Good morning, ladies and gentlemen. Thank you for waiting. Welcome to the third quarter of 2023 and the outcome display. We are here with our executive directors, Marcelo Magalhães, our CEO, and Troy Finney, Operations Director, Rafael Cunha, our Investor Relations , and then Felipe Araújo. Felipe Araújo for Management and Sustainability. Here with us, we have also Guillermo Leal Foucault and Walter Waes, Technical Director, and we also have Virginia Ribeiro, our Investor Relations Specialist. We also have, during this conference, a recording that will be available in the IR website of the company. If you need simultaneous interpretation, we have that tool available with being the icon written interpretation in your lower screen. If you are hearing in English, you have the option of silencing the original audio. By the end of the presentation, we will have a Q&A session.
In order to participate, we ask you to write your question down using the Q&A menu, and when you say your name, you can use your microphone and ask away. If you don't want to use a microphone, please just write, "No microphone," by the end of the question. We would like to make it clear that any declarations that we might hear during this conference regarding the projections and targets are based in beliefs and premises of the PetroReconcavo Directorate, and also information that is currently available for the company. Any future consideration are not guarantees of future developments and risk assessment. We have to consider that this takes into account other industry factors and operational factors that might affect the outcome of the company, different from those expressed hereby.
I would like to pass the floor now to Marcelo Magalhães, director, to make his initial remarks. Marcelo, go ahead.
Good morning, everybody. It is a satisfaction to be here with you. It's a pleasure to have you all here to hear the outcomes of the third quarter of 2023. Once again, starting with a very consistent delivery, which is the characteristic of this company, which is an increment in the average production. Daily average production during the quarter, we have a record of 28,000 barrels in this period, and this is a consistency that is a characteristic of the company.
I think it is about the capacity of our team to choose very well all of the assets that we are using in order to increment the production of the company using acquisitions, and this is very organic throughout the year. This is one of the main commitments that we have for delivery with our shareholders and the collaborators. We have a lot of satisfaction in delivering this increase of about 7% regarding compared to the previous quarter. This is also a reflection not only of the increase in the production environment and the price increase, but also the two main operational indicators, which are our net revenue and EBITDA.
So we had the production, a result of the net revenue in the this quarter, which is related to depletion and non-operational aspects, which have been a negative impact in the net revenue, but this is about BRL 145 million in this quarter. So I'd like to remember all of you that we have a quarter, that we have focused on the message that after the last acquisition of the company with Maha Energy Brasil, we have considered that that was a moment for to look within and to focus more in delivering other gains for internal productivity, and it is I'm very satisfied to say that now we can start to show positive effects of those works that we developed with the reduction of the lifting cost of the company during the quarter.
This is a characteristic of a lifting cost that is more competitive throughout the industry, offshore industry in Brazil. So this is a result of an arduous work by the team. I should thank Troy and his team now, with the presence here of the two new directors in this area, and we have the conviction that this is a trend that will be, will keep along the next few years. There is a lot of impact. There's not for nothing.
There is a lot of reduction in cost, and sometimes you have luck, but we do understand that this is especially the result of a huge effort of the increase of MTBF and also the quality of hirings that we have, because we have less failures, and then we can also direct our assets, both our human resources and material assets, for the increment in production and reserves. So this is something that we have said before to the market during the last quarters, during the last few months. This is something that we have been working on a lot, so this is a huge satisfaction for us to show that this extremely relevant outcome, operationally, has a very constructive bias.
So I would like to say that there is a bunch of other issues that are less important than the lift cost, but I would like to say that we are heavily interested in that. The operational gains in our third-party welding infrastructure, this allows us to reduce in the future, with consistency, a significant cost in developing new reserves, and this will allow us to decrease the stocks of the company, and this is something that we are focusing on as a team, and we hope that during the last, the next quarters, we will see other outcomes like that.
We have many other things here listed on the slides, but t hey also focus a lot on the company, but and they imply something that is very present in the company, something that, for instance, during this quarter, we have had a renewal of contracts, of the main contracts in the company. We have had the maximum time allowed of 27 years of the contract, up to 2052, and with the reduction of royalties. So during the subsequent periods, we have the approval of the extension of all of the fields for the Miranga Polo. We have, for the main fields, production fields, Miranga and also Jacuípe, we had significant results in royalties and also the inclusion of plans for increments in production, where most of the investments have been already assessed by the company.
We have less future commitment with the ANP due to that, but in general, everything is already reducing the royalties in terms around 7% or 8%, with a huge impact in the company for the next decades with the renewal of this contract. In addition, we had the satisfaction of having been entering the Bovespa index for the quarter, and we also have the final steps here with the approval of the General Assembly, reorganizing the shareholders with the company. So that also allows to increase those efforts with substantial improvements of productivity that will reflect in the numbers that we had for future quarters and the future years. So this is a quarter that has a lot of internal victories. This is already a result of those efforts focused in productivity and efficiency.
This is something that characterizes the company quite a lot, and with also the increment in production, of course. We are getting ready to do more and more regarding all of that. It's not like we are done. On contrary, actually, that is something that we are still working on, but especially in terms of gain of productivity and efficiency and new reserves that will allow for increase in production. This is something that we will have an addition for the team, with two professionals, which are extremely competent, wide experience in the market for oil and gas internationally. So I would like to introduce them briefly for you, Guillermo and Walter. These two have joined the team during the last few months, so they are under our CEO. So I'll let them speak so that they can briefly introduce themselves to you. Thank you.
Thank you, Marcelo. Good morning. I'm very excited to be part of this team of leaders and in PetroReconcavo. Just to speak a little bit about my experience, I am an oil engineer, and I have a master's in project management and management in oil and gas, with technical experience in leadership in countries such as the United States, Azerbaijan, and also Egypt and Iraq. As I said, I am very much excited for being here with you and being part of this team and this transformation.
Well, good morning. Good morning to everybody. My name is Walter Waes, and my experience is quite similar to Guilherme. It is a huge pleasure to be here with you in PetroReconcavo. My personal experience, well, as the studies I have, I'm an oil engineer.
I also have a master's in Project Management and also in Renewable Resources Management, and as a professional, I have about 25 years experience in the industry, and I have worked with in South America, more precisely with projects in Argentina and Brazil, and also in Caribbean. Precisely in Trinidad and Tobago, Angola and Mozambique, in this case of Africa, and in the Middle East, I have been in Qatar. So in general terms, my expectation is to work with the company to deal with the plans and the objectives, the targets that we have for our strategy and grow together with the company.
Guillermo, Walter, once again, it is a huge honor to have you all here with us. They have been coming strong here, and for us, it is very important to have this mix of people with experience from abroad, you know, with the international industry, to join efforts with this management team that has been here for a while now. It has been a very tremendous work by Troy, and I'll give Troy the floor now to speak about the operational aspects of the quarter.
Thank you, Marcelo. Thank you, Guillermo and Walter. I think you will be a huge acquisition for our growth in the future. All of us have a great hope and high hopes as to the things that you are going to add to our team. Regarding the operational development of PetroReconcavo during the last quarter, we kept going with our organic growth.
