PetroTal has provided a 2026 guidance update. All amounts are in US dollars unless stated otherwise.
Key Highlights
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Target average 2026 production volumes of 11,750-12,250 barrels of oil per day (“bopd”);
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Capital investment of $80-90 million, allowing for the resumption of development drilling at Bretaña by Q4 2026;
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Annual Adjusted EBITDA of $30 million at $60.00 Brent, supported by significant reductions in operating costs and run-rate G&A expenses;
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Similar to prior years, PetroTal has designed its capital program to maintain minimum unrestricted cash liquidity of $60 million.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
'We recognize that our operational challenges in 2025, specifically rig availability and production reliability, have impacted investor confidence. PetroTal’s 2026 budget is a direct response to that feedback. By moving to a third-party drilling provider and deferring non-essential infrastructure spend, we are prioritizing liquidity over near-term production growth. While the decision to suspend our dividend was difficult, this budget confirms it was necessary to navigate the transition through 2026 without compromising the long-term value of the Bretaña field. Bretaña continues to offer competitive economic returns at $60.00 oil prices, provided we make the necessary improvements to our cost structure. Our investments this year will help set the stage for PetroTal to restore production output to 20,000 bopd next year.'
2026 Guidance Overview
PetroTal’s Board of Directors has approved a 2026 capital budget of $80-90 million, of which approximately $18 million is carried over from 2025. Key components of the capital program include:
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$45 million for drilling, rig mobilization, and well facilities, assuming completion of two development well at Bretaña by year-end 2026
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$16 million for essential operational continuity projects at Bretaña, including upgrades to camp habitability and safety
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$15 million for capitalized investments in erosion control at Bretaña, with an additional $18 million of project expenditures included in opex
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$10 million for other projects, including upgrades to Bretaña water handling facilities, Ucawa field infrastructure, and exploration activities
These capital investments are expected to support 2026 annual average production of approximately 12,000 bopd, consistent with the indicative production forecast PetroTal provided at the time of Q3 2025 financial results on November 13, 2025. Similar to prior years, PetroTal has designed its capital program to maintain minimum unrestricted cash liquidity of $60 million, a strategic choice that balances the need to absorb known, non-recurring expenditures while maintaining flexibility to re-accelerate activity as production and cash flow visibility improve.
Operating Strategy & Drilling Update
To ensure the execution of the 2026 drilling campaign and mitigate the scheduling risks encountered in 2025, PetroTal has initiated a tender process for a third-party drilling contractor. The Company expects to select a contractor by the end of Q1 2026, targeting a spud date for the first development well by October 1, 2026. This well is one of two wells planned for 2026 and represents a continuation of the development plan contemplated in PetroTal’s YE2024 certified reserve report, which includes eight remaining undeveloped 1P locations and eight undeveloped Probable locations. The strategic shift toward a third-party drilling contractor enhances scheduling certainty and operational reliability as PetroTal works to resume its development activities as quickly as possible. While the 2026 budget includes capital for two Bretaña development wells by year-end, the broader eight-well program will continue into 2027, with the goal of restoring the field’s production to a capacity of more than 20,000 bopd.
Consistent with the move to a third-party contractor, PetroTal has determined that the Amazonia-1 rig is no longer required for its near-term development plan. The Company has begun discussions with the rig’s leaseholder to negotiate an orderly exit from the current leasing arrangement. PetroTal’s 2026 budget guidance includes conservative provisions for various costs associated with the termination of the leasing agreement, with major assumptions supported by independent third-party estimates. Management expects to provide an update on the financial impact of this transition, including any necessary settlement costs and the subsequent marketing of the asset, once definitive agreements are finalized.
In order to facilitate production capacity at a sustainable medium-term plateau of 20,000 bopd, PetroTal is committed to investing in continued expansion of water disposal facilities at Bretaña in a profitable manner at a range of oil price assumptions. To that end, PetroTal’s management team and Board of Directors continue to evaluate plans to increase fluid handling infrastructure at the Bretaña field over the 2027-28 timeframe. However, PetroTal has elected to invest in production capacity first, in order to generate the cash flow necessary to fund the infrastructure expansion.
Production & Sales Guidance
PetroTal’s 2026 production guidance of 11,750 to 12,250 bopd is in-line with the low-case scenario presented with Q3 2025 financial results on November 13, 2025. Assuming the Company successfully sources a third-party drilling rig by the end of Q1 2026, the expectation is that it will be available to resume development drilling at Bretaña by October 1, 2026. With that in mind, production additions from new development drilling in 2026 are unlikely to have a material impact on 2026 average production guidance. PetroTal has accounted for a number of contingencies in setting 2026 production guidance, incorporating scheduled downtime to proactively replace electric submersible pumps (“ESPs”) and production tubing in wells at risk of failing. Given the high productivity of Bretaña’s wells, PetroTal has been placing the ESP’s higher up on the intervened wells so as to reduce power consumption and cost of future replacements.
2026 sales guidance assumes 100% of Bretaña production is sold through the Brazil route, as PetroTal fulfills minimum volume requirements under its crude oil marketing agreements. Los Angeles production will continue to be sold under short-term contracts to the PetroPeru-operated refinery at Iquitos, while PetroTal continues to monitor credit exposure.
Financial Discipline & Cost Structure
Adjusted EBITDA guidance of $30 million assumes annual average sales volumes of 12,000 bopd, and a 2026 annual average Brent oil price of $60.00/Bbl. To align its cost structure with a transition year profile, PetroTal is implementing a cost reduction program targeting significant reductions in opex, run-rate G&A expenses, and capex in 2026. Management is actively reviewing all financing options to address debt amortization and maintain minimum unrestricted cash liquidity of approximately $60 million throughout the year. These are difficult but necessary measures to improve the Company’s cost structure. Similar to 2025, PetroTal’s Adjusted EBITDA guidance is net of $18 million of erosion control expense included in opex. PetroTal has allocated a total of $33 million to erosion control in 2026, of which $18 million will be expensed and $15 million will be capitalized. There are no material changes to cost estimates or timelines for the erosion control project at this time; PetroTal expects to complete the project by Q4 2026, for a total investment of $65-75 million over the 2024-2026 timeframe.
Source: PetroTal
