Analysts anticipate a positive first quarter in 2024 for junior oil companies, despite ongoing volatility.
The rising price of Brent crude oil, spurred by escalating Middle East conflicts, has buoyed the sector’s performance.
PRIO (PRIO3), 3R Petroleum (RRRP3), and PetroRecôncavo (RECV3) will release financial results soon, offering a snapshot of this volatile yet promising environment.
PRIO is the first to report its numbers, with analysts predicting steady results. Bradesco BBI notes that although oil prices remain high.
PRIO’s first-quarter daily production of 88.3 thousand barrels of oil equivalent (boe) fell short of the 100.3 thousand boe achieved in the previous quarter.
Temporary equipment failures at the Frade and Albacora Leste fields increased extraction costs and hampered output.
Meanwhile, 3R Petroleum is poised for sequential stability, though analysts expect EBITDA to dip slightly due to a 3% production decline to 51.5 thousand boe.
Enhanced midstream and downstream operations should offset this decrease.
Santander acknowledges that 3R’s maintenance and well-intervention efforts at Papa Terra are key, while Potiguar and Recôncavo fields should also see improvements.
PetroRecôncavo is likely to report stronger results than the previous quarter.
Santander predicts a 40% increase in EBITDA due to maintenance completion at UPGN Guamaré and the Clara Camarão Refinery.
The company’s average production increased to 26.38 thousand boed in Q1 2024 from 25.4 thousand boe in Q4 2023.
Enhanced drilling and well reactivation are expected to reduce extraction costs, increase free cash flow, and drive future growth.
However, XP remains cautious, citing operational interruptions in Rio Grande do Norte and heavy rainfall in February and March.
Despite challenges, analysts remain optimistic about these junior oils, noting their resilience and strategic efforts to thrive amid geopolitical uncertainties.