Just like the last few years, we have, just like Marcelo said, we have grown more than 7% since the beginning of the last quarter, and we have been now 27% in growth, in addition to the same period last year. Even with that growth, we have had situations that we identified that would be still a limit to our performance and our behavior in production that might be still better. Specifically, as you can see here, we have a very stable production now, and we have been working particularly in a very important well now, that is the best one as we have, which is the Tiê-5. Which has the potential of more than 500 barrels within the production. Unfortunately, there was a work being done there.
We are continuing our works over there in order to complete it in this location, and with success, we are going to resume the operations there and otherwise, we have plans to have a sidetrack done in there in order to put part of that reservoir in production in early 2029. So anyway, we are going to handle that production, and this is a matter of time in order to have that operational. In our other field, Miranga, we will keep working with our production. We are going to keep optimizing the production of oil and gas, and also with the compression and outflow. So this is something we are going to continue with our projects for de bottlenecking in order to continue with those projects.
The challenges that we face over there is that we are reaching more liquids than we have in the prognosis, so we have more condensed oil and sometimes water. We are doing projects to deliquify or take those liquids out of those wells, and that is a practice that is really well known in the company, and this is something that we have been working on and optimizing those future wells for the many years to come. We just need to reach there with equipment that might help deliquify in order to reach that production of gas. All of the indicators, technical indicators that is, that we are finding there are showing that we have robust reserves there, and the recovery of that gas and oil in that field would be so far very low recuperation.
So that would be a lot of reserves and very good factors in order to optimize those operations there. In terms of backwater there, as part of our operation there, in Remanso, we have the focus of keeping the production there. We don't have many projects for developing those fields over there, and we are more focused in reducing operational costs in order to have the best rentability over there, the best profitability that we might take out of those sites with the production of those many projects for secondary recovery that we have over there. In the area of Potiguar, we can see that we have had a production in the last two quarters, and you can see there that that is the continuation of our work.
Also, with the work over in preparation to what is to come, which is better than our expectations in many wells over there. And we have had, during the third quarter, a situation of ease to feed that production over there in the area, with many concessions over there. This has been solved by the late second quarter to the early third quarter, so this year. So this is a production now of no limitations in the production now. So we are increasing the effectiveness over there. With all of those improvements and the good news that we have over there, we still are suffering with limitations in the potential production in our Potiguar fields over there, due to restrictions in midstream.
During the third quarter, we had to close seven wells and three wells and seven fields there during that time, due to the limitations of the outflow of gas and oil in the midstream. We are still with that potential in many fields in order to optimize in over in Potiguar, to reach to new levels and new records of production in the next months. We are waiting, because I think those limitations will be solved by this month of November, maybe December, and then we would be able to come back to a total potential that we have already in Potiguar. In our service area, with the equipment that we have already during the third quarter, we have optimized the structures of our two fleets for workover.
With the workover probes and then the operation probes, we have new probes coming from the United States. They are coming. When they joined the company, we were deploying the probes that have been rented, and we have put those equipments that are renewal, renewable equipments. They have been renewed in order to perform the operations. We have now 12 workover probes now, and we are reaching the next year with this amount of workover probes, and we are focusing specifically in the improvements in efficiency in those probes. With our own equipment, mobile equipment, and our own personnel, that we can optimize the recovery of reserves and the development of those areas. The same situation goes during the third quarter in the area of perforation.
So this is, we have a Rapid Rig, which is a probe, a light probe for, for collection, that we are starting to drill in the next few months. This probe has been a replacement for our third party that worked during the first quarter of this year, and we are now putting that into deployment during this quarter for the last quarter of this year, to optimize our efficiency and our security, and also in order to reduce the costs for drilling in those, shallow, wells, especially over in Potiguar. In this addition of those two permissions in the fleet for drilling and also workover, we have the implementation of new technologies.
At least here in Brazil, we have been using a tree saver that is such a tool that allows us to use fracking without the probes. So this will free our probes in order to become more efficient and focus in a addition of more production in other works, and still, we will be able to continue our programs for fracking, especially over in Potiguar. So other areas would include the start of the works with the lines over in Potiguar, in order to identify new reservoirs and compression, and the flow that we are producing, and the levels of productions that we already have over there. And this new unit is already working, and especially during this third quarter, and the benefits of those are now very much coming.
Because the benefits of those services in the third party is, especially in this its own market, especially in Brazil, this is extremely high benefit. So we are now using that in order to optimize our cost structure so that we can develop those reservoirs, and within the best efficiency that we might reach here in Brazil. Well, now I will go over for our CapEx. I'll give the floor to Rafael. Thank you.
Thank you, Troy. Good morning, everybody. The first slide here will show the evolution of our CapEx here of the company. So we can see a trending reduction in the quarter here. In the quarter, we have been focusing a lot of effort, as Marcelo said, to optimize both the costs and also the CapEx. That starts to be seen now with this evolution of those figures over there.
It is nice to make it clear, because sometimes people would ask around about the comparison with this and the financial statements of the company. This is the net addition of CapEx. This shows how the assets of the company will be used in its majority to invest, you know, as all of the accounts come into the immobilized line, and then you have the share that is consumed for operations and maintenance. And operation and maintenance, that represents a low, and then this is the net value actually seen in the investment activities of the company. So we can see here a reduction that is quite significant in the part of development of new reserves.
I think that is the first result of this substitution of third-party probes for our own probes in the company. So this is a reduction in cost associated to that, and also a criteria for optimizing projects, and so forth, and so on. The more fixed assets as well, that also represent a reduction in the right-hand side here in the costs. We have here São Roque, which is the unit for processing gas and oil in our production of about 400,000 cubic meters a day. This reached the São Roque Station, and now this is in the final process of installing and conditioning. And then we have the PR-21 probe, which is the light probe that Troy mentioned, that is also in Brazil now, and it is already ready to operate.
The administrative part here has also shown a reflection in the lower of the cost. This is a kind of a turning point for the company, and this is one of the initiatives to reduce cost, and CapEx has also been a bigger utilization of the materials that we have in the company. The part that we have for the stocks and the assets that have been used for many drilling operations that are now not operating to Petrobras, and now we are trying to recover this kind of asset, this kind of material. This is something that ends up representing a lower consumption of new material, but that is completely temporary, let's say, and this will be seen during the next quarters.
This will be reverted in positive inflow, cash flow for the company, as long as we've reduced these values in stocks. As we have seen, the entire movement of acquisition of probes and equipment for more volume have been done already, and so we only have to acquire the PR-14 probe now, the deep probe, which is being refurbished over in the United States. So that is a positive trend now in the company in order to reduce those development costs of our reserves, and that goes through the optimization of CapEx. I'll give the floor to João to speak about gas, and then I'll speak about more finances.
Thank you, Rafael. Good morning, everybody. Now, I have here the flowchart here of our gas system, and I'll update you about both the commercial aspects and the logistical aspects of this delivery over the quarter. So we have some news here. I think one of the main important facts is the signature of the company, of the gas, contract with Copergás now, which is the second biggest consumer and the concessionaire for natural gas over in the northeastern region of Brazil, and this makes us establish currently a contract relationship with six of the eight distributors interconnected in the TAG system. Some of the highlights of this is that, first of all, it repeats the model of the last contract we have signed with Sergas, which is the Sergipe company.
