Presentation and comments on results will be presented by Roberto Monteiro, CEO, Milton Rangel, CFO, and Francilmar Fernandes , COO. They will present the governance results and will then be available during the Q&A. At this time, all participants are in listen only mode. To ask questions live, you can use the Raise Hand feature and all written questions in the Q&A button. Both icons are found on the bottom bar of your Zoom screen. This event will be recorded and will be available on Prio's Investor Relations website. Before proceeding, let me mention that forward-looking statements that may be made during this conference call related to the company's business prospects, projections, and operating and financial goals are based on the beliefs and assumptions of Prio's management and on information currently available to the company. Forward-looking statements are not a guarantee of performance.
They involve risks, uncertainties, and assumptions as they relate to future events or future circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors can also affect the future results of PetroRio and could cause results to differ materially from those expressed in such forward-looking statements. Now I will start the presentation with Roberto Monteiro, our CEO.
Good day, everyone. It is a huge pleasure to be back for another conference call to discuss Q1 2023 earnings results. I would like to start thanking all of the investors who joined us and the PetroRio employees who are also our investors and joining us on this call. I want to thank you for another quarter that was very strong. I would say undoubtedly one of the best quarters in the history of the company.
I will speak to you about the numbers, and then we'll speak about what's behind these numbers, which in my opinion, is more important than the numbers themselves. We had a revenue of $310 million. Very strong, almost the same as last quarter, but with a much lower volume sold compared to the last quarter. Of course, the Brent, the oil reference price helped us a lot. We recorded a net income of $228 million, a high record number, and an EBITDA of $289 million, another record. In this quarter, our EBITDA was higher than the previous quarter EBITDA, which had been already the highest ever posted by the company. This results from two factors.
First, the sales price, which has been at historical highs, partly because of COVID, which is the reason for the variation, and partly because of the war in Ukraine, which is a terrible reason, but that also has an effect on price. That's one factor. The second factor is right below the lifting cost, which is the lifting cost of $11.2 per barrel, the lowest ever recorded in the history of the company, a reduction of around 6% compared to the lifting cost of the previous quarter. We continue the trend even in a quarter in which the foreign exchange played against the lifting cost. We were able to reduce the lifting cost by 6% from $11.8 in the previous quarter to $11.2 in this quarter.
This has a direct link with the high operating efficiency we have at the company at Frade, and Francilmar Fernandes will speak more about this and direct operating efficiency. PetroRio was a little bit tenuous without access to Frade, TBMT, and Polvo achieved operating stability and very high operating efficiency. Operationally speaking, this quarter was fairly strong for the company with very good results. Now getting to the last two items that makes us also very proud. It may not be operational at this point, but very important for the company. First is the signing of Albacora Leste in April. Q1 was perhaps the heaviest quarter in terms of negotiations, contracts, etcetera, which hit its highest point on April 28th, the signing of Albacora Leste field. That practically doubles the size of the company in terms of production, reserves, etcetera.
We spoke a lot about this field in the release at the time of the signing and we started drilling at Frade. We got the license, the drill granted by IBAMA, the Brazilian environmental agency, and we started drilling at Frade field and the revitalization of Frade that had stopped since the time of Chevron. We were able to reverse all issues related to environmental license for the field and so on and so forth, and we finally started drilling. I'll now go to the next slide. Here to give you a little more color with charts very much related to what I had explained. The first and most important one is our lifting cost, is the company's strategy to cope with oil price volatility.
To keep the lifting cost low in a scenario where the oil price is over $100 per barrel is obviously going to yield very high margins, which is huge. An EBITDA margin that was also a record margin for the company. It's all because of that, the lifting cost that is totally under control. Our production was very strong, 35,000 barrels daily, over 35,000 barrels of oil equivalent daily in Q1, reflecting our operating stability. Our cash position increased to $1.95 billion. A little before the signing of Albacora, our cash position was $1.4 billion. That results from cash generation and also from some loans that we took on with local banks with 2 or 3 years duration. Milton will speak more about that at very interesting and competitive costs.
That was the preparation for these acquisitions. That's why when we speak about Albacora and Albacora Leste, this is an asset which is fully funded. We don't have to make any additional effort from the financial standpoint to go through with this acquisition, to complete the acquisition in the speed of the closing, etcetera. All of that with a net debt, which is very much under control. In the bottom right-hand corner, we see our net debt over EBITDA ratio, and we are not a net cash company. We're not even a net cash company because the ratio is at -0.5. The company is very well prepared to continue to grow. I will turn to Francisco, and then I'll be back to speak about ESG and the next steps that the company will take. Francisco, over to you.
Hello, everyone. Thank you, Roberto.
I will start on slide number 5 with operational timelines and details. Q1 2022, I should say, was exceptional quarter, the best operating quarter in the history of the company, especially improvement in the Brent oil price, which is not under our control. As far as we're concerned, I mean, production and operating efficiency leads to very good results across the board. Here we see that in terms of production comparatively, all assets performed very well. All fields, including those which are not operated by us, maintained a good performance overall and that contributed to improve the lifting cost. Moving on to slide number 6 to discuss these numbers in more detail. As always, we have a chart about the lifting cost and its evolution, which hit a record low number of $11.2. We continue on our path of continuous improvement.
We continue the quest for even better numbers. This quarter, we completed the commissioning or the installation of a gas energy generation unit from the FPSO Bravo into Tubarão Martelo field, TBMT, and with that, we were able to reduce our diesel consumption a lot. We completed the decommissioning process of FPSO Polvo and its deep production system. With that, we have only two producing units, which make the operation a lot more streamlined. The lower graph on the left, you see the evolution now of the Brent price increasing lately. However, we don't focus on that very much because it's something which is out of our control. Now, controlled costs are our focus, and we believe that protection is our best weapon in this world of commodities.
