RECV3

PetroReconcavo S.A. is an independent oil and natural gas exploration and production operator focused exclusively on mature onshore fields in Brazil. Incorporated on July 21, 1999 as a joint stock company, the company has built its track record in Brazilian sedimentary basins starting with the Recôncavo Basin, in Bahia, and the Potiguar Basin, in Rio Grande do Norte. PetroReconcavo’s common shares are traded on B3 under the ticker RECV3 and have been listed on the Novo Mercado segment since May 2021. The company positions itself as one of the pioneering private onshore operators in the country after the end of the state monopoly with the 1997 Oil Law, specializing in the recovery and revitalization of mature oil and gas fields.

PetroReconcavo’s history is directly linked to the opening of the oil and gas sector in Brazil and Petrobras’s divestment of onshore assets. In 2000, the company entered into a production contract with Petrobras that allowed it to operate 12 mature fields in the Recôncavo Basin. Throughout the 2000s, it took part in bidding rounds held by the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP), acquiring onshore exploratory blocks in which it developed, among others, the fields that make up the BTREC Cluster. Starting in 2019, it gained scale with the acquisition of the Riacho da Forquilha Cluster in the Potiguar Basin, followed by the signing of acquisition contracts for the Miranga and Remanso Clusters, all originally operated by Petrobras. In 2021, in addition to its IPO on B3, PetroReconcavo effectively assumed operations of the Miranga and Remanso Clusters in Bahia, consolidating the company’s onshore asset base.

PetroReconcavo’s business model is centered on oil and natural gas exploration and production (E&P), with 100% of net revenue coming from this activity. The company seeks to acquire concessions for mature onshore fields and operate these assets with a focus on cost efficiency, increasing reservoir recovery factors, and extending productive life. This model combines the rehabilitation of declining fields, through secondary recovery techniques and operational optimization, with the organic development of new proved reserves in areas already in production. The asset portfolio generated gross 2P reserves (proved plus probable) of 183.8 million barrels of oil equivalent at the end of 2024, certified by an independent consulting firm, with a reserve replacement ratio above annual production in the same period, indicating continuous replenishment of recoverable volumes in its fields.

Operationally, PetroReconcavo works across all stages of the onshore E&P cycle, from exploration to production. In the exploration phase, the company participates in ANP auctions, acquires onshore blocks, and carries out geological and geophysical studies, seismic data acquisition, and drilling of exploratory wells, complying with the Minimum Exploratory Programs defined in the contracts. Once the economic and financial feasibility of a discovery is confirmed, it prepares production development plans for ANP approval, detailing the number and location of wells, pipeline network, surface facilities, and required infrastructure. In the development and production stage, the company uses its own onshore rigs for drilling, completion, and workovers, flowlines, gathering stations, storage tanks, gas compressors, and treatment units, seeking to operate the fields for decades within the technical and economic limits of the reserves.

PetroReconcavo’s strategy includes strong vertical integration of field services, with the acquisition of equipment and in-house execution of activities traditionally outsourced, such as operation and maintenance of production and drilling rigs, service units for well acidizing and stimulation, conventional hydraulic fracturing, pipe inspection, and pump maintenance. This verticalization aims to reduce operating costs, increase equipment availability, and provide greater control over the pace of field development. In parallel, the company has been implementing digital transformation initiatives, with telecommunications and automation infrastructure applied to real-time monitoring of wells and facilities, telemetry, pressure and flow control, and support for operational decision-making. At the end of 2024, the company had more than 1,700 employees, reflecting the operational complexity and labor-intensive nature of its specialized onshore activities.

PetroReconcavo concentrates its operations in three key Brazilian onshore basins: Recôncavo (Bahia), Potiguar (Rio Grande do Norte) and, as of 2023, Sergipe, following the completion of the acquisition of Maha Energy Brasil. In addition to producing fields, it holds onshore exploratory blocks acquired in ANP’s Permanent Offer cycles, such as areas in the Potiguar Basin, reinforcing its potential for organic growth. In natural gas, the company has been expanding its presence in the so-called “new gas market,” investing in transportation and processing infrastructure, either by contracting services under tolling arrangements or through its own treatment and processing units, such as the São Roque Natural Gas Treatment Unit, authorized to operate by the ANP in 2024, and gas processing unit (UPGN) projects at its clusters.

PetroReconcavo’s customer base is concentrated among major energy sector players. In 2024, three buyers each accounted for more than 10% of net revenue: Brava Energia, Petrobras, and Companhia de Gás da Bahia (Bahiagás). Revenue is generated essentially from the sale of oil and natural gas produced in the company’s concession fields, with deliveries made via oil pipelines, gas pipelines or, in some cases, by truck. In the natural gas segment, the contract structure with state distribution companies and industrial partners is aligned with the regulatory environment that seeks to increase competition in the Brazilian gas market, in line with the opening of transportation and processing infrastructure.

PetroReconcavo operates in a highly regulated environment. The company operates under the E&P concession regime established by the Federal Constitution and the Oil Law, which confirm the Federal Government’s monopoly over oil and gas resources and assign ANP the role of regulating, auctioning, and supervising exploration and production. Its concession agreements cover the exploration and production phases, with obligations related to minimum investments, fulfillment of exploratory programs, environmental licensing, payment of royalties and special participation, in addition to technical and operational safety requirements. ANP conducts the bidding rounds and Permanent Offer cycles that define the onshore areas where the company operates, while agencies such as Ibama and state environmental entities are involved in analyzing and issuing environmental licenses, which are particularly relevant for operations in mature fields.

On the social and environmental front, PetroReconcavo develops initiatives targeting communities located around its operations, especially in inland Bahia. In 2014, in partnership with AVSI Brasil, the company launched the Ciranda Viva Recôncavo social project, working in communities in the municipality of Catu with a focus on sustainable development, cultural appreciation, and strengthening local identity. The company also invests in operational safety, risk monitoring, and continuous process improvement, seeking to mitigate the environmental impacts inherent to onshore oil and gas exploration and production. In governance, its listing on B3’s Novo Mercado, with RECV3 shares, reflects the adoption of corporate practices aligned with transparency standards, a capital structure composed of common shares, and the presence of a board of directors responsible for strategic decisions, including asset acquisitions, corporate reorganizations, and debenture issuances to finance its asset base and expansion projects.