For the last 10 years, this makes a perspective of not only providing, but also pricing for the next period. Just like the previous model, we have a contract that is a ladder of evolution of prices, which shows the increment in production estimates up to the peak of production, which is estimated to 2025, 2026, and this contract goes to 2033. So this is a contract that shows maximum and minimum prices. It is linked to the Brent price, which is dollar per million. So this is a minimum and maximum price, which works for us as a hedge, and then that will assure a pricing that is very attractive for natural gas during the next years, and the volumes that will add up, as long as we sign new contracts, of course.
Another characteristic of this is that it starts to substitute the contracts, the initial contracts that we have signed still during the year of that change in the model of the gas legislation. So we have new contracts that have been finished now, and they are coming to the end. So we believe in the possibility of migrating to new contracts with more deadlines, with more attractive prices, and that makes our our mix of natural gas has. It will have a better perspective than we have nowadays. So Rafael mentioned that, but we are now in the final steps of construction of the São Roque Station. So all of the installments are there, everything is there, all of the gear, the assets are there, the measuring system, transferring systems are all there on site.
We are now doing the fine adjustments, and ANP has allowed the regulatory procedure for the operation. We hope that will take place during the next few months. So that will be the authorization to process and pass natural gas over through São Roque, and then deliver that directly to the area of Bahiagás, which is generating a lot of competitiveness, and also with the distributor that we have a good commercial direct relationship with, with the natural gas sales. But we also have the condition to sell that over in the free market once the Bahiagás is accessing many industrial consumers, and they do have the scale to migrate that to the free market of natural gas.
When we migrate a little bit to the Potiguar area, we go to the rationale of using UPGN Guamaré . We had, Troy mentioned that we had some restriction, the restrictions that have been lasting over the next, the few, last few quarters, and we had some restrictions regarding that. And over the last quarter, we have had a limitation in the volume of natural gas transfer, so this is still going up to the contract with the proprietary company for this asset. And after the conclusion of that program's halt for the mid, mid-November now, we hope that we won't have any more restrictions for the drainage now, and also wait for it to flow again within its full potential, and then we will have the volume that Troy mentioned as being repressed right there. Next one, please.
Now, just mentioning a little bit of the impact, the estimated impact that we have for the third quarter. We have had some issues regarding the flow and sales of oil and natural gas, especially over in Potiguar. We have mentioned a little bit of natural gas, and I will get into the details now. We have up to 600,000 cubic meters a day over there, and in a few moments, due to the swap system that we have built with 3R, we managed to drain more natural gas, but that was before the power plant was there, so that way, we would receive that in another delivery point, which is in Bahia. So that allowed us to increase the volume for some periods of the quarter. The volume that was not produced was then part of...
That would be incremented as the burn and the disposal of natural gas, especially for the associated gases, and also the non-associated gas, and of course, the wells would be halted. But we estimated a revenue that, for the third quarter of BRL 27.9 million, and that would be, especially that volume that was not produced, and that would be multiplied by our average price in the current contracts. And again, that would go up to the end of November, or whenever that influx would happen to UPGN Guamaré , so we hope to come back to producing that natural gas. And now looking at oil, we had some during August and September, we had some restrictions associated to upkeep of the assets over in Guamaré.
So initially, we had a request to receive oil, and that made us set up logistic alternative routes for it that we have been studying before, and the company always because we had some contingency plans, and they did work quite well. And we had to stop some drillings, as we mentioned before, but much more due to a strategy of increasing autonomy of tanking for the system of the work stream, so that we would have more time to travel with trucks, and in this period that we had more criticism, in the more critical period, rather, during this process. So that was associated to the impact of production in the third quarter.
That had an increase in oil production, but that was stored in the tanks, and that was not sold up to the end of the period, and that was something that we had to recalculate in BRL 25 million. We had the temporary interruption of some of the drilling fields and associated to the strategy of increasing autonomy, and for that production, it didn't happen, so we estimate the value of BRL 9 million. So it is important to say that both for the end of the semester and in the month of September, and also the subsequent periods, those restrictions for oil didn't happen. So now we will detail that quite a lot in the report that has been published yesterday.
Now we have the access to the terminal of the asset, and now we have this situation of halt in the refinery, but we now reduce the logistic and commercial aspects to destine those productions from the start of the program, the problem, and then the expectation is, of course, when the operation is resumed, we will have the full access and the original conduction, conditions for the contract and the logistics that has been established before. I'll give it back to you.
Thank you, João. Well, speaking a bit of the financial aspects now, moving on. First, the great news from the quarter, which is the evolution of the lifting cost of the, the, the company. Of course, we had a lower cost compared to our peers in the market, around $13 a barrel.
So we have the reduction now of 10%, about 10% over in this quarter, specifically of $12.15 per barrel, so this would be a huge increase in the, a huge improvement, and that's also regarding some components. Of course, we had the reduction of the cost of repairs. Marcelo mentioned that during the opening remarks. We also had the synergy capture and also the operational efficiency. We have incorporated the operations from the SPE, the hub that is being reduced, and we have refurbished the contracts and all that. So we had many gains there as well, with associated costs in the incorporation of that asset in the company, and of course, some gains in scale with the growth in production of about 7% on average.
That would be a relevant share of the cost that is, more or less fixed, so we managed to control that in a way that would be translated in a gain of scale, and that ended up being around $215 in the quarter. So, as Marcelo said, that is something that we started to work on before. That was recently started, so we are now getting the results of that. But of course, this is an objective that we are still getting after, so we are still not comfortable with this level, even though it is the benchmarking here in the offshore in Brazil.
But, we intend to bring that even lower levels, especially when we think that we are going to capture more gains with the production of the, has been production- projected here on, and, some other initiatives that we can also perform in the next, few quarters. So something that we see immediately now is in part of the electrical power. We have the transferring of the, all of the, electric bills for the company. We have now the process of, purchase of energy in the free market. The prices are quite lower now than the average, the historical averages that we had. So we have this great opportunity of having these initiatives in reducing the lifting costs here for the future. Next one, please. Now we have here the, the RE. That is, just an overview.
In the front of revenue, João said a lot about that. We had about 14% growth each quarter. So, considering that math that João showed before, we had the potential, of course, in revenue, to go to a little bit under BRL 50 million if it wasn't for the limitation of the part of oil and gas, of course. In terms of costs, I will detail that in the next few slides, so I won't get into much detail. For royalties, of course, Marcelo said we had an opening. We had the perspective of a reduction of royalty due to being an average-sized company.
We lost that characteristic now over this year, and with the extension of concessions added to the concessions that are coming with this reduction of royalties over the incremental production, the perspective here on is to come back to a scenario of, again, getting reductions in our average acquisition of royalties now associated, especially to this issue of incremental production over a base curve that is regulated by ANP for each field. So this is a good perspective that we have for the future in terms of the reduction of average prices for royalties.
Now, mentioning the financial results here, we have each quarter we have—in the last quarter, we had a reduction that was positive and now has been negative, and this is mostly related to change in the quotes for currency, and that is associated to the U.S. dollar. We have some variation there due to the market, our market shares in the company being, having, suffering some liability, and then we had some negative impact in the third quarter. Again, this is mostly due to... This is not mostly with non-immediate, immediate effects, and actually, the increase in the price of the U.S. dollar for the company is good because the entire revenue of the company will be turned in U.S. dollars.
