PetroRio recorded positive indicators in the first quarter, such as the increase in production and reserves and an Adjusted EBITDA of R$ 238.9 million - almost 12x above the R$ 20.2 million obtained in the same period of 2019. Net profit in the period was R$ 44.5 million, despite the drop in oil prices and amid Covid-19.

The adjustment in EBDITA was due to the company's strategy of entering into hedge contracts (protection against price fluctuations), with the objective of facing the low price period, maintaining its effective oil sales at US $ 65 per barrel - at a much higher price. to the current range of $ 30 a barrel.

These contracts generated R$ 206.6 million in gains for the Company in the first three months of 2020. Focused on prudent financial management, PetroRio hedged part of its second quarter sales, also at a price of US $ 65 o barrel.

"PetroRio's business model was designed to ensure the Company resilience in periods of uncertainty and volatility, since its implementation in 2015. With it, we are able to go through both moments of strong expansion, as well as more challenging moments, such as we found today ", highlighted Roberto Monteiro, PetroRio's CEO.

The executive also highlights the measures adopted to face the crisis generated by the Covid-19 pandemic, such as cost rationalization, renegotiation with suppliers, postponement of some investments, reduction of directors' salaries by 50% and 25% of onshore employees.

"We maintained essential activities and reduced the number of people on board to ensure the greatest possible protection and safety for our employees and service providers in the operational area, with team testing and reinforcement of protective equipment and sanitary measures".

The measures adopted, especially the hedge operation, guaranteed the preservation of the company's cash, which ended March at US $ 127 million.

Production and reserves 

As the main operational highlight of the quarter, the Company's total production grew 102% in comparison with the first quarter of 2020, reaching 23.4 thousand barrels / day. The expansion reflects especially the incorporation of 70% of the Frade field, whose production has grown since the acquisition by PetroRio, of the 30% increase in the Polvo field, after the successful drilling campaign ended in the first quarter .

With the largest scale of production and gains in operational and administrative synergy, PetroRio's lifiting cost fell 44% compared to the first quarter of 2019 - to $ 17.3 dollars per barrel.

The company's lifiting cost tends to fall even further after the permission to interconnect the Polvo and Tubarão Martelo fields - under evaluation by the ANP. In February 2020, PertroRio announced the acquisition of FPSO OSX3 and 80% of the Tubarão Martelo field, for US $ 140 million. The combined costs of this new production hub are expected to be reduced from the current US $ 200 million to less than US $ 80 million per year, after the planned synergies have been implemented.

With the acquisition of the remaining 30% of Frade (in approval by the ANP) and the incorporation of Tubarão Martelo, PetroRio's 2P reserves (proven, probable and possible) should reach 190.8 million barrels, which allows production at least another 25 years. This is a significant increase compared to the 24 million barrels in December 2018. The company's reserves have recently been certified again.

"Despite these achievements, the global epidemic of COVID-19 and the consequent reduction in demand for oil, created a very challenging global environment. Health, safety and efficiency were the pillars of our response to this new scenario, maintaining our discipline strategy and operational excellence ", highlights Roberto Monteiro.