- Return of capital program that targets a minimum quarterly cash liquidity of US$50 million
- Development plan targeting average 2023 production between 14,000 and 15,000 bopd
- Anticipated 2023 EBITDA of $220 million at $84/bbl Brent oil forecast
PetroTal has announced a fully funded 2023 capital investment program of $125 million that is expected to generate significant after-tax, pre debt service free cash flow of $55 million in 2023. Combined with the year-end 2022 cash balance of over $100 million, other working capital inflows, and contracted 2023 cash inflows of $57 million from Petroperu, the Company expects to have approximately $240 million of available cash to repay the Company's debt, accrued interest, and initiate a capital return program to shareholders through a combination of share buybacks and dividends. All amounts are quoted in US dollars.
2023 Key Highlights and Objectives
- Target 2023 production growth of 15% to 19% above 2022 levels, equivalent to 14,000 and 15,000 barrels of oil per day ("bopd") with similar associated sales volumes. Should additional sales capacity become available mid-year, the Company may be able to increase late 2023 production to approximately 17,000 bopd;
- Generate EBITDA of $220 million, based on the forward strip price of Brent oil for 2023 (at Dec 30, 2022), representing an average of $84/bbl;
- Drill and complete three horizontal development wells and one water disposal well in 2023, and complete two workovers of previously drilled wells;
- Invest in production infrastructure to support future development and production, including additional oil storage and water injection systems, the construction of a new west drilling platform ("L2 West Platform"), enabling future drilling until the end of 2025 and spending on erosion control for the Company's site;
- Generate after-tax free cash flow (before all debt service) of approximately $55 million, net of an estimated $40 million in corporate tax and related obligations;
- Become debt free in Q1 2023 from full payout of the remaining $80 million in bonds and thereafter maintain a minimum liquidity balance of $50 million, distributing out available cash that exceeds this amount through a share buyback and dividend program;
- Allocate an estimated $7.5 million in social trust payments in 2023 and another $10 million in other G&A related community projects.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
'The approved 2023 budget allows PetroTal to return a large portion of its current market capitalization to shareholders, while still delivering meaningful annual production growth in a tactical way. The Company's 2023 budget uses an average $84/bbl Brent oil forecast, and has the flexibility, should oil prices be lower, to adjust non-core components of its capital program. Similarly, it allows for production flexibility in the event that oil export conditions improve during the year. This will ensure return of capital stability in 2023 and beyond.'
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Source: PetroTal