So this is compensating more, more than compensating any variation that we might have. Another highlight here I should mention, just to talk about taxation. We have many efforts now optimizing the tax revenue here and for the income tax of the company, and now we have a lower now, and this is the result of many initiatives. The main one I would highlight now is the use, a stronger use, let's say, a more intense use of something that is used by this sector, which is an accelerated depreciation. So you can accelerate that normal rate 2.5 x more. So we have been using that more intensively as a benefit for the company.
In the practice, of course, this will translate into more of a low in the cash revenue and taxation over it. So you have that to pay that in the future, and that is a counterpart, of course, but in terms of free cash flow, it is very beneficial for the company. I can also mention income tax. We have concluded the societário operations here and the reorganization of this shareholding. And one of the objectives would be to eliminate any inefficiencies that we might have in terms of service providing and also in terms of the probes, for instance.
You might have to give an invoice for the services and all that pre-company, and also in tax revenue, because we might have some damage in some companies, and the other companies might have some great assets, and you shouldn't—you wouldn't be able to recover from it. Now, the idea is to eliminate this kind of situation and discrepancy, so it ends up translating into a lower taxation and more profitability for the company overall. Now, zooming in, the costs, we have now an opening for the costs here. We have many lines here with significant reductions for the crew here in the company. We had a reduction due to more aspects related to costs, which are non-recurrent during the second quarter of 2023.
That was, we had the payment of P&L, so, we had the reduction of some costs regarding the demobilization of some of the folks here in Brazil. So we opted for a more normalized stage during this hiring of personnel here. So for services and materials, we had a huge variation. We had many efforts here regarding, especially the third-party contractors especially. That has shown some result, and also the costs that have been mentioned before, that was something that also added to that figure right there. In terms of purchase and gas swap, that has been better structured in terms of the interruptions for supply in our Potiguar asset. So during this quarter, without the need to buy gas from third parties, we managed to negotiate with our clients in order to lower our delivery for the period.
We reduced that need to buy gas from third parties. And João mentioned that with this programmed halt from UPGN Guamaré, we had now this perspective of negotiating with the clients, and now, in principle, we wouldn't need to buy gas from third parties in order to supply those contracts. The more positive variation, I would say, has been associated to the inflow and transportation of gas. Even though we had some restrictions now in terms of the delivery in Potiguar, we had an increment of the. A significant increment in terms of the third quarter. We had some more deliveries, and that has been translated into more revenue for gas, and that's good.
So in terms of specifically transportation, the increase of volume was accompanied by a situation that was a bit different regarding some penalties that some of the people would call that packaging, you know, an overcharge of gas over in the TAG system, that might generate some kind of penalty. And we had some more sales costs associated to the logistics of transportation by truck. In some circumstances, that would involve the sales to other clients, and also that modality of sales in the Potiguar asset over in our terminal. Speaking now a little bit of the hedge now, and we, as you know, you have a bunk of hedge in oil that we still have, reminiscent of that time there was a government associated to the financial of Forquilha. So those granting contracts have been maturing progressively.
We have reached the reduction in that amount that was left for the company, and we can see that we still have something close to the value of 4,000 barrels for the day, but per day for the fourth quarter. When we start to project next year, the last amount that we have is, if I'm not mistaken, is September, October next year. We are getting into a situation that is, this hedge position will have less of a relevance in the results of the company, of course, especially those hedges in the lower prices of about $67 a barrel on average, which have been estimated during the pandemic. In terms of the flow, cash flow and, and net debt, we have that was a very good position of the company.
We have here in Brazil, a good leverage that is lower, very comfortable actually. Our net debt has been more or less stable over this 0.5x-0.6x the net EBITDA, so this is about $144 million, and that's the period that Marcelo mentioned. It wasn't on the slides, but most of our payments regarding acquisitions have been done over this year. So we can see for the next year, we will have less of a weight for the company that has been associated to the acquisition of assets that would be lower than that last year. So July, August, we had payment, which was quite relevant related to the Bahia acquisition, and also the extension of Riacho da Forquilha .
The second installment has been done. So those payments would be way lower now, and we have this bank debt with three to five years now in the company, with around $186 million, and the something that we still have to pay, which is about $120 million, but it will be distributed over time. So the remaining installments are from Miranga, especially, that has been an acquisition during the pandemic period, so we have distributed that over time for the payments installments, and we have some charge associated to that. And also we have some more acquisitions in Barra, but that's a lower value still. Now I'll pass on to Felipe to speak about ESG.
Well, thank you, Marcelo.
That has been a very intensive quarter in terms of ESG. I would like to highlight something that is related to our commitment to safety and the safety agenda, and the engagement that we have with our collaborators. We have included a training for leadership, for more than 100 leaders to be part of this leadership chain. This has a huge importance in terms of propagating the culture of safety. That is very important for us. More than 900 collaborators that represent now about 60% of the collaborators that have been enrolled in the PetroSaúde app, which is something that we use to follow the daily lives of our indicators in order to understand mental health and physical health, and integrity of our folks here. We also have some preventive actions going.
We have implemented the tool to allow us to identify preventively, using tests of attention, and we can identify risks of hazards and accidents, so we can avoid accidents. And for the second year, consecutive year, we have a play with PetroFit, which is something that we do with PE. So this is to promote health and also the integration of folks within the company. So we had a record adherence here of around 400 people taking part in that activity for almost three months, every weekend. So that was really nice to promote not only health, but also internal integration, of course. We have in the environmental agenda, we have a lot of focus in the communities, of course.
We have the enrollment of people from the communities in order to participate and get to know what we do. We had also a play for the environment. We had the recycling of more than three tons of recyclable residues. They have been converted in costs for power of the schools that took part in that activity. Then we followed with the partnership that is with the Tamar Project. We have had more than 5,000 children that visited, made a tour over in our facilities with biologists and also guides for environmental education. In our internal agenda, we followed with our diversity, equity, and inclusion programs. We call it Together We Are More, Juntos Somos Mais.
Those activities are for debates and actions in order to increase the agenda, to improve the agenda of equity and inclusion. Everybody who takes part in that are candidates to participate in that group for affinities, that will promote more and better relationships in the affinity group. So we have gender, LGBTQ+, and then we have people with disabilities, and then the valuing of the racial diversity, ethnic or racial diversity, diversity. The other highlight I would like to show is the lactation room, and also the literacy and inclusion capacity workshops. And now for the second year, we have now, second consecutive year, we have the Clean Company Award that we have had from the Ethos Institute, that is promoting actions against corruption.
Well, I apologize, I had a problem here on my sound, but Felipe, thank you so much for your remarks on ESG. That is something that is very strategically relevant for the company, and I'm very much interested in that. And your collaboration and strengthening of this culture has been extremely significant for us. Thank you so much for your service in this area. The pictures in the slides are beautiful, especially that canoe in the Todos os Santos Bay or in Rio, that is in Bahia. That is a very much characteristic of this company. It was beautifully done. Now, in the final remarks, I would like to highlight once again the consistency in the delivery of organic growth in the production of this company.
