Hey everyone, welcome to PRIO's Second Quarter 2025 Video Conference Call. I am Jose Gustavo, your manager, and I'll be your host in this event. For those who want to follow us in English, we have simultaneous interpreting through the globe icon on the bottom of the Zoom screen. The translated presentation is available on our Investor Relations website. The comments on the results will be presented by our CEO, Roberto Monteiro, our CFO, Milton Rangel, and our COO, Francisco Francilmar. After the presentation, they will be available during the Q&A. At this time, all participants are in listen-only mode. To ask written questions, you can use the Q&A button, or you can use the Zoom raise hand feature to ask live questions. This event is being recorded.
This presentation contains information based on future estimates and forecasts based on assumptions adopted by the company, which can change and should not be considered facts or be used as the basis for financial projections beyond the plans expressed by the company. Now, I'll turn the floor to Roberto Monteiro, our CEO.
Good afternoon, everyone, and welcome to PRIO's second quarter 2025 earnings call. I'm going to start this call. I'm going to reverse it a little bit. I usually talk about the items, and then I talk about the numbers. I'm going to reverse that and speak a little about the numbers, and then I'll give you a slightly longer summary of how the quarter went. We closed the second quarter of 2025 with a revenue of $500 million, EBITDA of $276 million, actually, EBITDA X IFRS, of $276 million, and net income of $154 million.
It is true that these are positive numbers. They're good numbers, but it is also true that they are below the company's capacity. I am going to explain a little about what the second quarter was like and related to these figures. The first important item to mention about the quarter has to do with our production of approximately 9 million bbl throughout the quarter, which averages 100,000. Here, we had a significant impact from Frade Field, which had a scheduled shutdown, and the return from this scheduled shutdown was not ideal. We were back in operation. We had a compressor failure. We had this compressor problem for some time, and only later in June did we get this compression module at Frade working perfectly. It was a quarter that had production increasing along the quarter. We had a lower month in May. April was a little better.
Actually, no, April and May, and then June was the best month of all. Actually, reaching record production levels, we reached 120,000 bbl, 123,000 bbl, a record mark. It is important to think about Q2 as a quarter, to a certain extent as a transition quarter. We had a very important stoppage at Frade, especially because we will soon receive Wahoo and so on and so forth. Speaking about the other assets, Albacora performed very well throughout the quarter. At TBMT, we finally managed to resolve the workover issue. This was a quarter that started out more difficult but improved, eventually reaching a record production level and so on and so forth. In addition, in this quarter, we had another effect. We produced 9 million bbl, but we sold 8 million bbl. We ended up with higher than normal inventory.
This obviously reflects the amount sold, reflects an EBITDA of $276 million, a net income, and so on. A big part of the reason why this sale was lower is that Repsol does more or less one offtake per year, which is its share in the asset. This year, they had their offtake in the second quarter of 2025. You end up selling less because that's exactly the offtake that they are entitled. It's more of a technical issue in the field. It doesn't have any major consequences or anything, but that's what it is. In addition, there were some things this quarter that I think are very positive. We managed to close the Peregrino deal. This has already been widely announced, but we managed to close the acquisition of 60% of Peregrino. We got the preliminary license for the development of Wahoo.
Finally, we're going to, we're already giving notice now for the pipeline support vessels. The Wahoo project is moving forward. We've already requested the LI, the installation license. You get the preliminary license first, and then you get the installation license. We already requested that, and things are going well. We did the workovers in the TBMT field. I already mentioned production and operating efficiency of, well, in Albacora , which has been our Achilles heel, operating efficiency was 88%. We reached in July, I know it's not part of the quarter, but I think it's worth pointing out, we reached 97% operating efficiency in July. It was a quarter of a lot of transition. Many things that we have been cultivating since way back materialized. The license, Peregrino, production, redundancy at the fields, and so on. Finally, we published the third report, our third annual sustainability report.
I'll move on to the next slide, and I'll talk a little about the lifting cost, which we haven't discussed yet. We've already talked about production. I'll speak about the company's cash position and debt. The lifting cost was $13.8. Of course, the main effect here was low production. We posted a daily production of 100,000 bbl, and this production of 100,000 bbl per day corresponds to a lifting cost of $13.8 per barrel. Here, there is a very important specific point, which was the scheduled shutdown of Frade. If we excluded the scheduled shutdown and the return of Frade, we would see that the lifting cost would change significantly as with production. It is an important shutdown. It was a relevant shutdown for Wahoo, and today the FPSO was practically ready to receive Wahoo.
Of course, there was a hiccup in the gas compression module when it resumed operation, but anyway, we worked on the module, we did the upgrade, and when it came back online, it had a little slip, but that has been overcome. We spent some time without redundancy. We had another small failure in the month of now, in August, late July, early August. Now we are back, and we are ready to deliver redundancy. This production issue is not something that worries me. It's a very, very specific thing, and that has a link with the lifting cost, which is also not concerning because it was a very one-off situation. Our cash position today is at $800 million, a little over $800 million. In fact, at the end of the quarter, it was at $870 million.
Today, our cash position at the end of July is already substantially higher because we closed that debenture of $500 million, $530 million, if I'm not mistaken. Although we closed it in the second quarter, the money only came into the account in July. Today, we already have more than $1.5 billion in cash, which is quite comfortable and allows us to proceed with the closing of Peregrino. Net debt over EBITDA ratio is 1.8 x. As I told you in the past, we will reach two times net debt over EBITDA at the closing of the deal. Here, we have already done, two things happened here. One was a divestment. No, not a divestment. It was the initial payment of $335 million that we made without adding any EBITDA.
We are accelerating a lot the Wahoo project to finalize it and have everything installed by the end of the year. Our expectation remains around two times net debt/EBITDA ratio when Peregrino is added to our portfolio and to our results. For me, this doesn't change much because it's very much in line with what we had already imagined would happen. In the coming quarters, we should even see a slight reduction in this item and this ratio with cash generation and so on. Until when Peregrino comes in, the ratio will go up to two times because we'll have more debt and more EBITDA as well. With that, I will stop here and hand over to Francilmar, who will talk in a little more detail about the assets than Milton, and I will come back to conclude the call. Thank you very much, Francilmar. Over to you.
Hello, everyone.
Thank you, Roberto. I will start on slide five with the performance of the assets. This quarter was a challenging one, which ended up compressing production results mainly at Frade Field and a little at TBMT. The others were more or less as expected. I will go into more detail in a moment. At the end of the day, it ended up having a significant impact on our lifting cost, which was compressed, reaching $13.8 per barrel, which is far from our ideal. At the moment, given the challenges, it is the figure we have achieved. I will move on to the next slide, number six, where we will detail the performance of each asset a little more. Frade Field was, let's say, the big deviation from what we expected this quarter. We ended up taking too long on a scheduled shutdown.
