RECV3 PetroReconcavo

PetroReconcavo S.A. is an independent oil and natural gas exploration and production operator, with an exclusive focus on mature onshore fields in Brazil. Incorporated on July 21, 1999 as a corporation, the company 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 pioneers among private onshore operators in the country after the end of the state monopoly under the 1997 Petroleum Law, specializing in the recovery and revitalization of mature oil and gas fields.

PetroReconcavo’s history is directly linked to the opening process of the oil and gas sector in Brazil and the divestment of Petrobras’s onshore assets. In 2000, the company entered into a production contract with Petrobras that enabled it to operate 12 mature fields in the Recôncavo Basin. Throughout the 2000s, it took part in bid rounds held by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), acquiring onshore exploration 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 the acquisition contracts for the Miranga and Remanso Clusters, all originally operated by Petrobras. In 2021, in addition to the IPO on B3, PetroReconcavo effectively took over the 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 derived 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, using 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 higher than annual production in the same period, which indicates ongoing replenishment of recoverable volumes in its fields.

Operationally, PetroReconcavo is active in all stages of the onshore E&P cycle, from exploration to production. In the exploration phase, the company takes part in ANP auctions, acquires onshore blocks and carries out geological and geophysical studies, seismic data acquisition and drilling of exploratory wells, fulfilling 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 phase, the company uses its own onshore rigs for drilling, completion and workovers, as well as flowlines, gathering stations, storage tanks, gas compressors and treatment units, aiming to operate the fields for decades, within the technical and economic limits of the reserves.

PetroReconcavo’s strategy includes strong verticalization of field services, with the acquisition of equipment and insourcing 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 is intended 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 major 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 the producing fields, it holds onshore exploration blocks acquired in cycles of ANP’s Permanent Offer, such as areas in the Potiguar Basin, reinforcing its organic growth potential. 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 gas treatment and processing units, such as the São Roque Natural Gas Treatment Unit, authorized to operate by the ANP in 2024, and UPGN projects at its clusters.

PetroReconcavo’s customer base is concentrated among major players in the energy sector. In 2024, three buyers individually accounted for more than 10% of net revenue: Brava Energia, Petrobras and Companhia de Gás da Bahia (Bahiagás). Revenue is essentially generated from the sale of oil and natural gas produced in fields under the company’s concessions, with deliveries made via oil pipelines, gas pipelines or, in some cases, by road transportation. In the natural gas segment, the contract structure with state distributors and industrial partners is aligned with the regulatory context seeking to increase competition in the Brazilian gas market, in line with the opening up 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 Petroleum 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 contracts cover the exploration and production phases, with obligations related to minimum investments, fulfillment of exploratory programs, environmental licensing, payment of royalties and special participation, as well as technical and operational safety requirements. ANP conducts the bid rounds and Permanent Offer cycles that define the onshore areas where the company operates, while agencies such as Ibama and state environmental entities take part in the analysis and issuance of environmental licenses, which are particularly relevant for operations in mature fields.

On the social and environmental front, PetroReconcavo develops initiatives focused on communities located around its operations, especially in the countryside of 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 of 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 consistent 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.