I believe, once again, we have the certainty that the choices that we have made a while ago now, such as the verticalization of the company, and also operating with our own probes, and the choice of assets within the investment programs within Petrobras, and also the team that we have, which is a great team, and they are more and more capable of working. All of those factors have been extremely important for us to have that delivery consistently, and we will keep doing that more and more in the future. Even if I highlight, as it is the case during this quarter, the impossibility of trying to reach all of our targets because some of our—those external issues with outflows and transportation.
So as Rafael said, and I, I highlighted that in the beginning, our benchmark in terms of costs and lifting costs also has a relationship to what I said before, you know, the choice of assets and the capacity to have a great internal team for development and, an HR team that is very strong. So the expectation for the future, not only in terms of scale, but also in the, in the amount of productivity, especially now with the rationalization of our fleets, which are our own fleets, now in-house fleets, it will allow, us to reduce even more costs for OpEx and also CapEx. And this is something that has been put forward by the market during the beginning of the year, which is the cost of development of the future reserves of the company. So this is in the process now.
This is a benchmark of the certain stabilization of our internal fleet for services, with the delivery back to, with the third-party, probes and with more productivity. Now, we clearly notice that in the drilling areas, and also the operation of internal equipment, that is showing levels of higher efficiency and productivity than we've seen in the market around. We have seen that with third-party drilling operations as well during the first months of the year. So I would like to also highlight something that is very important, which is the UTG São Roque, which is an equipment that is already on site, just waiting for the authorization from ANP. This will be able to process a huge deal of the production of gas over in, in the Bahia.
So, that will be with costs that are way lower, and that will allow us more, once again, more margins for profitability and gas, and great contracts with the addition of Copergás that João mentioned. So I think despite some obstacles that we had internally, the quarter has been very solid. So this is an increase, a very consistent increase in all of the positive trends, and targets, and KPIs that we hope to see in this company more and more sustainably. In addition to all of those issues with ESG and commercialization, culture, and actions that we always consider very important, and something that we also have shown progress on significantly during the last few months.
I will now pass on the floor to Kuruvilla and the folks over to IR office, in order for us to address the questions that we might have.
Thank you, Marcelo. Let's start the Q&A session now, and the first question would come from André Vidal from XP. Go ahead, André.
Hello, good morning. Can you hear me? Perfectly. Okay. Thank you for this opportunity of asking questions. My first question would be about the potential M&As, and more specifically, if you can detail about some more information about the contract with Maha in the stakes over there. And if you have that, if this deal does not evolve in the future, what do you expect as an impact for the PetroReconcavo operations? And the second question would be, I want to know if you have any figures that you might share about potential changes in the next report for reserves that you might disclose next year.
If we think about the alteration of total volume, and also for the curves, curves in the last, in more of a short-term, 2024, 2025, what can we expect in terms of delta for CapEx or, what have you, in the levels of production? Can you share anything? That would be great for us. Thank you.
Can I suggest Troy to start with that, and then you can speak about negotiation, and I will close with the impacts? Troy, go ahead.
Obrigado, Marcelo. Yes, thank you, Marcelo. André said that this is already in the process of being completed now, and we have been working now with our certificator, of course, with the process of production, of course, that we have the prognostics for now in the end of the year. This would have a level of reduction for next year based in the 2B, so this is something that we had prognosed five before in our previous report. The total results are seems still to be from very robust, and it's been growing in many areas that we have been developing now, but the final numbers are still not yet published.
This is about a generation of initial indicators that are still going in line, so this is in a year our hope for the future is to have all that happening within the next year.
What is that spec?
Well, starting Marcelo, first M&A in general, I think we have made it very clear that after the acquisition of the Petrobras assets and the acquisition that we have made of Maha Energy Brasil , and this company has been looking within. Of course, we are still structuring and looking out, of course, and looking for growth, inorganic growth. But I would say that in general, we now are going through a phase of, just like Troy said before, we have now a plateau in terms of the operation and workover and also our equipment. And of course, naturally, that vertical strategy will open the flanks for us to operate M&A in a more, with a more charac... With a different characteristic now, and I mentioned that before, and I'll mention again.
Due to having our equipment, we can drill, be it for us or with partnerships, we can end up developing a model for farm-in and also in Working Interest and more installments of acquisition. So we have been structuring with Troy and the teams for operation and development of new businesses. A model then allows us to, of course, if you have the possibility of having available equipment, to seek new opportunities of that nature, and then naturally, if they are attractive to our portfolio currently in the investment, we will get after them. Now, talking about the 3R and UPGN, I mentioned already that we have an intention of migrating from the current model.
For the contract now that we have for natural gas processing in the Miranga, yeah, this is, has been denied in the transaction that we had with the 3R Petroleum, with Petrobras. So this is a contract that is still with the price premises that we do not consider sustainable for the future. So we are very pragmatic about the models that we have for UTG São Roque, and also the model that we have been studying from Miranga, which is a processing model that is our own. And we show that we can build and monetize the investment, of course, with substantial values that would be more and more attractive. So we believe that it makes sense to have a transaction like that. We have the discussions that have been very positive with 3R.
But of course, we have to have a convergence, and if 3R is satisfied with the value transition of this asset, and if we also are satisfied with the value for acquisition and operation in the future, we can assess whether or not it makes sense to keep going in the future. We have been keeping the both options open, so we assess both very carefully, and we understand that we do have the possibility of having an agreement with 3R, but they are the proprietors now of the plant, so theirs is the final decision. Marcelo, you want to comment? Well, yes, one of the things that I mentioned before many times is when I joined PetroReconcavo in 2008, I quickly learned how the oil and gas industry benefits from intense collaboration between companies.
So, you know, the lending of equipment and helping each other due to the problems. With 3R, we have an excellent relationship. This has been a very active relationship during this passing of the torch, especially of the Guamaré asset. For them, this has been permanent dialogue, and I think so far we have seen this dialogue as very productive. But the companies have parallel activities in the two main offshore bases, especially Rio Grande do Norte state. The assets from each company now are sections of what has been before with Petrobras, so they had a natural synergy between the two operations. And I am convinced that the collaboration between those two companies has everything it takes to create value to both. And the non-collaboration, of course, would damage both sides as likewise.
I think we are in the same boat, really. I think collaboration has to bring gains to both parties, and we have to precify the cost for dealing with gas, which should be competitive, and this should be dealt with the midstream structure by 3R, in a way that would de-incentivize what we can consider to be damaging for us in our own structure for processing gas in Rio Grande do Norte . We are quite advanced now in the project of the UPGN, complementary to Bahia, and this is a project that is following all of that model of FEL, when you have the gauges, and then you have the— This has been very much commended by the Vilaça in our council here. This is a work that has been, once again, very well carried out by João and their teams.
This shows us how the our own UPGN structure might be extremely competitive in Brazil, and this is a project that pays itself, pays for itself really quickly, and we come from a very high cost to costs that Troy knows very well because he is operating a plant like that in the activity of Colombia and Peru. And he has been there in Colombia and something there with our shareholders. That will decrease the cost significantly and increase the margins for profitability. So this is an alternative. It's not the best. The best one is, of course, to collaborate, and we are still in conversation with 3R regarding midstream. And we see again that the collaboration would generate gains both ways for both parties.