With all that production and improvement and improved operating costs, we could achieve good results and should continue on this journey to improve even more in the next quarter. I will now move to slide number 7, just a little about the performance of each asset. Let's start with Frade. This quarter, we saw a considerable improvement in operating efficiency at the field, its production capacity, actual and planned. We were able to have an operating efficiency close to 100%, one of the best for the field lately. Despite the natural decline of the reservoirs, we have been maintaining the field at an excellent operating performance and also from the standpoint of costs. Now moving to Albacora. Moving in more detail regarding the field revitalization and then the development of Frade field. Since we acquired the field, this was in our schedule.
There was a certain impact of the COVID pandemic that delayed the project, but we finally started this operation. This quarter, we were able to obtain approval from all necessary agencies, ANP, IBAMA, etcetera. We will then mobilize our contracted rig to the field after some adaptations needed in this Q1 , the necessary maintenance. We arrived at the field in mid-April. We started operating it. We finished the first and second phases of well, and we continue. Hopefully by the beginning of Q3, we will have the results with this well starting production. The revitalization campaign was split into two phases. We call the first phase the revitalization of Frade as we're first producing well injection well, and the second phase with three producers and one injector.
Depending on the performance, and if we can capture improvements along the process, it is possible that we will bring forth other phases. This is being reviewed, and we are reviewing the plans in operation. The rig that you see here in this photo on the right is already a reality, and this rig should be at Frade field for the next few months until next year, when it should be mobilized to Wahoo. Now moving to slide nine, please. Just a little about the Polvo cluster, TBMT Polvo cluster. It had a big improvement in the company's performance. This quarter's results from this asset in Q1. We completed the delivery of the last valve that remained. It was under workover at TBMT, and now we have a production capacity which is completely full with all wells in production.
Now with the gas energy producing unit started up, we will gain more reliability and we will increase the operating performance of the asset. We can see here in this graph showing the history of production and operating efficiency in Q3 is actually unified, but there's lots of production in recent quarters which impacted efficiency, was due to TBMT well, which was offline. We have been doing some workovers with the Maersk rig, and we see the evolution of both recovering 100% production capacity reaching 97.4% efficiency globally for the cluster, which is very good considering that this is a mature field and we'll continue to work to improve this even further. With the Polvo field, they have excellent performance in Q1.
The focus of these fields now is to maintain reliability, improve operating efficiency a little more, and have stability in the coming quarters. This is the main goal. Now moving to slide 10. I will speak to you about Wahoo. For Wahoo field Q1 is also an important quarter. After the evaluation of commerciality in the end of last year, we submitted the development plan to ANP. We finished the detailed engineering project with all of the specs. That's to go to market and open the bid to get the best proposals. We expect that in the coming months, towards the end of the second quarter, we should have firm proposals for the acquisition of goods and services for Wahoo development, both for the tieback project and the host AT system and wells.
The only thing that is kind of certain is the rig that is going to be moved there. The part of equipment for well construction and host AT systems still needs to be purchased, and we expect kickoff the project in the coming months. The next steps for this field are approve the development plan submitted for it, and to start the process of getting the project itself, including well construction and the tieback, and proceed with the acquisition of goods, materials, and services to start the operation and have first oil flowing in the beginning of 2024 according to plan. Moving to slide 11, I will speak about Albacora Leste field that we have acquired. This field shares characteristics that are very similar to Frade. It is truly one of the giants in the Campos Basin.
To give you an idea, Frade has 1.1 billion barrels of oil in place, and Albacora Leste has 4.4 billion. In terms of volume, it is four times the size of Frade field. In terms of characteristics of the reservoir and oil quality, they're basically the same. Because production, there is one FPSO and Albacora Leste has 17 producers in wells. Frade, we have FPSO and we have multiple producers. So in operational terms, very similar. In terms of production capacity, Albacora Leste still has a lot to be generated. That's why we call this reserve, I mean, this certification of 1B reserve is only 280 million barrels. There are also some deep reserves. The fact that it is close to Frade field further strengthens this cluster in the north part of the Campos Basin.
All the part of logistics support, capturing operational synergies will facilitate operation quite a lot, one hand helping the other. We are now getting to the transition phase of the asset. We are now exchanging information with Petrobras to figure out how to go to. The fact that we already have our own strong production should be reminded that we have the FPSO at Frade, FPSO Bravo at TBMT, Polvo, and the NORBE VI rig, all of that operated by our own people who have not only the necessary know-how. All of that allows us to facilitate the transition process. We are going to work to bring our own culture and work methodology by our own people at P-50, which is the FPSO that is in production at Albacora Leste today. After this transition, we start the phase 1 in our work plan for Albacora Leste.
The first 18 months are established, and this is a process for us to increase reliability, stabilize production, increase the reliability of the production system. If you look closely, the production is very variable. There are different behaviors month after month, and we need to stabilize production and invest a lot in the FPSO, in these structural production pipelines, correct machinery, improve operating efficiency, which is frankly around 80% of the given potential and actual production, so that we can boost the numbers that we make to have a better view. In other words, about 90%-95%. This is the focus during the phase one. To stabilize production, reduce operating costs with our methodology, our culture, and our team that will be working there. We head into phase two, aiming to increase production through the redevelopment of the field.
We'll split this into a first part for the wells that have been mapped. We're seeing the development plans submitted to the ANP with the wells already mapped out that we have evaluated and confirmed. We will connect three wells which have been drilled. Two of them are already completed and we need to do the static connection. The third well needs completion plus the connection, and this is the pre-salt well. After that, we will have two new wells that will need to be drilled, completed, and connected. We will move to the post-salt wells, which are infill drilling wells. In other words, we will drill in reservoirs that are already in production. There's also an injector to improve the recovery factor.
Here are the estimated values which we have calculated, and of course, we're going to work to improve those despite any inflation impact. We work at the company daily up to date to find ways to do more with less. This is our great challenge. Regarding early decommissioning, there is a part that is already defined, and these are the more critical wells that need to be abandoned by 2027. There are five producers and one injector. Nothing out of the ordinary. When we're talking about abandonment, this just needs to be compliant and we have an estimated value of BRL 800 million, and that should happen by 2050. It depends on us. We'll increase and improve production to extend the lifespan of the field.