We had a scheduled shutdown in April, which gave us about 12 days to do everything, all the planned services, all very focused on the project to adapt the ship to receive oil from Wahoo. A number of things, and we needed the shutdown. During the shutdown, we included all of this scope and a lot related to safety, efficiency, and the ship's production capacity. The big challenge actually happened when we resumed work of failing the compression system. The compressors, we had two complete compressor systems, and one failed, and then the other failed shortly after. This ended up posing a huge challenge for us to get around it, and it ended up taking a few gooD-Days, which basically impacted production a lot during the quarter, reaching an efficiency of 68%. Today, we have a fully functional compression system, 100%.
We ended up having to rush to repair a second compression system that is not yet 100% ready. It is currently being assembled at the unit as we speak. We expect that by next week or the week after, we will have 100% redundancy. That was also one of the reasons why, at the end of last month, July, we had a quick failure in a compressor that ended up having an impact on production, but it's back in operation. The impact was greater because there was no redundancy. The plan is by next week or so, we will recover redundancy and have the Frade compression system working properly. With that, we hope to return to the level of operating efficiency we were used to having at Frade. The decline is now behaving as expected. It's normal.
We return to the normal decline pattern of the field until we are able to resume drilling at Frade Field. Moving on to slide number seven, let's talk about the TBMT cluster. This quarter, we had some positive points. After we received the authorizations and consent for the workovers and for the drilling rig to work, we performed the workovers on wells TBMT 10 and 4. The workover times were very good, by the way. I would say they were the best workover times we've ever had. I think it was a little over 20 days, 21 days per well. The rig went back to Wahoo wells. We resumed production there in early to mid-June. Now, at the end of July, we had the failure of TBMT 6, which is the oldest well we had in operation at the field.
It had been producing for over 10 years, and the pump failed. Now we need to replace that pump. The advantage we have now is that we no longer have approval and consent issues. We already had the consent for all the wells at TBMT Field to perform these routine maintenance tasks. The plan is for the rig to finish a phase at the well it is working on at Wahoo. She will sail over and carry out the operation on this well in August, starting at the beginning of the second half of the month, and deliver the job next month if we take 20, 30 days, which is the expected time to carry out this workover if there are no events, no complications. Apart from this issue with the wells, the availability of both the platform and the ship is very good.
The field continues at its normal pace. Moving on to slide number eight, we have Albacora Leste Field. In this field, we have been working very hard to improve operating efficiency. Starting in April, we were able to add redundancy to the compression system, and this is what has led to improved operating efficiency. We no longer have those shutdowns due to turbine problems or power generation issues. Today, the focus is on improving compression. We have both compressors operating well, so we have greatly improved efficiency. For example, in June and July, we already reached levels above 90%. In July, we reached 97%. I don't expect us to maintain this standard, but all the work we are doing at the company is that by year end, we are installing a new turbine.
I believe that in the short term, one or two months, we will be able to install the other turbine. In terms of compression, by the end of the year, we should install another compressor, and then we will have the entire compression and turbine system, which are the biggest defenders of efficiency, up and running. That will allow us to have better efficiency of the unit to continue a more stable operation. In terms of the oil, we managed to resolve the hydrate that was in well 87, and that improved production a little. Today, we are working to unblock well 84, which has proven to be more challenging. It is a well that has an eight kilometer line. We managed to unblock until about kilometer four, but there's still a longer section that we cannot access today.
We are looking for alternatives to break down the hydrate in the rest of this production line. Today, there's no definite answer, but I believe that in the coming months, we will be able to get around this in a more effective way. The expectation for the field is that we will now have slightly better efficiency and will continue to evolve in search of stability. This is the name of the game for Albacora Leste. Moving on to slide number nine, let's talk about Peregrino Field. For Peregrino Field, we announced to the market this quarter in early May that we signed the agreement to acquire the remaining 60% of the field. We started the transition process, the process that brings us even closer to the asset. We had already been working as a partner in the asset, but now we are intensifying that a lot.
We have already held several meetings. There are several different working groups. We have already visited the units, all four units of the ship, talking to people, understanding, getting to know more. This transition process should continue over the next few months until we have the closing and transfer of the operation to our company. Today, we are working much more on modeling how the field will perform, synergies we will capture, all the resources for the operation to continue the integration with PRIO's operations. This quarter, operations have been very intense over there. We completed an important well on platform C. We started production from that well. At the same time, one of the largest producing wells was shut down due to a pump failure, the ESP. All the wells at Peregrino, just like in Polvo, are wells that produce using electric submersible pumps, ESPs. They do the workovers.
They're currently performing this workover. The well should be back up and running in the next few weeks, I imagine. We will continue like that. The focus now is on the transition, on capturing knowledge and information so that we can take over this field in the very near future. The Wahoo Field now, moving on to slide number 10. This quarter, we had great evolution. We completed the drilling of the well. We obtained the first production well in the Wahoo Field. We achieved the preliminary license to install the subsea system. On the one hand, the rig remains in the drilling program of production wells. We're capturing lessons learned, trying to improve, and it goes. We have three more production wells to drill, then we have two injector wells.
As for the subsea construction, now with the license, we already started the negotiation for the mobilization of resources, pipeline and vessels, both rigid and flexible lines, equipment. This should happen, depending on the installation license that we expect to achieve very soon. At the same time, we're working on this mobilization and negotiating the following steps. In this next quarter, we should see the start of operations at the Wahoo field with pipeline. That's where we're headed. With that, I conclude my part, turning the floor to Milton. Thank you.
Thank you, Francilmar. Good afternoon, everyone. Moving on to slide number 11, we'll talk about PRIO's financial performance in the second quarter of 2025. We sold just over 1.8 million bbl in the second quarter of 2025, which is a value comparable to the second quarter of 2024, when we sold just over 8.5 million bbl.
However, we have an important difference as regards to the price of Brent and our selling price. In the second quarter of 2025, the average reference Brent price was $65.84, with an FOB equivalent selling price of $58.44. We had a discount a little higher than our average over the last quarters because we made around 44% of our sales related to the Peregrino Field, which already has a higher discount. When we compare it to the second quarter of 2024, our average Brent at the time was $85.35 with an FOB price of $82.74. There was a very large deviation in the price of oil, significantly impacting the results this year in the second quarter of 2025 compared to 2024. In addition, we had a cost of goods sold of $116 million.
When we calculate the lifting, it also had an increase of $3.8 per barrel, also explained by these higher sales from Peregrino that carry a higher cost. With that, we reached an EBITDA of $249 million, or an adjusted EBITDA of $275 million, and a margin of 59%. Financial results were approximately $55 million in the quarter. That's closely related to the interest we pay on all of our funding. Income tax and social contributions are very positive. This is largely due to the appreciation of the Brazilian real against the dollar and the impact of this on our deferred tax assets. Moving on to slide 12, we're talking about funding. In this graph of our debt amortization schedule, we see an important change in relation to previous quarters. Essentially, we made two moves.