I would just like to make it clear that when Troy spoke about the reserves, I would like to make it clear that we read whatever the market shares with us, and within the process of elaboration of the reserves report for December 2023, we have been much more meticulous in a broader addressing the issues of costs, and also being very selective in the launching of projects that might have more costs associated to them being activities that the company is still not carrying out, and less awards for reserves by certificators due to the problems that we have over there.
So we are being more selective now in the future in order to show when those projects are going to be added to a reserve report in order, due to the maturity of the company now in these projects, both in, in terms of costs for execution and also in the acknowledgement of those reserves that now, are now being worked on. So I think this is something that Walter is going to to work on, especially in the next few months. We have the expectation now for the end of the year now to address many of those concerns that we have, that they have brought us from the last report.
Thank you, Marcelo. Just, as a follow-up, if I understand yours, what you said, we can expect a negative review for the CapEx here when we see the report now and occasionally with some penalty in production, and then perhaps with a view to, considering the price of renting and the increase in NPV. Is that it?
Well, we are in the process of, as I said, we have the directives that they're bringing us, and I think you have to wait a little bit further to have access to those figures. When the report is effectively ready and done by the whole management team and discussed with the council.
All right. Thank you, Marcelo. Thank you very much.
Thank you, André.
The next question is from Pedro Soares, from BTG.
Good morning, Marcelo, Troy, Rafael, everybody from the team here. I have a follow-up from the previous question, then another about the inventory investments. Regarding the UPGNs in Rio Grande do Norte discussion, we would like to know what would be the threshold of timing for this to be decided. What is the... When does uncertainty about the choice made by the 3R start to limit the production, the transportation of production in a level that is not satisfactory enough for you to decide that you are going to pursue another model? So if you can comment a little bit about the timing, it would be interesting, and about the investments, the inventory investments. I would like to hear a bit about the issue of evolution regarding that.
Over time, you know, in the last call, we had a discussion about the expectations of those investments to start to be normal now again, starting in this quarter with a certain stability. So if you can share a little bit about how much we should start to see the deliberation of cash flow in this line of CapEx, that would be very much interesting. Thank you.
Well, João.
Yes, I can start here. Good morning, Pedro. To respond to your question, to answer you about the timing, I think I can show that naturally, 3R has done the closing now, I think, 120 days here in the Potiguar hub, and, a great deal of that discussion that has been very much positive now, from our view, but that has been associated to the conditions of, having the proper split in the cost structure and how the UPGN will run, you know. So we have to understand how to operate that plant in a possible agreement. And with those premises, it will be hard to assess whether or not that is a good deal.
So we think that facing that period that we have been through now, and due to the first big moment of need to upkeep and review of the systems, now we are able to have a more mature conversation, and that starts to get into a convergence, but at least with more established figures. So that shouldn't take longer, much longer, that is. And another drivers that we have had an original contract signed with Petrobras, it lasts, I think, 2.5 years, and it goes up to half of next year, mid-next year. So I think it is interesting for us to convert that from the partnership model into a review, so that the prices and the benchmarks, the world benchmarks, will be reviewed, et cetera.
So an important piece of information here is that e ven if we are here now discussing the efficiency aspects, the cost of midstream, we don't see any perspective of limitation nowadays. You know, we have the, in terms of processing capacity. Even if we don't have our own plants, Rio Grande do Norte has a lot more capacity to process now in the hands of 3R than the local production itself with plant number three, which is operating nowadays. It has a capacity to absorb incremental volume. Both company will state that in their reserve reports nowadays, but we have other plants as well, which are in a situation of additional volume and investment, so that will create a more, more of a capacity of assessment.
Yeah, not to mention that the biggest user of UPGN is PetroReconcavo, even more than 3R, right?
Yes, that is correct, and now we are. This is a very important client nowadays for the plant to run. This is a huge partnership now for natural gas. We have a swap contract, which is very important now for them to have natural gas upstream, you know, and before with a plant for gas. And the more volume you have, the more dilution of the fixed costs you will have, and this is better for everybody involved. So I think that makes sense for both parties for us to reach an agreement, and I highlighted that to characterize that this is about a relationship of interdependency and not dependency. The solution for both parties is collaboration.
Rafael, can you address the issue of results again?
Yes, sure. I would just add that in terms of the UTG and in terms of the operation of the plant, by the end of the programmed halt that we had for November, this restriction that we had, about 600 cubic meters a day, will not be anymore. So yes, this current restriction is much more related to the compressors of charge. As I said, this is not a hardware issue of the plant itself, so with that maintenance, we wouldn't have that bottleneck in the entrance anymore.
The problem would be, so to speak, the applied tariff, right, due to the restriction in production?
Yes. Now, about talking about the inventory, we are very much confident that this new cycle will come to a consumption of inventory and not incrementing the inventory. This should start now, and I believe strongly that this will start in the fourth quarter now. For the third quarter, we have seen some of the things that happened, that was in the detailed analysis, the lead times for the company have been on average 120-150 days from the deliveries and in the provider. So we still receive many requests that have been put now from the beginning of the year, but we have been closely watching the amount of requests that have been put.
Now, the value has been falling now quite a lot in the last few months, and so the timing has been overcome now, and the volume for entrance would be, I would say, in the stock, reduced. So it starts to be reduced right now, and it will reduce further. In the third quarter, we had more of a consumption of material that was lower than normal, let's say, due to the mobilization of probes and the recovery from drilling, and also the operations for drilling over in Potiguar and then Bahia, and then we went back to Potiguar. So that was a period for lower consumption than normal due to those activities in drilling, especially due to those deployments of probes.
We also started in a more significant way to optimize costs of the projects and also to reuse materials that have been used by the company. So this has a side effect that is temporary in the reduction of new materials, but this is something that we will see positively, actually. That's something that we have a turn on in one or two times of the use of materials and assets. But of course, that goes through the dispersion tests and guaranteeing that the material is in good quality, in good condition. So this is one of the elements that we see in that equation to reduce costs, both for CapEx, also for, and also for OpEx.
Again, those fields that are very mature, they have an amount of wells that is in the field and also equipment that is a huge amount, and then you can also deploy a huge effort to use those equipment to go through inspections, reconditioning, and then to make it available again in stock to use again in lower costs than the new one. So this kind of exercise, I think, would bring even more value for the net revenue of the company.
Thank you. Thank you, all of you.
Thank you, Pedro. Next question from Rodrigo Almeida, from Santander. Rodrigo? I'll move on to the next one from—Oh, Rodrigo's there.
Good morning, I apologize. Good morning to all of you. I would like to come back a little bit about the discussion on Potiguar and about the strategy of sales for oil and the implementations that you're doing, and how do you perform the strategy, how do you behave there in terms of the oil and the price of oil? How do you see this definitive solution? Because we understand that the refinery is not necessarily coming back immediately, so, I would like to understand what do you think about when you look forward?
Because I think the main point here would be to understand what are the applications that you have for gas, oil and gas, right? If you have any restriction or difficulty in selling oil in a way or another, so what can we see in the effect of, the gas production over in Potiguar as well? And the second thing is, about the, financial effects that that might have for you, and how that can influence the reduction of costs.
And I think perhaps try and understand timing of how it can operate, and the influence that it might have in other investments that might be similar, which is something I would like to know about. And the third question would be about the probes and your own probes. You said that the cost would be about 23% lower than the third parties. Can you share with us any other way of any other price per barrel or can you specify more about the reduction of costs? I think that would be about it. Thank you.