This is our plan for Albacora Leste, and I'm sure that this field will bring us a lot of joy and appreciation. Thank you very much. Looking forward to welcome.
Thank you, Francilmar Fernandes . Good afternoon, everyone. We will now talk about our financial performance, but I'd like to make a brief comment before getting to the slides. The company has communicated to the market, and in agreement with our auditors, made the decision to change its functional currency to US dollars. We understand that this currency is a lot more applicable and compliant to the nature of our results and operations. With that, we will start disclosing in our press releases and earnings presentations our numbers in US dollars. Our quarterly statements are filed with CVM and will continue with numbers in BRL for legal reasons.
We will now post the results of the company in dollars for better understanding by the market and better disclosure. Now moving to slide 12, about our financial performance. I show as we do every quarter the evolution, excluding the impact of IFRS 16 and including these impacts. We do like to look at the results excluding the impacts of IFRS 16 as well. Particularly in this Q1 of 2022, we posted a revenue of about $310 million. Please note that these tables are now all in dollars. Now, this refers to a sale of approximately 2.8 million barrels at an average net sales price of $106. A very strong quarter from the standpoint of international oil prices, which naturally drive our revenue up.
Comparing this with Q1 2021, we sold only 2 million in Q1 2021 with an average sale price of around $60. That's why we have this competitiveness of 160% in the delta. Additionally, we maintained our costs under control, G&A also under control. That led to an EBITDA of around $225 million with a 73% EBITDA margin, a very significant margin. As always, we like to look at adjusted EBITDA, which excludes non-recurring effects and so on and so forth. We had $228 million and a margin of 74%. Excluding IFRS 16. In addition, I believe that it is worth highlighting that we had income tax and social contributions that were very positive.
This is explained basically by the reduction in the expectation of payment of taxes on the back of the Brazilian currency appreciation against the dollar, and with that we got an income in the period of almost $230 million. Most likely the highest net income ever posted in our history. Now moving to the next slide, number 13, to talk about funding. I'd like to draw your attention to the graphs on the left. The top about average duration of the debt, the bottom one about the average cost of debt. What happened is something more specifically in this quarter. We have been reinforcing the company's cash through some working capital loans arranged by our relationship banks. These debts are a little shorter than our bond.
They mature within 2-3 years, and we were able to quickly raise an interesting volume of debt in this quarter, around $200 million-$230 million. With that, the duration dropped to default from 4.39 to 3.61. In the past, also drops. These are loan facilities that we have been raising between 4.15% per annum in dollars, 4.7% per annum in dollars. Naturally, the 3-year duration. This is a little more expensive versus the 2-year duration debt. We have been reinforcing our cash. This movement continues also in April and May. That's why we can say, consider the company extremely liquid, extremely solid, and with very easy and fast access to the banking market. I believe there is an important point to mention.
As you all know, as the company has disclosed, we have the signing of Albacora Leste. Because of this fast access to the banking market, the company is fully funded to honor this acquisition and to pay all of the obligations referring to this very important deal. Now moving to slide number 13. We'll speak about the performance of the company's net cash. We start with a reference number of $231 million in 2021. You see in the chart an EBITDA that is very strong, around $230 million, and then we have some obligations unpaid. P&A payment referring to the acquisition of Wahoo, $30 million. A working capital reduction given the increase in receivables. We had sales concentrated in the end of the quarter. CapEx of $34 million.
This includes recoveries of Polvo and TBMT, the mobilization of FPSO Polvo and the start of the revitalization campaign of Frade field. Additional financial results and payment of taxes, cash effectively. With that, we end up with a net cash of about $348 million. A very solid level. We have been able to increase the net cash position of the company due to the strong cash generation in the quarter. Now moving to slide 15. Speaking specifically about leverage, we like to follow this indicator. Net debt over adjusted EBITDA we show. Also in our main debt today or bond, we have a covenant that says we should be under 2.5 times this ratio. Today, this indicator is negative because we're a net cash company. In other words, we have more cash than gross debt.
With this super strong cash generation in this quarter, this only improves. We can observe the $348 million that we saw in the previous slide, and the ratio is -0.5 net debt over adjusted EBITDA, which shows that the company is deleveraged. It's under control. A normal position of net cash that is very strong on the back of this excellent quarter that the company had. It also shows us that the company is prepared to grow, prepared to take a little bit more debt if needed in case we continue to make new acquisitions. I want to stress the point that we are fully funded for the acquisition of Albacora Leste. We have a very good and fast access to a loan at a rather interesting cost.
I just want to underscore the position of financial solidity that PetroRio enjoys. With that, I'm happy to turn the floor back to Roberto. Thank you.
Thank you, Milton. Well, let's speak a little about ESG. Among the initiatives we have this quarter, I would like to highlight three of them, which I believe are very relevant. The first one has to do with the environment. In February, we finalized the adjustment in the compressor of FPSO Bravo, which operates in the Polvo TBMT field. With that adjustment, we started using the whole gas produced at the field to produce electricity and energy for the FPSO itself. That reduces diesel burning by the FPSO quite a lot. It markedly reduces our carbon footprint in this cluster, and it obviously improves cost because it is a lot more economical.
It's a lot more economical and a lot better for the environment to use gas generated at the field to move the turbines than having to bring diesel oil to move those turbines. We made that project, and it's already bearing fruit. At first, on Francilmar's end, this is the flagship of our cost reduction initiative and improves the lifting cost, which dropped down to $11.2 per barrel. This is also the flagship of our initiative to reduce our carbon footprint in this cluster. Another very important item in this quarter is the ASEM Offshore Project. We started to sponsor Todos na Luta Institute and the ASEM Institute, also involving SENAI, for youth qualification, both technical and non-technical, so that they can work in the offshore sector. We're bringing in Albacora, and that is going to demand a relatively high number of new hires.