The first was to roll over a series of debts that were due in 2025, especially 2026. We rolled over to the year 2027, 2028, removing a lot of this pressure of amortizations next year. From the beginning of 2025 to the present date, we rolled over more than $800 million from these commitments. In addition, we have continued with our exercise of bilateral debt issuances with our relationship banks, debts between two and three years, mostly. We raised $470 million of new money in the second quarter, thus reinforcing the company's cash and strengthening our very strong banking relationships, important in times like these when we make acquisitions and manage to go through these moments comfortably.
We note in the graphs on duration and average cost of debt that we not only extended the company's duration, but also managed to reduce this weighted average cost from 6.39% to 6.36%, always trying to look for the best cost of capital or with the lowest cost of capital for PRIO. In addition, we announced in June the issuance of BRL 3 billion of a debenture issuance. There were two series of five and seven years. This is equivalent to almost $540 million at the weighted average cost of these series of 6.59% per year. A very competitive cost, very interesting for a debt of such duration. It's important to stress, as we have already communicated in a material fact, all of this debt is swapped into dollars, so fully exposed to the U.S. dollars in our usual profile. This greatly reinforces our cash.
The inflow of this debenture will take place in the third quarter. The cash was actually disbursed in the month of July. We actually closed the month of July with a cash balance of more than $1.5 billion. That's a very comfortable situation in terms of liquidity and a lot of tranquility for us to honor all of our commitments. Moving on to slide number 13, we have the variation in the company's net debt, which is a good proxy for our cash flow. We started the first quarter of 2025 with a position of $2,448. We have an adjusted EBITDA ex-IFRS 16 of $276 million of generation. A small working capital. We have a CapEx account of $156 million. This is basically explained by the Wahoo drilling campaign, which we are finally starting after the licensing. We also have CapEx related to Peregrino, workovers of two wells in TBMT.
We had a stoppage, a shutdown that we also made investments in, as well as the hydrate removal in Albacora Leste. This explains the $156 million. A super relevant event in this quarter, one-off. We had the payment for the signing of the acquisition of 60% of Peregrino from Equinor, equivalent to $335 million. In addition, we had a small amount in share buybacks in April. An agreement at FPSO Polvo, this amount paid to VW of $40 million from the settlement we had already announced and recognized in the previous quarter's results. The cash payment occurs in this quarter, and the financial result, basically financial expenses, interest, which led our net debt to rise to $2.771 billion at the end of the second quarter of 2025. I would say that the critical factor here that led our net debt to increase was the payment for the signing at Peregrino.
On slide number 14 now, we talk about leverage, and that connects a lot to what was said in the previous slide. We note that leverage froze from 1.3x to 1.8 x, remembering that we have a covenant of 2.5 x. This is still quite far from that. This increase was due to the payment of the Peregrino signing in assets. Although we have generated cash, this signing was relevant, $335 million, and it is important to emphasize that we demonstrate the payment of this signing with cash outflow, but we do not bring in any type of EBITDA yet at this time. We will bring the 12-month EBITDA of this percentage of the Peregrino acquisition at the time of closing.
It is natural that there is some kind of pressure on leverage because we made the down payment, and we still do not have the EBITDA being recognized in our covenants. In any case, it is a value that is well within what we already estimated and totally under control. It is important to reinforce a point mentioned in the previous slide about amortizations. Today, we have a very comfortable cash situation at the end of July, closing at around $1.5 billion. It is very comfortable for us to honor our commitments, considering that we continue to generate cash with our operations, even with the CapEx commitments that we also have ahead. With that, I turn the floor back to Roberto, who will comment on the environment and next steps. Thank you.
Thank you, Milton. I am going to talk a little bit about the environment and society, and then I'll conclude our call and open for questions. We had this quarter our sustainability month. We created Instituto PRIO, the PRIO Institute, which will have the main focus on projects related to biodiversity and environmental education. In addition, this quarter, we published our third sustainability report with the main advances that we had in ESG in the last year and so on. On the safety side, in April, we carried out the campaign that we called Open Kimono and the Safety D-Day, and this is always with lectures, including from the ANP and so on, always with the objective of reinforcing the importance and raising awareness of safety among our employees, both safety of processes and safety in relation to the environment and so on.
We remain firm in our health and wellbeing project, following all of the routines of cardiac checkup of our employees, yoga classes, kickboxing, volleyball, running, volleyball tournaments, trekking, and so on. We also remained firm with our I Love PRIO brand with some events at SBRT and the Rio de Janeiro Marathon. This is a snapshot of our second quarter in terms of sustainability and the environment. Moving on to the next steps and to the conclusion of the call, it's like I always say that first and last topics always remain, which is the focus on the safety and health of employees and third parties and prospecting new M&A opportunities. This obviously always remains. It's part of our DNA. It's always in our agenda and so on.
In the middle there, I think it's worth pointing out where, on top of those two points, where our minds will be in the coming quarters, in the third quarter mainly. The first of them, operational efficiency of Albacora Leste, the asset has been performing well, reaching 97% in July. In August, we'll need to have a brief shutdown, probably 20 hours or so. Maybe it won't be 97%, but it will be a high efficiency. We have to make a stoppage to replace an item there in the FPSO, but what I would say is that things are much more under control. We're finally playing ahead of time in advance. We are identifying items that may be triggers, replacing them, solving them, and so on. I'm glad with the operational efficiency of Albacora Leste. With that said, a strong focus on maintaining this high efficiency.
As for the environmental license, we received the preliminary license. We have already requested the installation license. In this process now, we are the ones who requested from IBAMA. With that, we make a request for the installation license we already have, and we're waiting for that. At the same time, we are already giving notice to the vessel that will lay the pipes. It will be the McDermott Amazon vessel. She's now in South Africa in a shipyard. She should have arrived here in Brazil in September. Everything is moving along so that it works out, and then focusing a lot on the first oil from Wahoo, which we estimate for March of next year. We'll also still hold a PRIO Day in the second half of the year. I promised that once we received the installation license, we would hold a PRIO Day to show exactly the schedule.
It's close. I think that receiving the license now, probably in the third quarter, maybe the fourth, we will hold this PRIO Day to show you exactly the schedule of execution at Wahoo and so on. The other point of great attention is the conclusion of the acquisition of Peregrino. On the funding side, we are already doing well. I would say that all of our funding efforts are practically concluded. As Milton showed, we rolled over several of the debts that were maturing next year in 2026, and we rolled them over to 2027, 2028. We raised funds here in the local market, and with that, the company is practically ready for the closing of Peregrino. With this cash position that we have today, plus the cash that will be generated until the closing, we are virtually ready for Peregrino.
