Terra or starting with Atlanta. That also favored the payment of Atlanta. This allowed what we are doing at Atlanta. This will be done primarily over 2026. Over 2026, we’re going to have a relevant disbursement. In 2025, we had, in addition to the payments associated with the milestones in the projects, a deal star mobilization expected for the second half of December. A good part of the CapEx will be in 2026. To give you an overview of the project.

The purpose of Atlanta, what will happen in 2026, Christmas tree of Atlanta. It will be in the first half of 2026. Christmas tree of Papa-Terra. The Christmas tree is ready. The refurbishment we did, the Christmas tree is already. Lines, first half of 2026, umbilicals around the end of the first half of 2026. That is why you have this perception of a CapEx that was brought forward. That is a protection for the project. This makes us be totally in line with the campaign. Thank you for the question, Régis. Obrigado. A sessão de perguntas. Thank you. The question and answer session is closed. I would like to turn the floor to Mr. Oddone for his final statement. Mr. Oddone, go ahead. Again, thank you all for participating in Enauta. This was another good quarter. We will continue to deleverage the company in Q4 2025.

Although we had these shutdowns of production at Papa-Terra and BC-10. Supply production of production at Atlanta and Potiguar. But we continue to deleverage the company. For 2026, we’ll start with a better level of leverage than in 2025. So we don’t expect such a huge deleveraging because. We have this CapEx campaign, which will be high. Along 2026. We spoke about this. But again, this is growth CapEx. It’s CapEx for projects with high profitability. Once implemented, we are going to be. We’re going to be seeing favorable results for the company. So again, thank you for joining us, and I’ll see you next time. Obrigado. A conferência está encerrada. Thank you. Brava Energia’s conference call is ended. Thank you very much for participating and have an excellent day.

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