Instead of looking for these people in FPSOs, which are already operating in the market, we believe in training new professionals. I believe that this is good for society. This is also good for our industry, so we don't have to be hiring people from other companies, so we won't create a vicious cycle. We're trying to create a virtuous cycle by bringing more people to the offshore industry through training. This is a new program that is going to be launched in the coming weeks, and it makes us very proud to promote social inclusion. Another important item, and this is more on the cultural side, is that we already sponsored Teatro Cavalcanti, and now we are sponsoring Laura Alvim Culture House in Rio de Janeiro.
It is a symbol of the city, and we thought that it would be interesting to have them count on PetroRio's support. Now moving to the next slide. Actually to the next slide, the last one. I would like to speak a little about the next steps. The first one is, and will always be our focus on safety and health of our employees. This has been our focus for many years now. On the operational side, we have some quite relevant points for the next quarter. In the end of the second quarter, beginning of Q3, PetroRio will definitely have something to say about this in the next conference call, i.e., the revitalization campaign of Frade has started, and in the next conference call, we will most likely have something interesting to say about the start of the revitalization campaign.
We will continue to work on the approval of the Wahoo development plan we declared commercially in December and submitted the development plan for approval. We will work with the approval plan. Also, our reserves certification added a lot of 1P reserves due to Wahoo that moved from contingent to reserve. We will continue to work hard on the conditions precedent for Albacora Leste, which will be mainly CADE, the Brazilian Antitrust Agency, and ANP. More ANP than CADE, I should say. Obviously after that there is a bad, a negative piece of information. Because we would have had to mess up, and I don't think that our team is that amateur. Francilmar Fernandes started having meetings to. This is the transition phase. It is a lot more operational. When we'll start boarding people, how many people we can board?
We have something called shadowing data transfer, model transfer, seismic data transfer. These are huge data, difficult to transfer. How we're going to transfer them? What kind of system we'll use? What kind of system we use and Petrobras uses. That's a lot more cooperation driven. This last question regarding Albacora, right? Or other assets. Well, Christian, regarding Albacora, of course, we will continue diligent way as we normally are. We're normally very diligent, and we're working hard to get there. If we don't get there, at least the company is prepared. We can move to other deals in the future. We'll continue to look at what's in the market. I think Albacora is a more latent deal in the market. We've done all of the analysis. We're in the initial contract phase.
It's not, "Oh, we didn't sign Albacora now, so we must be going to sign something else." No. Of course, we're going to start looking at other data rooms and participate in other processes, carve out other processes, because this is our DNA. I don't think that any of that would happen in the short term, because you can get into the data room, negotiate, prepare the contract, et cetera. It would naturally be some months with a void, but then obviously we could have another big deal replacing Albacora. It is. It's not stopped.
Perfect. Thank you very much, Roberto.
Thank you.
Next question comes in writing by Pedro Soares with BTG. Pedro asks if we can comment on the reduction of 1P reserves of Polvo to TBMT. He asks if this is linked to a very conservative oil curve that was used in the reserves certification. Is this oil curve also considered for the certification of Albacora Leste.
No, the reduction has nothing to do with the oil curve. We are very conservative in oil curve. The assessment was done at $62. 62 because it maintains the past one. Last year it was 62, and for comparative purposes, we kept this one at 62. The reserves are considered at $62 per barrel in the long run. For Albacora Leste, the reserves is calculated also based on $62 for the long-term Brent.
All of our certifications to be issued this year will all be comparable to one another from the standpoint of reserves. What happened that is different? I'll give my explanation, and Francilmar Fernandes can help me. What happened was, regarding Polvo, we didn't drill two wells in the Eocene and so on. Then we thought it would be better to take that well from 1P to 2P. That was one move. Two wells that were in our drilling schedule of 1P were moved to 2P. For the simple fact that we are not going to be drilling at Polvo now. We're not drilling at Polvo next year. We'll be focusing on Wahoo and so on. First, we don't want to get distracted. There is another point.
The Polvo Eocene, although the volume of oil is there, the oil is a little heavier than we imagined at the beginning. It was a heavy oil. Well, it is a little heavier than we imagined, with an aquifer which is a little stronger than we imagined. With that, the performance of the well is a little poorer than what we expected. These two effects led to a small reduction of the reserves in the Polvo field. Just like we had a reduction in reserves at Polvo field in this report, moving from 1P to 2P. In the next report, it wasn't included in this one because of the environmental license for Frade that had not been issued, and we would then need to redo the report. It would delay things. Is the inclusion of Frade water injection, exceptionally for Frade field.
The recovery of oil relative to water injection, the delta that we have of better recovery due to water injection at Frade. In the case of Frade specifically, it is in 2P. The reason it is in 2P is because in the past, the license was canceled. The public prosecutor's office, ANP, IBAMA, they canceled everything, so water injection was stopped. DeGolyer included that in 2P. Now, when we restart injecting water, and if we have good results, we should bring it back from 2P to 1P. If we look at Wahoo certification, water injection is already in 1P. In the case of Frade, it is still in 2P. We will capture volume, which I estimate between 6-9 million barrels for Frade field, between 10%-15% of the volume of reserves.
We should bring it to one P. Well, you see, we didn't want to do it now. We think that we can wait for the next certification of reserves, and we are going to have a clear idea of the effect of water injection. This is the kind of artifact that happens sometimes. We try to play with one P, two P and reflect our view, our vision for the field. We could have pushed things a little to one P, but we didn't want to do it. We wanted to be more conservative. Another thing that reduces reserves is production. Certainly reserves at the prior year, and we have production for the year, and we have the delta production and the new reserves.
Thank you for the question, Pedro. Our next question comes from Bruno Montanari with Morgan Stanley. Bruno, go ahead.
Thank you for taking my questions. I have a couple. When we think about behavior of oil price, I imagine it is a lot higher than the price the company imagined a year ago when you continued with your M&A campaign. My question is, does this change your view about the firepower of the company and the need to raise funds? Thinking about Albacora Leste. With this kind of cash generation and a very strong cash position, in this scenario, if you don't get Albacora Leste and there is a gap of 6-12 months, would it make sense to have some kind of distribution to shareholders so that we could have faster return on investment? My second question is about inflation. We hear today almost all global companies talking about difficulties in services, equipment, costs going up.