We may have one more debenture, but then it will be a small infrastructure debenture, which we can do by the end of the year. As I said, the effort is done. It's made. There's also the bond that will mature next year. We are prepared to pay the bond off next year and then go on without this international market instrument. My preference would be to continue with this, but then it's a matter of rates and such. If we don't find a window here in the market, it's fine. We'll be without the bond. We'll pay it off next year and be without the bond. If we can issue it again in a situation, we will. Anyway, nothing extraordinary. We're fine. The Brazilian market has managed to meet all of our funding needs. On the Peregrino transition side, things are going very well.
I'd say maybe the ANP approving this by the end of the year would be already ready to at least make the deal close the first tranche. It will depend a little bit on Equinor because Equinor can choose something between the end of this year and the middle of next year for the 40%. It will depend a little bit on Equinor. Anyway, we also heard on Equinor's call that their preference would be to bring forward this closing a little. I think we have everything we need for this to happen, maybe near the end of the year, the 40%, and then the other 20% a little later. That's it. Thank you very much for everyone's participation. I wanted to thank the market, as I always do, and also thank our employees, as I always do.
This quarter was a tough quarter, but the team showed a lot of resilience, a lot of grit. I think it's a quarter that we managed to reverse. We had one of the worst months, that was the shutdown at Frade and so on, and probably also one of the best months when we broke the company's production record. It was a quarter with a lot of contrast between the minimum and the maximum. That's it. I would now like to open for questions and answers. Thank you very much.
Hello, welcome to the Q&A session of our earnings conference call. Now, we will open some time for questions on the chat and live questions. The first from Luiz Carvalho with BTG. Luiz, hello everyone, good afternoon, thank you for the presentation. Roberto and the whole team, if you'll allow me, I have three questions. The first is on Peregrino.
You spoke about the timing of both closings, and perhaps you could give us an update of what we are expecting in terms of cash disbursement, given the timing and the current oil price. What is the operation like in terms of oil discount, the repair of the gas line? If you could give us an overview of the field, it would be great. Second question, perhaps addressed to Francilmar. You mentioned in yesterday's earnings release that you completed the first well at Wahoo with a satisfactory result. Perhaps you could give us more color in terms of what you found there and what you're expecting in the coming wells. What are the challenges that you are foreseeing in terms of the critical path until first oil? Roberto, in the last slide, you talked about safety and you talked about M&A.
Petronas announced that they want to perhaps sell a stake of Tartaruga Verde, and I imagine Bruno is probably looking at the asset. I mean, it's his duty. How do you see that field and having a stake in that asset? Petrobras is the operator. How are you seeing this? Is this a good fit for the company?
Thank you, Luiz. Let's start with Peregrino and speak a little about the closing, the transition, and the value. By contract in Peregrino, it works in the following way. Equinor can choose the date. As long as we have approval by ANP, Equinor can choose the date of closing, with a maximum deadline of July 1st of next year. If ANP approves in December, between December and July, it is possible for Equinor to choose the date for the closing.
The reason for that is that Equinor is developing Bacalhau, and they want to have a good match with Bacalhau. We are working to be ready. Since December, in the beginning, we were more certain that the closing would happen by July. Latest information we received, and also we heard in the Equinor call, was that they would be interested in bringing it forward to December or January. This is not a decision that is 100% ours. I think that ANP will approve this most likely before year-end. Some important steps have been taken at ANP. The first one was the guarantee for abandonment, which was approved, the guarantee for abandonment of the 40% and of the 40% belonging to Sinochem, which we had also requested. Things are happening at ANP. The transition process is unfolding really well. Perhaps one of the best transition processes we've had at the company.
It's a transparent, frank process. I am extremely pleased with the way the business is unfolding. The Equinor team is being very collaborative. You asked about the line. We are also removing and repairing that gas line that was damaged. We handled the super important step, which is removing a part from the bed of the sea that weighs about 88 tons. It's a collector where we connect both pipes, and that part needed to be removed, needed to be brought on land, and it's going to be inspected. It's already on land. The project is unfolding really well. Everything is moving as expected. I guess that between Q1 and Q2, we should have the gas back in the field, as we promised.
With regards to price, let's start with $3.35 billion. That was the initial price. Of this $3.35 billion, we added $150 million, which is the interest cap.
$3.5 billion would be applying to January 1st, 2024. We have all of the 2024 production and the full 2025 production. Considering oil at $60 until the end of the year, it's above that. Let's suppose that the oil price is at $60 and will remain at $60 until the end of the year. The price adjustment of $3.5 billion, the price of $3.5 billion will undergo adjustment. That will take the price to $2.3 billion, approximately. Of these $2.3 billion, we have already paid $335 million on May 1st of this year. We would still need to pay $2 billion for the 60% stake. These $2 billion have to be divided into 40% on one side and 20% on the other. If we close in January, in January, we'll need to pay two-thirds of the $2 billion outstanding. The remaining one-third would be paid later on, most likely in July when we close the 20% remaining.
That's how things are. Everything is moving well as expected. With this price adjustment from $3.3 billion to actually from $3.5 billion to $2.3 billion, we have $1.2 billion of price adjustment. Of this $1.2 billion, at the end of June, we had a little more than $800 million already recognized and agreed upon by the parties because we calculate this monthly with Equinor. Like I said, the deal is being very fair and very transparent. We update them on this every month. For Peregrino, I think it's full steam. Production is well. The transition is doing well. The gas import work is doing well. Discount is doing well. We can speak more about that if you want. It's all going well. High production and everything well, good.
There was a question for Francilmar that I will address because I will kind of limit what we saw at Wahoo. Drilling went well.
We drilled the first well. What I can tell you is that considering all of the variables that we found, we found some things a little better, some a little worse. In a nutshell, our expectation is maintained for 10,000 bbl per day from that well. It won't change, it won't increase, it won't decrease. We had good things that we found in the drilling of this well. Some things were a little bit different than our original plan, but it went well. I guess that overall, it went well. The well that we did drill is well number two. We started in reverse. We drilled first well two, and now we are drilling well one. Well one is the best one, theoretically the one we are drilling now. We haven't gotten to the salt yet.
Unfortunately, we'll have to remove the rig to do some workover at TBMT because we had failure at TBMT 6, which is the oldest well in the field, producing for more than 10 years. It had a failure. We'll bring the rig there and then bring her back. We haven't arrived to the top of the salt yet. As soon as we can, we will do the work with the rig. In the other one, it was not at the top of the salt. It was at the bottom of the salt. We'll remove the rig. It will do the work, and then it will be brought back. It was unfortunate that the well failed. After 10 years of operation, we were betting that it would be the next well to fail. Unfortunately, it failed now. A question about Tartaruga. Bruno is looking into that. This was on Bloomberg.