I think it started with you as well. Well, starting with Potiguar oil, I think just giving you an overview, what we have developed, which alternative routes is not only a an export model, but also we have distributed the production quite a lot. We have the more autonomy to deal with the better relationship with water and oil, so we have had that rationale. But that was not only through the maritime operations that we have last developed the oil. We have used routes in Bahia and Alagoas. It's a bit more complex, but I think the operations team and the commercial team has been able to assure a commercial rationale that would put that in practice, you know, a view for contingency, operational contingency.
We can use oil, or if we don't have the full conditions to the industry asset, be it to refinement or the water terminal. After we didn't have any more restrictions in any kind of receiving of the Guamaré industry assets, due to the temporary halt in the refinery, Clara Camarão, we have practiced sales for spots, which has been done with internal refiners with costing, and that has been close to what we have assessed before from the market. So if you have a constituted model and it is working, and you have the refinery, whether it is operating or not, we have a sustainable asset, and you can, you are able to insert sales of oil by chart. So the takers of that oil have demonstrated a lot of interest.
Be it selling in Bahia, they had their own charge, and they, we had discussions with local refineries and external players. This will bring us a lot of options. You know, I think it is important that we have an eventual strategy, a possible commercial strategy from the part of the operators of the refinery that is not competing with our possibility to produce oil. I think in our view, we have a commercial contract that is established, and then we have logistics routes that are alternatives to a short run, of course, and the. If we have the perpetuation of situations that are not the, let's say, ideal current situation, we might develop other routes that would be optimized, and the preoccupation in that case would be to use the logistics.
And of course, this is the quality is great, and the challenge would be to make the value by the head of drilling operation as best as possible, and we have been using these routes quite a lot. So speaking, can you, Do you want to, do I add something, Marcelo?
Not really. I just wanted to state that we are, we're hoping, of course, to start a kind of a oscillation, of course.
And then we had a contingency plan, which was quite structured for what we were going to do, and it has been implemented. And I would say that our view for this is that we managed to minimize the financial and operational impacts in the quarter, way better than we expected.
And this brought us this perspective that, if we needed to transform the contingency, something more definite, more definitive, we should do that, and we would do that very well. Well, going a bit to Bahia and speaking about the gas structure, the idea is to have it all ready by this year. This idea is to make some adjustment. We have some approval rituals that should take days during ANP. So this is basically associated to the custody points, and when you measure natural gas that is entering the system, and the authorization for operation itself, and if it all happens within the deadlines, this should be available to process gas still this year. So this is something that is already in existence.
Now Troy is producing gas from the fields in the Remanso hub, São João, and also Miranga as well, and Biriba, and São Pedro, and all of them are converging to the São Roque station now by using compressor stations. So, we managed to provide, to direct immediately all of that natural gas, and the immediate benefits are the cost reduction. We don't have more volume associated to the contract of service providing. As I mentioned, in Bahia, this is better, the pricing is better, the average pricing, but it is way superior to the natural gas as well. And we also have another initial cost that will go into new contracts that we are going to sign, that is the fact that this is directly linked to the distribution network.
So this makes that it makes the cost of transportation lower, and I think it is very substantial now in terms of the forming of the price of natural gas. It doesn't go into the domestic production and delivery, so that makes the final price better, and it increases the margins for natural gas production. And this is a model that has been working quite well. We have learned a lot with this project. Marcelo has mentioned the strategy, that is, the measurement for the hiring contracts with Bahia. This will be inspiring for them as well. They will copy that and replicate that model in a bigger scale. So that is in a unit for natural gas processing.
More specifically for the bigger volume of gas, which is associated with Miranga and the other fields, and this would be interlinked in the market. In the case of a plant like that, the philosophy would be a more complete plant that would be separating gas and GLP, and also better yields of natural gas, and lower operational costs, which would be more competitive. So I think those projects will... I would believe that they would generate a lot of company, a lot of value for the company. Thank you, Rodrigo. Oh, the last question was about the strategy for their own probes. You know, we didn't have a number for $ per barrel, right? Over in the slides, we would say about 23% as a difference in cost, but we see that the benefit is way bigger than that.
The main difference would be about the productivity of the equipment and the time it takes for, you know, the drilling. Also when we have a third-party probe would do that in five days, that would take, like, nine to 10 days to execute, and that went to that order of magnitude. And that would replicate also for the part of the workover probes and the integration of wells. And I would try to make an exercise here to check the price for per barrel in order to check for the market. But I'd like to say that it's way more than the cost saving here, and the use of the probe is way more about the downtime and productivity. It's much more beneficial to the execution of projects.
More than that, you know, is the importance that you have when you have all of the people working and walking together in the same with the same objective, be it with a an operation drilling probe or whatever service that is, everybody has that main objective: to be the most efficient as possible, to do that in the proper time, with a cost for development of reserves, which is the most efficient as possible. So the skill to motivate that and to make that interrelationship of those elements and optimize that to develop those reserves is critical.
You know, this is part of the qualitative part that brings direct numbers to the market, and this goes for the area of safety and also efficiency, and by the end of it, the reduction of costs in order to develop resilience in the company, and the actives, and the assets.
Thank you, folks. Thank you very much. Have a great day.
Thank you, Rodrigo. Next question from Leonardo Marcondes from Bank of America.
Hello, good morning. Thank you for taking the questions. I think I have two questions more about the part of production here. C onsidering all of those limitations that we have been seeing now in the infrastructure for the other companies that have been getting in the way, you know, considering that all of those limitations are going to be over now, what can we expect once it happens in terms of production for the short run? I mean, I imagine that once you have, the end of the restriction, you can reconnect many, many wells in the next day, right? But what can we expect, like, in the next months in terms of the increase of production from your part?
And also thinking about the long run, or the medium term now, what do you foresee in terms of production for the end of next year? Because we imagine that all of the smaller scale of production that was expected for the year will end up bringing the level of production up, right? If you could quantify a little bit of what can you wait for in the short run once you have the end of those restrictions, and what do you wait for for the end of the next year, so that we can understand the ramp-up of the curve that we can see in the short to medium run? Thank you.
I think, Leonardo, this question goes into an anticipation of information that we generally don't give that out, and we don't anticipate the future productions, I think. I think João mentioned the fact that, due to the restrictions we had, in some cases, the decisions for the productions that have been with greater results, those wells might be readily resumed, and that always brings a little bit of an increase in PSW when you have the return of those wells and operations.
Troy mentioned the presence of liquids as well in the production for the gas wells in Miranga. Those things can be addressed in with a broad deadline. You know, we have a certain expectation of having about 10% of our production now being retained with the bottlenecks, with internal external bottlenecks, and this will be under the KPI potential that we were hoping for. So this is something that would go for the short run.
When you use the restructuring, of course, that is something that we can foresee for the market, the volume of investments and the expectations in production to the end of next year. This is something that we couldn't really share, but right now, the most prudent action is to only talk about a potential of around 10% below that expectation in the complementary production. If Rafael or Troy want to say something more, I think you should be at ease to do that.
I completely agree, Marcelo. This is something that is more or less the figures that t his is the potential of those fields. If for many reasons with that, we have now having some bottlenecks within our own operations, and on the long run, you have a very well-defined history of the growth here.