What you're doing in Wahoo, and Francilmar Fernandes mentioned that, do you see an impact of inflation on the oil industry in Brazil?
All right, the first question was about?
Dividends and funding. Oh, the question was about firepower.
Oh, we don't know. Regarding firepower, of course, a higher price for the oil increases and improves our firepower. Of course, no doubt about it. Today, well, we are always forecasting the company's funding using a low oil price in the long run. When we talk about funding for Albacora, we talk about the need for funding in case we sign Albacora in the second deal. We will need about $1.7 billion to be divided between debt and equity, as we always say. Today, we're thinking about 100% of the field and not 70%. In the past, we had a partner in the field, but now we're thinking about this funding for 100% of the field because the company approved. Last quarter of the company was excellent, so we take all that into account.
Although we're considering the oil price in the long run lower than now, but the company can execute well in this quarter will relieve the company's cash. The situation is undoubtedly better. Now, if we don't get Albacora now, obviously, we won't be accessing the capital market in any way then. Our mindset is to continue to invest in the company, in fields, et cetera. There would be no room for dividend payout. We have very good projects for the company with very high returns, organic or future M&A deals. It wouldn't make any sense to think about dividend distribution. Also because of the bond. The bond is in place and it limits us in terms of dividend payout, and it makes sense. When we started this story way back when, we raised capital to deploy and invest in projects with adequate returns.
This is what we've been doing, and this continues to be our mandate. No dividend payout. I want to be clear and transparent about that. There was another question about inflation. This inflation, of course, it's respectable. At least $70 million for the well. In the past, the amount was not $70 million, it was lower, $60 million or so, and we already felt an increase. We had a contingency delta for possible things to happen, and this contingency has already been consumed. I don't think that will be a vulnerability now because we have the rig and we're contracting the equipment, so we have a pretty good idea of the prices. Because the equipment we're going to use in Wahoo, with the exception of the manifold and the multi-phase pump, are interchangeable equipment between Wahoo and Frade.
We're buying a lot of things for Friday. We know the prices. I don't expect a lot of surprises looking forward, but undoubtedly we do see some prices going up. The rig is one of them. We got our NORBE VI rig at $170,000 a day. We signed 500 days for the rig, plus five options of 70 days at $210,000. It was a good contract. It was the right timing, but we're looking at the market. We don't think that we are going to be impacted looking forward, but we see that there's some movement there. Because of Albacora, we had a CapEx of $19 million. Albacora, the FPSO is bigger. It needs a little more maintenance. In Frade, we're operating under $70.
Francilmar Fernandes is laughing here next to me because we have a little bit of fat, and we do have a little bit of fat, and this is what we pursue. Of course, the world is in inflation. I wouldn't say that we have a problem with our guidance, though.
If I may ask one last question. If you can talk about your discussions with Petrobras regarding the other Albacora. What's the bottleneck? Is it price? Is it the contract? What is hindering the signing on the other side of the ring fence?
We're just discussing value, price. Price does not include only lump sum. It's agreement between signing, closing, different payment earn-outs relative to oil price, earn-outs relative to new reservoirs. A sum of all that, all of that together, and that's what makes up the price, and this is what we've been discussing with them. Regarding the contract, we have very few outstanding items, if we actually have any. 99.9% of the contract is agreed upon. You don't see the one responsible, the one person we have responsible for M&A. He's sitting right next to us. You can't see him, but he's here, and he's saying it's okay. It's just negotiating the value. It's a one-dimensional conversation with Petrobras. It's not like we have 10 things being negotiated. It's just the price. The result of Albacora Leste is bigger than we imagined.
It's bigger than Petrobras imagined. The reserve is bigger. It has nothing to do with the result that we see at super basin. It is bigger than everyone imagined. That required us to review our proposal, and that's what we've been working with in good faith, both us and Petrobras. Obviously. Thank you.
Our next question comes from Gabriel Barra with Citi. Gabriel, go ahead.
Hello, everyone. Congratulations on the results. I'd like to touch on three quick points. Looking at Albacora Leste, the pre-salt region, as you mentioned, you have to go through a unitization process, and correct me if I'm wrong. If I'm correct, could you give us some color regarding this process, what we can expect regarding Repsol, if they're going to participate in the process or not, how much each one will get, and how the process will be after unitization, and then thinking about the production curve. That's the first point. Second point. Talking about the certification report for Polvo and TBMT, comparing the two certifications, 2021 and 2022. There was also discussed inflation and the OPEX increased a year over year, I think 10% more, if I'm not mistaken.
There's also inflation in the sector, so could you comment on that? My last point is about Wahoo. Could you give us an update about Wahoo? Can we expect something before the arbitration regarding a final decision for Wahoo regarding IBV? That would be helpful to help us think about the future of the project. Thank you.
Okay, let's go one by one. The first one was the unitization. Unitization should happen before year-end, for sure. We committed to submit to ANP by year-end, and of course, this can be extended a little, so don't consider this written in stone. We committed to submit to ANP the Arapuça development plan for this oil field in 2024. This is a commitment that exists. It was assumed by Petrobras and of course, we took it over when we bought the field. With that, the parties will try to unitize the project before year-end, so that we can figure out the development plan and so on and so forth. When we look at our reserves, it's net of. It has the net production of Arapuça for PetroRio. I don't wanna speak about percentages because Arapuça can be unitized with Roncador.
I don't wanna talk about percentages because we're still discussing how much of that will be part of Roncador, so the percentage can change a little. Net for PetroRio, it remains the same. What matters for us is that we are very sure about what is net for PetroRio. The discussion is to what extent this will be linked with Roncador, and this will define the stake. Repsol, Sinopec does not participate in Arapuça. This is unitization of Albacora and Roncador. Now, your second point regarding reserves certification. What changed was that after the tieback, reserves changed a bit. Dommo in the past had 20% of TBMT. We had 100% of Polvo when the FPSOs was separated.