Bruno is looking into that. There are some important things about Tartaruga. You have to think, there's leverage, but let's forget leverage for now. It's not something we forget, and it's all right. Let's put it aside for just the moment. Tartaruga has two points that we need to study and think about. It is not like Peregrino that to us was a no-brainer. Tartaruga has two points about it. What is being made available is a non-operational part. Petrobras will remain as the operator. We wouldn't have a clear path to become operators. In the case of Peregrino, the path was much clearer for us to become operators of the field. We always thought of Equinor producing at Bacalhau and eventually repositioning their portfolio. This is one thing. There is something else, which is even deeper and more important. Tartaruga, well, the FPSO is not a good fit.
It is a MODEC FPSO. It is leased by MODEC and operated by MODEC. It's not that we don't like MODEC, on the contrary, we admire them. Part of our work is to do that. Part of our work is to own and to operate the FPSO. There is the maintenance plan, caring for the lifespan of the FPSO, etc. That's what we battled with at Albacora, but this is what we do. Here, the question is, what is the size of the upside? Okay, we get to the field. The part of the upside of the field is cutting down costs. If the FPSO is operated by a third party, that limits our ability to cut costs. I'm not going to say there's no chance that we'll get Tartaruga. We're considering it. Like I said, Bruno will look into Tartaruga, according to what was on Bloomberg.
If it ever comes to market, if it's in the market, we'll look into that. There are some caveats there. These two points that I mentioned, and to me, it is not totally clear that this would be a no-brainer opportunity like Peregrino, like Albacora. It is not. That's where we stand.
Clear then. Thank you very much.
Thank you, Luiz. Our next question will be from Gabriel Barra at Citi. Hi, Gabriel. Barra, you may go ahead.
Hello, Roberto. Thank you for taking my questions. I have two. I think the first is more on the financial side. We've been discussing for some time, but looking at the current scenario, considering the potential payment tier for Peregrino and so on, I'd like to hear a little bit about your hedging policy.
You have a more certain flow now for the payment front and in the oil market, how you see that. In this context of hedging and payment flows, we saw that there could be a very robust buyback program, and we're very close to 10% that we saw there. We're always wondering when you're going to cancel or if you're going to cancel the shares and why not cancel and reach the 10% and open a new program, considering the cost of the price of the share that would be good for capital at this time. I would like to hear from you where you're at internally in this discussion. If I may, a more philosophical question for the company. Over time, PRIO has had a very consistent MO, the acquisition of mature fields, better efficiency, reduction of costs, cash generation, and so on over the past few years.
We're getting to a point where you're getting to a production close to 100,000 bbl per day next year. I remember last year we talked a little bit about there was that news, and we talked about how it wouldn't make sense for the company at that time. As you were evaluating more and getting to 200,000 bbl per day, for example, next year, could you start considering maybe again doing riskier things and no longer focusing only on mature fields? I'd like to hear about this in the medium to long term for the coming years. Thank you.
Gabriel, thank you. About hedging, yes, we have been looking at it more fondly. We are actually hedged until September, including September. We have 3 million bbl hedged now for August, 4 millio bbl actually in August, and 3 million bbl in September that are hedged.
Beyond that, you know more or less what our sale is going to be in this next quarter, right? Or at least our expectation of sales in the coming quarter. We are looking at it. Our policy remains the same. We look and hear, and when it comes, we get into the market. When it goes down, we get into the market hedging. When there was that attack, that was an unfortunate event, that attack from Israel against Iran, and then the entry of the United States and so on. We did it. It was a Friday, I remember, that we hedged at the time, June, July, August, and September. The vol was high. It was close to 50 or 40 some, and it was still hedged. We're paying attention. I think volatility going down, oil getting close to $70. We tried to do it now three days ago.
Oil reached $72, but we didn't get liquidity in the market. It was at the end of the day. We're very mindful. We're paying attention. We'll hedge whenever possible. We prepared and continue to prepare the company, and the numbers that I'm providing and closing and so on are for oil at $60 a barrel. Today we're better than our plan stated. We're hedging little by little, and we're trying to capture this. As for the share buyback, we stopped the share buyback 100%. It's a lot of discipline. There's 0.5% of the company to get to 10%, but we stopped. We held back on the buyback. We really did. The prices are very attractive. They're very interesting. We agreed with the board to stop the buyback, and we did. Another agreement we had was to bring to the board once we got to 10%.
We'll bring it up with the board when we get to 10%, and then we'll make the decision. Maybe it may even exceed 10%, and then we have six months to resolve it. That's what the law says. I'm not too concerned with this. Today, we're in the mode of closing Peregrino first. That's what's important. That's what we're focusing on. Once we have the closing of Peregrino, cash generation will be very high, and then we may consider going back. Actually, we will definitely go back and resume buying back, even if it exceeds 10%. This is a discussion that we decided to put on standby. Not the discussion, but bringing this to the board. We put it on standby, and our agreement was that once Peregrino comes in, we stop everything, and we'll talk again later. Nobody's against it, not the board. It's not a discussion even.
It's just a formality. Your final point that you asked about exploration. Today, I think we would have the capacity to explore. What I don't like on exploration is the development of a greenfield, isolated greenfield that we don't really like that very much. You may say, oh, but the company would have the stamina to buy a field and explore. Yeah, yeah, we would. If you think about a well, a concession of a discovery well. Yes, but if you succeed, that's when the problems begin because you have to develop an FPSO. This is something that I really do not want to do. I don't think we're ready. We're still not ready to make this development and engineering, even on the exploration itself, purely, yes. On the side of developing FPSO and getting this such a big deal built in Singapore, China, we're not ready to do that.
The follow-up commissioning, not to do it right the way we would want to do. We could do outsourcing everything, but the way we would like to do it, we're not ready for it. I think we're not there yet for exploration. That's why I said in the past and in our conversation as well, I think that if we consider, if we think about the future, a permanent offer, something that may have a tieback, something that is close by, it would make a lot of sense. Now, going through that, oh, let's buy a block in the Amazonas facing, no way. If you fail, you have a smaller problem. If you succeed, either you're going to have to sell your share with the operation for someone who developed the FPSO, and we won't have it, or we will have to develop the FPSO.
That's where it starts to get into a bottomless pit: the cost overrun, delays, the specification itself, and so on. That's our mindset today for exploration. It's a different business model. Thinking about that, our business model is to maximize the use of what we have, escalating and scaling up from that. If we could make exploration for a subsea tieback, then it would be very welcome.
Excellent. Thank you very much.
Thank you, Gabriel. Thank you. Our next question, Bruno Montanari at Morgan Stanley. Bruno, please go ahead.
