PetroTal Corp. - Q3 2023 Operations and Liquidity Update
16/10/2023 07:00
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RNS Number : 1500Q PetroTal Corp. 16 October 2023
PetroTal Announces Q3 2023 Operations and Liquidity Update
Quarterly production of 10,909 bopd in Q3 2023
Exit unrestricted cash liquidity of US$94 million on September 30, 2023
Calgary, AB and Houston, TX - October 16, 2023-PetroTal Corp. ("PetroTal" or
the "Company") (TSX: TAL, AIM: PTAL and OTCQX: PTALF) announces the following
operational and corporate updates.
Q3 2023 Production
PetroTal achieved production of 10,909 barrels of oil per day ("bopd") in Q3
2023 and is currently producing around 12,500 bopd. Production was lower
than our guided 13,500 bopd as it was negatively impacted by lower than
expected river levels that reduced barge capacity for the Brazil route
exports. On a year to date basis ending September 30, 2023, the Company has
produced approximately 14,040 bopd, which is inside full year production
guidance range.
Alternative Sales Route Update
The Company is pleased to announce the commencement of its pilot oil sales
shipment through the OCP Ecuador pipeline ("OCP") in early November with the
support of the Ecuadorian government. PetroTal plans to sell 100,000 barrels
of crude into the OCP for eventual arrival at Esmeralda's port. The route
involves approximately 1,000 km of river travel and approximately 115 km of
trucking to the OCP terminal and will eventually generate similar netbacks to
the Company's Brazil and Iquitos routes. The Company has also completed the
contracting of service companies that will carry out the pilot shipment and
trucking to the OCP terminal. PetroTal estimates completion of the shipment
prior to the end of 2023, subject to the outcome of logistical activities that
are being tested. In parallel with the OCP pilot, the Company is
investigating other possible options for material sales route expansion.
Q4 and Full Year 2023 Production Guidance
River levels are lower compared to the 2022 dry season and will continue to
impact October and November 2023 guided production levels. This will delay
the Company's estimated production ramp up and as a result, the Company is now
guiding Q4 2023 production between 14,000 and 14,500 bopd and full year 2023
guidance now near the lower range of 14,000 to 15,000 bopd assuming the river
levels recover in December 2023.
Operational Update
The installation of the L2 West Platform is underway and expected to be
completed near the end of October 2023. PetroTal expects to commence
drilling well 16H in early November 2023 with first production estimated early
in 2024.
PetroTal's other main sales route, the Northern Peruvian Pipeline ("ONP"),
continues to be shut down. The Company expects that once the Talara refinery
is fully commissioned and running as planned, there could be progress towards
reactivation of the ONP. Additionally, PetroTal notes that Peru's Public
Ministry has taken action and captured members of the criminal group named Los
Crudos, that had been involved in pipe cuts that sabotaged ONP operations for
the past couple of years.
Cash and Liquidity Update
PetroTal exited Q3 2023 in a strong position with approximately $94 million of
unrestricted cash and $19 million of restricted cash for a total of $113
million. Restricted cash includes amounts reserved for the social trust
funds to be deposited at a later date. The robust cash position supports
future returns of capital to shareholders in the form of regular dividends,
special dividends and share buybacks. During Q3 2023, the Company purchased
5.6 million shares at an average price of US$0.55/share pursuant to the share
buyback program, and paid dividends of US$23 million (US$0.025/share) on
September 15, 2023 related to Q2 2023 operations. Accounts receivable of
approximately $67 million are contractually current, with accounts payable of
approximately $55 million, primarily due within the next 50 days.
Q3 2023 Webcast Link for November 13, 2023
Please join the Company for its Q3 2023 webcast on November 13, 2023 at 9am CT
(Houston).
https://stream.brrmedia.co.uk/broadcast/650d4b6b39ad9f961be9caad
(https://stream.brrmedia.co.uk/broadcast/650d4b6b39ad9f961be9caad)
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer,
commented:
"The Company is pushing extremely hard to meet guidance in 2023 despite a more
severe dry season seen compared to last year on the Peruvian side. When
river levels permit, the field is capable of producing in excess of 22,000
bopd, shipping monthly volumes to Brazil of 600,000 barrels (~20,000 bopd) and
well over 60,000 barrels per month (~2,000 bopd) to Iquitos until we get our
other sales initiatives commercialized. In addition, we will begin the pilot
to the Ecuadorian OCP shortly, which will activate another 2,000 to 4,000 bopd
of regular offtake when normalized and optimized. Subsequently, by mid 2024,
we expect to activate the Yurimaguas route which could add up to 5,000 bopd of
additional sales capacity.