We would do a cash call relative to 80% of the cost of TBMT for Dommo, and Dommo would pay just like any concession. With the two fields together, it changes. They are entitled to 5% of the oil. They only have 5% of the revenue. We are responsible for 100% of the cost, so we have 95% of the oil produced. We trade the oil and we bear 100% of the costs of both fields. That explains the difference between one report and the next. Our expectation is the same regarding OPEX. It remains very similar to what it's been in the past. If you look at our numbers, we don't feel that inflation delta.
I think that this is a lot more about the business itself, how it was designed, a lot more than a great expectation of inflation. OPEX changes a little bit because we can add a well or remove a well. The last point was the arbitration of Wahoo. Well, arbitration of Wahoo is a slow process. I don't want to sound pessimistic about this, not at all. I think that we stand a huge chance of keeping that working interest at Wahoo. This is the argument that we built for the arbitration, but it is going to be a slow process. We'll continue to develop the field, no question. I believe that what we have to do here is to focus on the operational. In other words, to develop the field, develop the schedule, wait for the price. Arbitration can be an upside.
I think that we can enjoy a great upside in the future if we are successful with the arbitration. Again, I'm not being pessimistic here, okay? Not this, but I don't want to think about the arbitration. I don't wanna think about a potential upside now. I think that we need to give it some time. We're talking about some months, perhaps a year, for the arbitration to bring some kind of fruits. We've spoken with many experts, and all of them say that what we've done is what needed to be done, that everything is great. We need to wait. We cannot really count on these verdicts before they actually come.
Thank you very much. Super clear, and congratulations on the acquisition.
Thank you, Gabriel.
Next question by Régis Cardoso with Credit Suisse. Régis, go ahead.
Hello. Can you hear me?
Yeah, we can hear you.
Thank you. Thank you, guys. I'd like to touch on a point I'm not sure you spoke about hedge. I'd like to understand your hedge policy. If you continue with a mindset of protection from a downside or if you're thinking about the sales price for your production. That's one of the questions. The second is about the lifting cost. I think that this quarter we had a positive surprise, and I would like to understand if there is any expectation regarding the lifting cost up or down. If you'll allow me, a more general question to discuss is the execution risk for the several projects that the company is embracing. Because you see, PetroRio grew very quickly.
It doubled in size, and now with Albacora Leste, and potentially with Albacora, you're going to grow even more. You'll be doubling in size, at least. How do you see and mitigate the execution risk? Because precisely regarding Albacora Leste, which is as big as the rest of PetroRio, you have an ambitious plan of doubling production compared to the current level. If this expectation does not materialize, just like the upside can be great regarding the size of the company, the risk is also greater. I would like to understand how you're thinking about execution risk and the size of the bets. How they can have a relevant impact on the company. Hedges.
All right. Let's speak first about our hedge policy. Well, we always thought about hedging the downside. We never thought about the upside. This has always been our mindset, and it continues to be so. We always have a hedge policy through puts, waiting for the volatility to drop. When it drops, we buy put options. Our horizon is always six months. Now we're practically without hedge because of the volatility. The price of the oil is very high. It doesn't make sense to buy put options with such a high volatility. If it drops, boom, revisit our position. We do have a discussion in-house with our board members. Looking forward, imagining that we are not successful in Albacora, whether it would make sense to extend our hedge policy until the end of 2023.
This is something that is being approached by our board. Never any hedge with NDF contracts. We will never resort to NDF contract hedge. It would be something with a put option. Sometimes you can have just like a spread. You can wear it with a floor and a cap. We're still looking into this. We haven't come to a conclusion. If we are successful with Albacora, it might make sense to create a safer mechanism than just selling the oil be subject to margin calls, et cetera. This is discussion. I cannot really tell more than that at this point. Regarding lifting costs, like I said, today we are at $11.2. The villain in the quarter was the exchange rate. Now the dollar is becoming stronger again. This is good for PetroRio.
It's bad for Brazil, for the Brazilian population, but it is good for our company. I think that this is going to relieve things a little. In Q2 we're expecting a similar lifting cost. FX will help us a little bit, but on the other hand, we'll have decline of the field. It is also certain. Now we've got gas in February and March in Q1. In the second quarter, we'll have the gas unit operating for three months. I think that it will remain the same. For Q3, we can start thinking about a lifting cost of around $10-something. When Frade has a successful drilling campaign, and it's simple math. If we have 6,000 barrels, or even a little less than 6,000 barrels, we are going to get to a lifting cost of around $10.
In the future, we'll work to maintain the lifting cost. With Wahoo, we'll definitely have a single digit lifting cost. This is kind of the trajectory of our lifting cost. I'm moving to your last question. When we look at the operational risk, execution risk, as you called it, I tend to see this in the following way. Today, when we look at the projects that we have in our portfolio, we have Frade now, Wahoo next year, 2023. I'm talking about drilling here, okay? FPSO operation, I know it's big and all, but it's something that is fixed. You put the FPSO there, it starts operating. Of course, Francilmar will have a day-to-day control for that, but you have a team to do just that and make adjustments to the team.
What brings more complexity is CapEx, drilling, installation, rigs, engineering, et cetera. That's simple. This year we'll have Frade, next year Wahoo. Along next year, we'll also have the start of operation of Albacora. These are two different things. We'll be drilling at Wahoo and operating and quote-unquote learning about operating Albacora. Two different teams, two completely independent teams. We will be operating Albacora too. Then in 2024, Wahoo will be in production. When Wahoo starts producing, we'll start doing drilling and engineering in Albacora. Of course, big and all, but with all due respect, Francilmar Fernandes is doing more of the same, right? Do you want to say something? I think I can add something to that. In terms of risk of execution of the operation, although the field is very large, it's basically what we've been doing so far.