So we have now adding around 18%-24% in the production. And our schedule, our program is to have more services, and we have the prognostic of having rates that is around the existing rates now.
So I think regardless of the result, the final results and the report of reserves, in the future, I think the expectation is to continue doing what we are doing right now, so far, and to continue that history very strongly, you know, with organic growth and with the focus in those times and for the future in optimizing our deficiencies, our our flaws, and then structuring our capital.
That is perfect, folks. That really helps a lot. And just to ask one more question, you know, I think I would say that we have a reduction in costs, and with the follow-up those restrictions, I think we should have more reduction, right? Also, because we have an increase in production, right?
I think Rafael has commented about the issue of power that you are looking at in order to increase the indicators. W hat can we say that is below potential nowadays?
I don't, I don't think I would use that word, you know, below the potential, but I think we, we see an objective of certainly next year, with the current plan, would be to have that fall next to close to the level of 11. That would be more of a short-term objective. And around the teens, you know, that would be a good thing to have. That also, of course, depends on the exchange rate. We have been suffering a little bit with the dollar when it is below expected during the last quarters.
But in overview, in general lines, I think we are going through the level of a level up to 11 to 25, and then around the 10, 10s.
Yeah, perfect. Thank you, everybody. Have a great day.
Okay, Leonardo, the next question is from Tasso Vasconcelos from UBS.
Hello, good morning, Marcelo, Troy, Rafael, and all of the team that is here. Thank you for this opportunity. I think I have two questions here. First, about the allocation of capital. We have discussed the possibility of M&As and how the company has been focusing more internally after the acquisition of Miranga and also Maha. And, Rafael, in the last quarter, we have discussed the possibility of dividends for next year.
I remember that wouldn't be maybe the focus for the short run, because we will still have some payments of some installments. I would like to go back to this topic and try and update, how do you think for the next year, and how do you think about the timing, and what should we have in terms of opportunity in M&A, for the next, run, you know, for the short run, actually?
And what is the forecast for the next few months, and how do—what is the rationale in terms of retaining more cash and, or deciding, opting for more direct remuneration of the shareholders? Another question is in terms of this, the share organization. I think in terms of qualitative data, it's clear, you know, the simplification in general is very clear. But do you have any kind of study that you can share quantitatively? I would like to love to have that.
I would say that I think the company doesn't have as a philosophy to keep cash for the possibility of M&A. I think we have always the possibility of financing. We have a very low leveraging, so this gives us huge space to operate. In the case of a big acquisition, we can discuss the offer in order to talk about this issue, but we might have a good acquisition, for instance. But in terms of dividends, I think our current thought is just like last year, we are reaching the end of the year, and we have the fiscal optimization that we have to discuss with the Council for Administration.
We have something that is associated to JCP, and now considering that we have a possible change in legislation in the future, the company has a possible outcome that is, might be, relevant and that wasn't very used in the past. So we have discussed a little bit the concept of eventually, as we did last year, to have a declaration for JCP payment now in the end of the year, and r eaching April, May, we have the general assembly, and then we have the outcomes being disclosed. Then we would have those dividends being complementary. So the macro view, I would say, that next year would be with we have lower acquisitions. The production has grown significantly already, and the price of oil has been kept in a healthy level.
We have a rig volume in the company that has fallen quite a bit. So we see next year, in principle, as a very strong year for cash flow generation in the company. If we talk about the CapEx, I think we can see the relevant midstream in the gas, you know, both for the construction of a plant in Bahia and also the negotiation associated to Rio Grande do Norte. So I think it could be some CapEx that would be out of the curve in the sense of being not directly in the reserves. But our current view is, since we have a low leverage in the company and the midstream investments, and building a plant is very much the basic, it's foreseeable in terms of cash flow.
This has the potential of all being financed, with debt, I think, potentially, if those investments go for further, and that wouldn't bring a negative impact in terms of cash flow for the shareholders. I think that is what a bit of the mindset that we have been working on with now, in terms of dividends and capital distribution. Oh, yeah. About the subsidiary organization, I think there is a part that is easier to measure and another one that is harder. I think, I would focus in the intercompany service providing taxation, and I think that, it has been, used a lot in Potiguar, SPE, and Rio Grande do Norte, and all of that. We end up, giving, invoices and COFINS, and also ISS, and other taxes.
The other part would be more of an administrative cost when you have the... We have businesses, and you have to audit each company, and then you have legal persons that you have to audit all the time, and et cetera. So that has a cost associated to that, and I think the order of magnitude would be about BRL 15 million, more or less right now. Another gain that is harder to quantify is especially because we are, we're in a moment of high prices of oil, and this is this was more of a potential risk of having many companies, one with profit and another one with damage to the profitability, of course, and losses. That would be, in terms of taxation, that would be really inefficient potentially.
So we are mitigating a problem that might happen, especially due to lower prices in oil, that might bring that kind of situation of having a company with losses and another one with profit.
Very clear. Thank you.
Thank you, Tasso. Next question from Gustavo Schroden from BBI.
Hello, good morning. Thank you for taking the question. This is more of a question about the... I noticed that during the last time, you mentioned that you had approved for drilling, that would get to Bahia, and I would like to ask whether you have that already. Did you receive it, or how is it now?
Thank you, Marcelo. This probe is a deep probe, and 1,500 HP and this is around 5,000 meters, and this is in the pilot phase in the United States, and I think it is in testing still, and it is now programmed for the, As an exception to Brazil. I think it is not coming to Brazil until the second quarter of next year. I think we will have some services here in Brazil in order to to tend to the norms in the Brazilian legislation. So I think we are trying to get that up to May.
Just to make it clear that the light probe is ready to operate, but the company can eventually decide against using that asset or using another asset. With the necessary, the use of a probe of each type will be according to the understanding of available companies for projects that we find interesting, that we might want to prioritize. Exactly, Marcelo. I apologize, just now the company has two probes for our own in position to operate.
Very clear. Thank you.
Thank you, Gustavo. The last question is from Bruno Amorim from Goldman Sachs. He wants me to read that. "Is it possible to pay BRL 600 million or more, assuming the current levels of renting in 2024? This would bring the company to double digits of dividend yielding, considering the current levels."
I think it's way too early to anticipate the discussion of values. I think we had... You know, the year is not even over, and we didn't approve the budget, and we didn't have a deep discussion about that with the council. So I think it is possible, considering the projections we have internally. I think it is possible, but it's too early to have any commitment towards that sense.
I would say that, it is possible, and I think it is even desirable, you know. We would like to have that with lines of the dividend payment, but of course, that depends on the options that might be available for the application of those resources.
And with that, we would end our Q&A session. Marcelo, your final considerations, please.
I apologize, I was mute. I would like to say thank you to all of you for your questions. I think once again, we have been here, in front of you, trying to deliver and managing to deliver consistent results. They might be better, but I think they are really good. The overall condition of the consistency, again, I insist, is the consistency of the delivery of production.
And, we can untap that potential in terms of better transportation and better outflows and better conditions to operate, and that brings us the perspective of sustainable increments in the future. Once again, thank you so much to our new, two new directors that have been in this call today, and they will have, they will play a very important role in the next few months. Thank you very much. Have a great day.