- Q3 2023 average sales and production of 11,553 bopd and 10,909 bopd respectively
- Q3 2023 unrestricted cash of $94 million
- OCP sales pilot commencing shortly with support from Ecuadorian government
- US$0.02 per share dividend to be paid December 15, 2023
PetroTal, a company focused on development of oil and gas assets in Peru, has reported its operating and financial results for the three and nine months ended September 30, 2023.
Selected financial and operational information is outlined below and should be read in conjunction with the Company’s unaudited consolidated financial statements and management’s discussion and analysis ('MD&A') for the three and nine months ended September 30, 2023, which are available on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.PetroTal-Corp.com. All amounts herein are in United States dollars unless otherwise stated.
Selected Highlights
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Average quarterly sales and production of 11,553 and 10,909 barrels (“bbls”) of oil per day (“bopd”), respectively, impacted by a severe dry season and consequent low river levels that limited barge transport and tanker unloading capacity at Manaus;
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Exited the quarter in a strong cash position with $113 million in total cash ($94 million unrestricted), up 22% from the end of the second quarter (“Q2”) of 2023;
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The Company has declared a cash dividend of $0.02 per common share that will be paid December 15, 2023, with a record date of November 30, 2023. This represents a 15% annualized yield based on the current share price. In addition, the Company will continue to buy back shares under its normal course issuer bid, at approximately $1 million per month during the fourth quarter of 2023 (“Q4”);
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Completed the latest well, 15H, in early June 2023 averaging 7,203 bopd during its first 30 days online. The well was shut-in in mid July due to production constraints caused by low river levels, and was briefly reopened last month for 10 days, averaging 5,000 bopd. The well is expected to be fully reopened the last week of November as river levels continue to rise;
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Completed installation of the new west drilling platform (“L2 West Platform”) where the Company expects to drill future oil wells;
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Generated EBITDA and free funds flow of $42.0 million ($39.55/bbl) and $36.9 million ($34.76/bbl) respectively, compared to $70.0 million ($41.63/bbl) and $37.7 million ($22.41/bbl) in Q2 2023;
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Achieved net income of $25.4 million ($0.03/share) in Q3 2023 compared to $46.6 million ($0.05/share) in Q2 2023;
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Paid a dividend of $0.025/share and repurchased 5.6 million common shares in Q3 2023, representing a total of $26.1 million of capital returned to shareholders (~5.0% of September 30, 2023, market capitalization) due to record results in Q2 2023 financial performance; and,
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Enhanced the Board of Directors (“Board”) by adding two new independent directors since June 30, 2023. Mr. Felipe Arbelaez Hoyos and Ms. Emily Morris joined the Board, each bringing significant breadth and depth in commercial strategy, capital markets, ESG and M&A to the PetroTal team.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
'Despite a challenging Q3 from an oil sales perspective due to extremely low river levels, the Company delivered strong cash flows for the quarter, driven by robust Brent prices and prudent spending by the management team. This has allowed the Company to declare a cash dividend of $0.02 per common share. With river levels now rising we expect to be producing approximately 20,000 bopd consistently by the last week of November 2023.
Looking ahead to Q4 2023, management is very focused on optimizing existing logistics and unlocking new commercial sales routes, starting with our 100,000 barrel oil sales pilot through the Ecuador pipeline (“OCP”). If successful, and with some added facilities, we estimate this route could carry up to 5,000 bopd, significantly limiting the impact of future dry seasons. In addition, the commercial team has completed a significant Brazilian export milestone by unloading directly from barge to ship without requiring a terminal to unload the crude, bypassing that potential bottleneck.
As we contemplate future sales routes in our 2024 budget planning, including the route via Yurimaguas that should be ready next year, we are still expecting an ONP sales option in 2024 as Petroperu continues to work through their financial and operational challenges. We will continue to support constructive discussions with Petroperu in this area.'
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Source: PetroTal