Hello, Roberto. Good afternoon, everyone. Thank you for taking my questions. First, a follow-up to a question. The follow-up is, you mentioned that well number two at Wahoo is not the best of them. Still, the expectation is that it will produce 10,000 bbl per day.
Is it fair to think that well number one, the risk return, could be better than well number two?
No. No, no, I'm sorry. Maybe I wasn't interpreted correctly. I didn't say that it's the worst well. The worst or better. According to the location where you have the wells, there are wells that are located closer to the center of the reservoir or the top. Our expectation is that all of them will produce 10,000 bbl per day. It's not a matter of the well's productivity. If you look at the well's specific productivity, well number two could produce a lot more than 10,000 bbl. The problem is that you have to put in such a production that harmonizes with the size of your reservoir.
It doesn't make sense for us to say, oh, if this is the worst, it's not the best, well, then the other one's going to produce more. No, because that takes into account the whole reservoir, and you have to think about the drainage of the entire reservoir. I'm sorry I interrupted you, but I think maybe that was a misinterpretation. It's not that well number two is not good or number one is better, will produce more. No, our expectation is 10,000 bbl. If you look at the well's IP, and that's one thing that's much better than what we imagined. The IP of the well specifically could produce more. If you produce more, you will be overproducing. You will have a depletion that will be harmful to your reservoir. I apologize for interrupting, but I really wanted to make this clear.
Okay, fine. Great. Understood.
I have two more questions, actually. One should be quick. If you could share with us the schedule of shutdowns for the next 12 months for each of the assets, just so we can have it mapped. About M&A, excluding Tartaruga , looking at the industry overall, would you say the M&A climate is hotter or colder for us to compare with the last quarter? Bruno, the last quarter, it was the highest of our history. Okay, no, the last 12 months, anyway, the marginal. Do you believe the market is selling more towards selling, or is it more on standby?
I think it's the same. Bruno, we don't guide ourselves based on M&A processes. We guide ourselves based on what we want, and we go after it. We chase it. For us, the market question, I don't really have that feeling. My view is that it's very similar.
I don't think there's any change if there's more M&As or less M&As. This one of Petronas apparently is coming on, but apparently. This is, for me, it's not an indication that the market will have more asset sales or anything. What I think is that if oil goes to $100, the M&As will probably drop. If the oil goes to $50, $60, M&A also drops. If the oil goes to $100, nobody is going to want to pay the price, considering $100 a barrel forever. The buyer will have a tough time being able to purchase, and the seller obviously will want to sell at $100. If it is at $50, the seller is going to say, I'm going to hold back. Unless they're in a distressed situation where we have to turn on the warning sign. If they're in distress, it's because it's not a good asset.
For me, within this price range from $65 - $85, $80, I think M&As remain stable. I don't see any big peaks up or down. About the planned shutdowns, yes, Francilmar, please go ahead.
The scheduled shutdowns that we have planning is for, yeah, in the beginning of next year, first quarter. It's part of the revamping program to replace a lot of things and improve integrity. Frade, we did now, so we don't expect anything for the time being. Peregrino is stopping now in July. We had that brief shutdown, so there's nothing planned forward. In TBMT, I think we'll have a brief stoppage at the half of the year. Albacora Leste in the beginning and TBMT in the middle of the year. More or less one year, every 18 to 24 months.
Excellent. Thank you.
Thank you, Bruno. Next question by Tasso Vasconcelos with UBS. Tasso, go ahead.
Hello, good afternoon to Roberto and the whole team. I have two questions. A first point that drew my attention in this quarter was the CapEx that was slightly higher than what we expected, either because the projects under development, Wahoo, and also the workovers that tended to be more concentrated in this quarter. How to map these CapEx disbursements looking forward? What are the scenarios that the company is working with? PRIO's gaining more scale. You're getting a lot more wells. Do you see any risk of having a structurally higher CapEx with more maintenance, more workovers? Or do you think that this was a one-off condition? Should we work with a more normalized level in the coming quarters? Second question. I'd like to get your feedback in terms of trading.
There was a fear some months ago that Brazil could be impacted by oil tariffs imposed by the U.S. They were out. Now Trump is talking about higher tariffs imposed to any country that buys oil from Russia. Have you noticed any change in the global trade flow of oil, and from the PRIO standpoint, do you see a challenge in allocating oil to other regions, or is this bringing more opportunities in terms of deliveries and pricing? These are my questions. Thank you.
Thank you for the question. In terms of trading, what happened was that when the threat arose of big tariffs, and there was a doubt whether this would impact Brazil, for about two weeks, the market was paralyzed. There was not a lot going on. Everyone was sitting and waiting. Now that this has been resolved, the market is back and it is flowing naturally. This is it. It's not changing much. Trading stopped for about 10, 15 days while everyone was just waiting to see what was going to happen. Now it's going back to normal. The high tariffs, just this issue about Russian diesel and all. Let's think about the worst scenario. I think that oil, or structurally, the United States should keep oil out of the tariffs because we produce an item that cannot be produced in the United States, which is heavy oil.
They have WTI, which is lightweight oil. Heavy oil that they need, they'll buy from us, from Venezuela, from Russia, Iran, maybe. There are many providers, perhaps a little bit from Mexico, but they don't have many options to buy heavy oil. Perhaps structurally, oil will not suffer tariffs. We sell about 15% of our float to the United States. It's not a volume that would be too hard to reallocate because the United States will need to buy heavy oil from somebody else. They'll buy from somebody else, and we will fill the space left open. There will be some logistics adjustments, of course. To us, thank God, it's not something very, very dramatic. We will adapt to whatever happens in the best way possible. This is how I see things today. This is what we are seeing today.
I don't think that we should be overly concerned about this kind of thing. We'll have to see what's coming. A decision made by the United States is their decision. We'll have to adapt, to adjust. It is what it is. We'll see. It is not something that is raising a red flag or a yellow flag for now.
CapEx. We had a pent-up of workovers at TBMT. We would normally do one workover a year. Workover in TBMT 6, hopefully, it is done. We had the pent-up of TBMT 10 and 4, which failed. There was this one-off. We performed two workovers this month. In Q3, we will perform another one at TBMT 6, which normally we would consider one workover per year. I'm talking about everything except Peregrino.
At Peregrino, we spent perhaps $40 million of our CapEx, perhaps a little over that, a little over $40 million of CapEx, about $50 million. Peregrino is a separate issue. Peregrino has their own workovers, and we also have drilling activities that they are doing. When Peregrino is 100%, currently we have a 40% stake. There will be a structural increase given the Peregrino campaign. This will be reduced because we will adapt this to the way we do the work. There will be a structural CapEx because Peregrino is a field being developed. Ex-Peregrino, no change. With Peregrino, a little more CapEx will be needed. Currently, our 40% stake, the plan was $80 million for the year. We have a CapEx for about $200 million. Our part would be $80 million.