PetroTal remains in a strong financial position. With $94 million
unrestricted cash and $19 million of restricted cash, we will continue with
our plans to return capital to investors via dividends and share buybacks for
the foreseeable future."
ABOUT PETROTAL
PetroTal is a publicly traded, tri‐quoted (TSX: TAL, AIM: PTAL and OTCQX:
PTALF) oil and gas development and production Company domiciled in Calgary,
Alberta, focused on the development of oil assets in Peru. PetroTal's
flagship asset is its 100% working interest in Bretana oil field in Peru's
Block 95 where oil production was initiated in June 2018. In early 2022,
PetroTal became the largest crude oil producer in Peru. The Company's
management team has significant experience in developing and exploring for oil
in Peru and is led by a Board of Directors that is focused on safely and cost
effectively developing the Bretana oil field. It is actively building new
initiatives to champion community sensitive energy production, benefiting all
stakeholders.
For further information, please see the Company's website at
www.petrotal-corp.com (http://www.petrotal-corp.com) , the Company's filed
documents at www.sedar.com (http://www.sedar.com) , or below:
Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101
PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 20 7770 6424
Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / James Spinney / Robert Collins
T: 44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
T: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton / David McKeown / Georgia Langoulant
T: +44 (0) 20 7418 8900
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This press release contains certain statements
that may be deemed to be forward-looking statements. Such statements relate to
possible future events, including, but not limited to, oil production levels
and guidance, including the ramp up and resumption of shut-in production. All
statements other than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always, identified
by the use of words such as "anticipate", "believe", "expect", "plan",
"estimate", "potential", "will", "should", "continue", "may", "objective" and
similar expressions. Without limitation, this press release contains
forward-looking statements pertaining to: the appointment of an additional
director during the forthcoming year; expectations surrounding disrupted barge
logistics and the consequences in respect thereof, including in relation to
the Company's ability to maintain production at about 22,000 bopd; effects of
the illegal blockade removal and release of oil convoys in respect of overall
safety in the Loreto area; PetroTal's recommendations and expectations
surrounding furniture negotiations with AIDECOBAP and future social fund
allocation decisions. In addition, statements relating to expected production,
reserves, recovery, replacement, costs and valuation are deemed to be
forward-looking statements as they involve the implied assessment, based on
certain estimates and assumptions that the reserves described can be
profitably produced in the future. The forward-looking statements are based on
certain key expectations and assumptions made by the Company, including, but
not limited to, expectations and assumptions concerning the ability of
existing infrastructure to deliver production and the anticipated capital
expenditures associated therewith, the ability of government groups to
effectively achieve objectives in respect of reducing social conflict and
collaborating towards continued investment in the energy sector, including
pursuant to Acta, reservoir characteristics, recovery factor, exploration
upside, prevailing commodity prices and the actual prices received for
PetroTal's products, including pursuant to hedging arrangements, the
availability and performance of drilling rigs, facilities, pipelines, other
oilfield services and skilled labour, royalty regimes and exchange rates, the
impact of inflation on costs, the application of regulatory and licensing
requirements, the accuracy of PetroTal's geological interpretation of its
drilling and land opportunities, current legislation, receipt of required
regulatory approval, the success of future drilling and development
activities, the performance of new wells, future river water levels, the
Company's growth strategy, general economic conditions and availability of
required equipment and services. Although the Company believes that the
expectations and assumptions on which the forward-looking statements are based
are reasonable, undue reliance should not be placed on the forward-looking
statements because the Company can give no assurance that they will prove to
be correct. Since forward-looking statements address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not
limited to, risks associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production; delays or
changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections relating to production, costs and expenses; and
health, safety and environmental risks), commodity price volatility, price
differentials and the actual prices received for products, exchange rate
fluctuations, legal, political and economic instability in Peru, access to
transportation routes and markets for the Company's production, changes in
legislation affecting the oil and gas industry and uncertainties resulting
from potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; changes in the financial
landscape both domestically and abroad, including volatility in the stock
market and financial system; and wars (including Russia's war in Ukraine).
Please refer to the risk factors identified in the Company's most recent AIF
and MD&A which are available on SEDAR at www.sedar.com. The
forward-looking statements contained in this press release are made as of the
date hereof and the Company undertakes no obligation to update publicly or
revise any forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by applicable
securities laws.
OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or
sales in this press release mean "heavy crude oil" as defined in NI 51-101.
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