Because we operate Frade, and Frade is very similar to Albacora Leste and vice versa. We already have an operation in Polvo and TBMT. That's a little more complex. In terms of operating and producing, we know that's our business. No news there. We can add another cluster. That's not very challenging. Teams that are necessary, we already have the teams in-house. The teams are trained and prepared to cover the new unit. In terms of development, production, installations at sea, this is almost like an assembly line. This team is on Frade, where we have the drilling rig. The team is there, then they're going to be moved to Wahoo and then to Albacora. There are no issues there. Finally, you mentioned the catastrophic or apocalyptic outcome. Oh, we developed the wrong populations, there's nothing in Albacora. Okay.
Undoubtedly, the project will go through a tieback to Frade. This cannot happen today because we expect to have more than 70,000 barrels a day, 400,000 from Wahoo plus what Frade is producing, around 70,000. In Albacora Leste, more than 55,000. I mean, there's not a lot of oil to speak of in any of the FPSO. Albacora Leste would have a little bit, but we don't want to push it. If you say, game over, there's nothing else here, this is what's going to happen. Also the same that we did with Polvo and TBMT. I think that this is very far from what is going to happen.
Excellent. Thank you, Roberto. Thank you, Francilmar Fernandes . I didn't see Milton in the beginning. If I may, can I ask a follow-up question? Because I understood that your answer applies to Albacora Leste, right? I don't know if the other Albacora would change the order of the factors in this logic of we have the teams and they operate in parallel. Initially, operation in Albacora, we are just learning, but we are operating Wahoo. The teams will move around. How does the other Albacora change this schedule?
It doesn't change at all. The schedule of wells for Albacora Leste is very spread out, actually. We could have one rig working for Albacora Leste, Frade, dealing with the abandonments of Albacora Leste. For Albacora, just Albacora, that creates another layer in terms of engineering and drilling. For Albacora, we would need another rig. One rig working solely at Albacora. Of course, another team from the same engineering group, of course. We would have another engineering team dedicated exclusively to Albacora. There we can increase complexity a little bit starting in 2024, because that's when we would start drilling at Albacora, if we are successful in that acquisition. That would increase a little complexity because we're gonna have a second team, second engineering team. There's a lot of synergies.
It's not like I'm going to create an engineering department, a second engineering department. Of course, we're gonna need more people to run the Albacora project separate than what is happening already in the company. What we have in the company now is Frade, Wahoo, and Albacora Leste. Okay, thank you, Roberto.
Our next question comes from Luiz Carvalho with UBS. Luiz?
Hello. Thank you everyone for taking my questions. Roberto, I'd like to go back to discuss reserves. When we look at Polvo, TBMT, you obviously gave some details and some explanation regarding why the number decreased. When we look at the next three to five years of the project, perhaps Francilmar Fernandes can help us, but I'd like to get a sense of the decline rate. We saw decline rate a little over 15%. I don't know if that makes sense to you, but that's something that caught my attention. Still on reserves certification, we know that the focus of the company is Wahoo and oil production. Gas reserves for Wahoo were also reduced. Could you give us an update on that?
My second question, you mentioned that you took on some loans for Albacora Leste and for some opportunities. Could you elaborate more on these opportunities? There's also the Dommo opportunity. I just want to understand the rationale here in terms of returns.
In Portuguese, while we're cutting the service. Okay. We removed two wells from Polvo and put that into 2P. We got part of the production, we shifted the whole curve down, and your economic cut off may happen before. Let me speak a little about that, might help you. Remember we talked about the Eocene in Polvo and TBMT. We have the reservoir, we have the oil field quality. The difference is the first well that we drilled in 2020 was very good and continues to be one of the biggest producers at the field. The second well, that was last year, and that's where you see the greater decline rate. It started produced really well and declined quickly. It declined because the position of the well was close to a water fault.
The amount of water increased a lot and that impacted the decline rate for that. That's why we took a step back. We removed those wells from the Eocene. In the short term, we'll have to study this to define a strategy to be able to produce excluding oil, trying to hold back the water. I think that this is what led to this reduction that you mentioned. Regarding Wahoo, we had 126 million barrels of 1C. We continue to have 126 million barrels of 1P. Perhaps we haven't been clear enough. If we're considering 1C of Frade, when we connect Wahoo with Frade we had another 6 million barrels of 1C reserves.
1C reserves continue to be 1C reserves, right?
The delta that you might be thinking would be these 6 million barrels, but they continue. I'm not sure they're 1C or 1P, but that is the delta. 126 million barrels of Wahoo continue to apply. They moved fully to 1P reserves.
Before the second question, going back to Francilmar Fernandes 's point, of course you abandoned the plan for the Eocene. Looking forward, do you think that the decline will return to the previous rates? In the new reserve certification, excluding oil prices, could you have a review of reserves up, or you don't expect that?
Yes, Luiz. Just one step back. We believe there's a lot of oil in the Eocene. The first well that we put into production continues to be very good. It is the second best producer in the cluster. The productivity is high. We just have to to get it right and see the order of priority. This will definitely in the future move from 2P to 1P. Please understand we got productivity of the second well, and we extrapolated to everyone. With that, we got two wells from 1P, put them in 2P. That's what happened when we drill a third well, if we are successful. If we have a third well that is similar to the first well, these reserves will return to 1P. There was the last question about Dommo.
Well, you know, this is a market rumor. We have heard this a number of times, but this is just a rumor. There's nothing there. We know Dommo, we like TBMT. If Dommo's interested in selling TBMT, it might be interesting. We've heard so many things about this, and it's all rumors. I don't think that we should limit ourselves to that kind of circus that people are making about this. Investors asking us, "Are you going to buy Dommo? What will be the price?" These are all rumors. Okay?
Thank you very much.
Our next question is from Gustavo from Bradesco BBI. Gustavo Sadka.
Thank you. I have just one question about Albacora Leste. In Albacora Leste, in the second phase, how should we see the infill drilling wells? Will they be similar to the Frade expansion or will these be smaller wells because it's infill drilling in a productive reservoir?