I don't think that Peregrino will perpetually have a CapEx of $200 million, but it will have a reasonable CapEx. The best way for you to analyze this is looking at our certificate of reserves. It should be a little under $200 million, perhaps $100 million, $130 million. There will be structural CapEx because there are wells, there are replacements to be made. That's Peregrino. There's no way we can go around that. We have Wahoo. Wahoo spent $630 million in the project so far, and it is a project of $870 million. We still have this delta to spend. $870 million, I mean, most likely this will be updated during PRIO Day, but it should be close to that.
Super clear. Thank you very much.
Thank you, Tasso. Next question from Caio Ribeiro with Bank of America.
Good afternoon, everyone. Thank you for the opportunity.
My first question, going back to shares in Treasury, which are close to this limit of 10% of total shares. Not considering the option to cancel the shares, would the company consider using these shares for a possible future acquisition, like in a share swap deal? I'm talking about the specific case of Petronas. They did a deal in Argentina involving a swap of shares. Is it something that the company would consider in a possible future deal? Going back to M&A and speaking more about geographic distribution, with the Peregrino deal being completed in July of next year, what do you see as a potential new growth upfront? I understand the limitations of Tartaruga Verde. You mentioned those. Other than that, would there be assets in the Santos Basin that you would consider interesting? Would this be the moment to look at other geographies? Thank you very much.
As for the shares in Treasury, in principle, we could use those for a deal, yes. The reality is that we cannot use these shares because we always think that the price is too low. Today there's a deal. We're not going to use the shares in Treasury because at BRL 40, the shares depreciated in our review. It doesn't make any sense. We would use our cash. Theoretically, those shares can be used for a deal. In practice, it is hard. It would need to be an ultra-accretive deal for us so that we would consider giving the shares at such a low price. I think the shares will be kept in Treasury for quite a while, and then they will be canceled. That's it. As for M&A activity, the way I see this, the big ones in the Santos Basin, of the non-Petrobras ones, have been acquired.
Now we are very much focused on preparing the company for the next big cycle of growth. Of course, there might be something in the short term, medium term. There might be small M&A deals. In truth, we don't have an M&A deal of some billions in the market. For Tartaruga , they asked for BRL 1 billion. I'm not sure it's worth that, but an M&A like Peregrino in Albacora , I don't see a lot of that in the market. There might be some small deals, but we are preparing the company so that in 2027, we'll see what will happen. Perhaps even Petrobras might change their strategy. Perhaps they might want to reshuffle their portfolio. It really depends on the government. I don't know. This could happen.
What matters is that we want to have a light company with one-time net debt/EBITDA ratio, a maximum of 1.5x net debt/EBITDA ratio by... When we're going to be having two times in 2026. We would have 1.5 x net debt/EBITDA ratio by mid-2027. That's our plan. We would generate a lot of cash and be prepared for a deal. As for the geographies, the only one that would be interesting for us, to be candid, would be something in the Gulf of Mexico, Gulf of America, the United States. Nothing different than that. Our view is the same. Everything is the same. We'll continue to look at Brazilian assets. If it could be in the Campos Basin, great. If we find something abroad, it should be in the Gulf of Mexico. The expected return is unchanged. If there's nothing else out there, we'll submit.
If we are not successful, then we will distribute cash and/or buy back shares. It will be a different scenario.
Perfect. Super clear. Thank you very much, Roberto.
[Foreign language]
Thank you, Caio. Next question. Monique Greco, Itaú BBA.
Hello, good afternoon. Thank you for the opportunity to ask questions. I'll ask two. One is a doubt, maybe when you talked about the inventory that, on the quarter. Can we understand that that volume of Albacora Leste is related to the Repsol uptake, or will these volumes then become PRIO's volumes? The second is a request, actually, for an update in the licensing strategy of the next projects, the exploration at Frangi, the area in Albacora Leste. Thank you.
Great, Monique. There's almost one million barrels inventory at Albacora , and it belongs to PRIO, right? It's in our balance sheet. It's ours, confirmed. Actually, when oil goes down too much, and I'm not going to say that we're any type of genius, it's just when you see these extreme downwards motions, we tend to sell less than normally would.
In COVID, we did that, and we were very successful. I won't say that we've been actively done that, but we ended up being okay with turning the quarter with a higher inventory, and we also succeeded. In this abrupt movement of the oil going down, we always try to hold back a little bit. We combined two things here this quarter. We had Repsol's uptake that happened, and we also turned the quarter with a high inventory. If we had forced the string a little bit, we could have sold a million barrels more. What's the pricing you're going to get? Today, we're more comfortable in making sales. The third quarter will be stronger in terms of sales. We should have more than 10 million bbl in sales during the third quarter. That's it. That's how it goes. The second question you had, I'm sorry, about the environmental licensing.
Licensing, now we already applied or requested the installation license. We already had the notice for the vessel. We expect the vessel here in September. Wahoo, I'm not going to say it's completely solved, but it's moving along well. Now we turn back all of our licensing processes efforts to [Coespi]. That's the exploration coordination. Within that, we have the license of the area that we should go in at the end of the year, that we'll get the license to drill everything in the Santos Basin. From today to the end of the year, we have two requests to Ibama that we expect to be successful. One is more wells in Frangi. It's an agreement so that we can drill more wells in Frangi.
Another agreement for us to be able to do some work in Albacora in terms of workover, connection of wells, and so on in Albacora, including Arapusa. These two things will fulfill this period that we expect to be waiting for the regional license that should come up maybe the end of 2026, the beginning of 2027. Imagine that the rig is going to be free and ready for us to use for other projects by the middle of next year. Our work here is to put good wells for the rig in the second half of next year until we get the area license, and then we act on the Frangi wells in Albacora, then more than enough. That's our strategy. We changed it a little bit. We always talked about the area license.
We continue to talk about it, but there are these two that we'll include in inserting the story. Peregrino is a different story, and it's going to move along the fields. They'll continue drilling and so on. It will continue life as usual.
Excellent. Thank you.
Thank you, Monique. Next question. Regis Cardoso from XP. Regis, please go ahead.
Hello. Thank you for this opportunity. Good afternoon. My question about Wahoo. The current status indicates that there's one well drilled until the base of the salt and the other on the top. If you can talk a little bit about what's there, how is the phasing? I had a question, actually, whether you can drill at the same time as you run the, you lay the lines at the same time, or if there's interference. I'd like to understand this timeline a little bit.
I understand that there's a batch of drills that you're doing, right? Roberto, also earlier, you said something about the challenges, maybe. I don't know if you can give us more detail of what type of challenges you're facing that you can identify at the time of drilling. This is about Wahoo and two quick follow-ups. When you talk about hedge, you're talking about Zero Cost Collar , or if you can talk about the BENS. I think that in the beginning, we also wanted to talk a little bit more about the discounts for the oils that we had talked specifically about Peregrino, but if you can talk about the others as well. Thank you.
Wahoo, we have one drill complete, ready to produce, fully drilled. That's well number one.
Well number two, we're just a little bit above the top of the salt, and we're going to stop once we get there to solve that issue at TBMT, and then we'll come back to drill. The batch that we had at the beginning of the wells, the first two phases of the well that we did one the other, and now they go on independently. One well is ready, and the other well is 50%, you'd say? Around 50% ready. That was about the drilling. We could drill while laying pipes at the same time. They're distant. There's no issue at all. Each one of these wells, you learn a bit more, right? The first well is a little bit more here, more there.
It evolves, and the rig does the work in the well, and the lay-in vessel, two teams of vessels laying flexible pipes and rigid, everything is done separately. We will get to a point where we'll have three vessels and the rig operating at the same time. We didn't really have challenges. We drilled within expectations. There's a region there that's a little harder, but it's a lot higher up in the structure. It's a hard rock that is intertwined. It's harder to drill, but it's part of the deal. It's nothing out of the ordinary. It's the reality. It's not that there was an additional challenge. There was nothing. That's what it was.
About hedge, we are on the strike. The strike of September, August, September, do you remember? I think it's $105. Net of the premium that we paid is $75, but the strike is closer to $69.
Strike. Today we have the strike at $69, between $69 and $70, both for October, actually August and September. We only do the, we don't have the zero cost, actually. We only do the put. NDF is also something we don't do. Nothing that has a margin that we can be called on the margin is what we would normally do. Oh, and about the discount. Do you want to talk about the discount?
Discounts, Regis, we are already with all of the third quarters sold two months ahead of time. August and September are already being sold. Peregrino, we continue to improve the discount a little bit. We closed the second quarter with a slightly better average, higher than $10. Third quarter was closer to $8. The others remain in our standard. That's Frade close to $2.
Albacora Leste, more discounted because of logistics and probably a little bit similar to Albacora Leste. I think that's the level that we've been working at for this third quarter.
Excellent. Thank you.
Thank you, Regis. Next question from Rodrigo Almeida with Santander. Rodrigo, go ahead.
Good afternoon, Roberto and the PRIO team. I just want to have a follow-up question on discount. Just want to understand. Q2, or have you seen any change in pricing? I just want to confirm that point because I don't know. I would like to know about Q3.
At Q3, it is $8. At Q2, we sold at $9.80. We started with $10.50, then we sold at $9.80 in Q2. In Q3, the average will be about $8, perhaps a little better than that, but around $8.
All right. Thank you very much. My question is in the context of first oil from Wahoo. The expectation is March of 2027. I'd like to elaborate on the schedule of the startup of the wells. Considering what you've had at Frade with the gas and all, how should we think about the entry into operation of the wells?
All four together or two, and then you will see how the top side behaves because you're going to get a lot of gas from Wahoo. I'd like to understand what you're thinking about the ramp-up of Wahoo.
In March, most likely, all four wells will be drilled, except if there is an unexpected delay. All four wells will be drilled. All three will open. All four will open. We have capacity to open all four operationally. Of course, we are not going to open all four simultaneously. We'll open one and then the second. I don't know. That's micro planning. Operationally, all four wells will be drilled and will have the ability to open all four. In practice, at the FPSO, you don't open all four at the same time. You do the ramp-up of the wells one by one.
If your concern is decompression system, compression capacity nominal installed is okay. The problem we had now was a failure. It was corrective maintenance. It's not that we don't have it and we need to upgrade the system. No, it is there. If it fails, we have to repair it. We currently have two complete systems. I need one. One will run completely for Frade and Wahoo. The second system is a backup. It's redundant. If one fails, the other one kicks in. We do maintenance in the one that fails.
Okay. That's what I wanted to know. Thank you very much.
Thank you, Rodrigo. Next question from Mileni Carvalho with JP Morgan. Mileni, go ahead.
Hello, everyone. Thank you. I think that you've addressed all of my points. I have a follow-up question on Peregrino.
You mentioned that there was this one well stopping because of the ESV pump that failed and that we should have a workover in the coming weeks. I'd like to understand the impact of that on production. When do you expect the well to be back online? The gas part, you have answered. I just would like to know about the well.
You're asking about Peregrino, right, Mileni?
Yes.
Sorry, my phone was ringing. For Peregrino, there was a shutdown of a well called C14. We are producing 100,190 bbl per day. That's what the field is producing. Even with this well offline, with C14, we'll go up to about 107,000, 106,000 bbl, 108,000 bbl. We'll be topping up. You know that is it. Equinor will perform the workover, and it will be back online. There will not be a huge impact.
Instead of producing 41,000 bbl, 42,000 bbl, we are producing 39,000 bbl considering our 40% stake. Peregrino has a number of wells, more than 30 wells with ESV pumps. There will always be a well failing and requiring maintenance. That's why we don't see it's 110,000 bbl. We'll produce 110,000 bbl, and then one well will fail and the production will drop. This is business as usual. Nothing abnormal.
Perfect. Thank you very much.
[Foreign language]
Next question, Gustavo Sadka from Bradesco. Gustavo, go ahead.
Good afternoon. Thank you for taking my question. Just one about Peregrino. You've been for some time with a majority stake. From what you've seen since you're active there, have you been able to see more room for cutting costs or CapEx that you had already estimated when you made the acquisition?
I'm sorry, I cannot hear him.
I think it's on mute. For me, at least, it's on mute. I'm sorry. I apologize. What we had planned, Gustavo, was well planned. That's what we saw now in Peregrino. There's no, oh, there's another huge opportunity. No, we talk about cost reduction, and it's there. That's what we're going to seek in this initially. It's closely related to the flow tile that the campaign will be concluded. It's also related to the gas import that we're working on. Also, cost allocation overhead. It's what's normal for all wells. That's where we're at. We're not doing anything much different, everything's fine. What's always interesting is for us to go in and see if there's a red flag. No, there's nothing. It's fine. The field is good. It's been well operated and so on.
I think if we go there and physically look at things and the overall checkup, everything is in line with expectations. No big surprises, either up or down. Now it's just sticking to the plan.
Excellent. Thank you.
Thank you, Gustavo. With that, we conclude our questions and answers session. I'll turn the floor to Roberto for his closing remark.
Thank you all very much. It was a challenging quarter, maybe that would be the word, but it's also a quarter of transition where we came out stronger. Thank you very much for the support and for your attendance. See you on the next quarter of 2025. Thank you.