Well, for Albacora Leste, we have three classes of wells. One, those first two wells that have been drilled, they are completed. They have actually produced in the past. These will be the first two wells to be online. They'll be online with a lower productivity, around 3,000 barrels a day, nothing more than that. There's a second class of wells, which are the Arapuça wells. The Arapuça wells have a higher productivity. Productivity similar to Bahô, to Forno, so on and so forth. Close to 10,000 barrels a day. These will be the next three wells to be completed in Albacora. One of them is already drilled and not completed, and the other two to be drilled. In the future, in the end of phase one at [Guaiambô Lado], there will be seven wells left to be drilled.
These seven wells, there's a little bit of everything. It's in the post-salt. There will be wells producing 5,000, and others producing 7,000 or 8,000 barrels a day. Same, but because it's in Frade, some wells produce more, others less. The second phase is also the post-salt. It'll be similar to the first phase. The difference between one and the other, not that the second phase will be less productive. The difference is that the first phase is what we used to do our economic assessment, because that's where we have more information about. The second phase will be defined now according to the seismic, the 4D seismic data that they're collecting. The 4D seismic will give rise to the plan for the second phase, but the wells will be similar.
They're in the post-salt, 5,000-8,000 barrels a day, something in that range. Frade will compete with Frade. When we put together the plan for Albacora, we didn't include all of the wells one after the next, reaching a peak of production. We were more conservative. We spread it out over time because in Albacora we just have one rig working there. These wells will compete with Frade wells. We'll always try to drill the well that will give us the best return. Sometimes we get it right, sometimes we get it wrong, but we always try to get the best return. The rig will be competing with Frade. We'll drill a little bit in Frade, we'll drill a little bit in Albacora. That's easy to do because in one field you can see the other. They're very close.
They're neighbors, and we're going to use this as one single portfolio. That's the reality.
Okay, thank you.
Thank you, Gustavo.
Our next question comes in writing from Carlos Carazo. And h e asks, well, has a couple of questions. The first, if we can give him more color regarding our price realization compared to the Brent in the quarter. The second question, would we consider to issue new shares in Brazil or abroad, and if we consider new debt issue in the market. And finally, he would like to ask about negotiations of Albacora Leste. Okay, let's go one by one. The first, realized price higher than average Brent. Well, in the quarter, we realized a little bit more than $4.50 in the oil sold from actually $4.50 in the oil sold from Polvo and TBMT. I'm talking discounts here.
It was Brent minus $450 for the oil sold in the FPSO Bravo, which is Polvo and TBMT, and Brent minus $2.32 for the oil sold from Frade. Now, in the next quarter, we have some sales already realized, and these have substantially better numbers. So far, substantially higher numbers to these $450 and $2.30 that I mentioned. What happened in the last quarter is that we sold using the Brent of March and the Brent of April as a basis. In February, half of our offload was in February, and it was first priced with the Brent of March minus the discounts. The second part of the offload was delivered in March and priced with the April Brent minus the discounts.
Sometimes it's priced with the Brent of the month and sometimes with the Brent of the following month. There's no rule there. Any of the two options can be viable. At the end of last year, this played in our favor. Also now it played in our favor. We have to believe, you know, this business requires a little bit of luck, and sometimes you get a realized price that looks higher than the Brent for the quarter. It's not. It's just a fact. The second question was if we consider new shares issuance in Brazil and other market or new debt issuance. Well, no. Today we're not issuing anything. If we buy Albacora Leste, that changes things a little bit. We will consider this.
It might be debt, it might be equity, but it will be in a project, a new project for the company that will have a great return. We will need to fund the project. This needs to be treated separately. What we have today in the company, Wahoo, Albacora Leste, etcetera, there's no equity, no debt issuance, nothing. The last question is even that the negotiation processes were running in parallel and they are now different. What is the Albacora negotiation like now? Well, we're resuming now the Albacora negotiations. I believe that May is going to be a very important month for us. Like I said, in terms of the contract, we've moved forward a lot with Petrobras. There are no outstanding or pending items. What's pending now? The price. This is the most important point, but it is just one point.
The value to be paid. You know, I don't think that will need too much time to debate that. Yeah. That's why I think the month of May is going to be important for the company, for us to have a potential negotiation of Albacora, or as some people call it, Albacora West. I think the month of May is going to be very important. I can proceed with one last question from Ronnie Crocker. He asks in writing: Does the company have any signal from Repsol regarding its strategy for Albacora Leste? Ronnie Crocker, Repsol... First of all, Repsol does not operate in Brazil. This is a fact. I'm not saying anything new. It seems to me that Repsol's strategy is not to be the operator. Repsol does not have the necessary staff to operate Albacora. Albacora Leste. Let's talk about Albacora Leste.
Albacora Leste is a field that requires a certain expertise if the buyer has an FPSO, which is operated by Petrobras. It's going to be operated by PetroRio. That's a requirement for us. This is what we want. We want to have a vertically integrated operation. We like to operate the FPSO, but there are other models of operation where the companies hire somebody else to operate the FPSO for them. This is not our case. It is a somewhat more complex operation, and this is what we do with Polvo and TBMT. Please do not misunderstand. I am not talking about Repsol's strategy. In my understanding, Repsol does not have any operation in Brazil. It is a fact that operating Albacora Leste field is a difficulty level two. It's not something that you buy and you have a contract. You really need to operate it.
You need to have the people and so on and so forth. You know, I cannot talk about Repsol. I think that we are not going to have any trouble regarding their positioning. They have the right of refusal at the field and so on and so forth. I think it is unlikely that Repsol will be interested in operating this field.
Thank you, Roberto. Well, we are now closing the Q&A session. Roberto, would you like to make some final remarks?
No. Actually, I just want to thank investors for their support over the years in this past quarter. I would like to thank the PetroRio team that was linked to us. Today, 94% of PetroRio employees who have been with us for more than a year are partners of the company. This earnings conference call is also for you.
You are our shareholders and investors, so thank you for all your support. This conference call is ended. Thank you very much for your participation. Have a good rest of your day.