TIDMPTAL
RNS Number : 3509X
PetroTal Corp.
25 April 2023
Q1 2023 Operations and Liquidity Update
Average Q1 2023 production of 12,193 bopd
Exiting Q1 2023 with $71 million in cash
Delivered record sales volumes of 21,500 bopd through Brazil and
Iquitos in March 2023
Calgary, AB and Houston, TX - April 25, 2023-PetroTal Corp.
("PetroTal" or the "Company") (TSX: TAL, AIM: PTAL and OTCQX:
PTALF) announces its Q1 2023 operations and liquidity update.
Key Operations and Liquidity Highlights
-- Achieved Q1 2023 average production and sales of 12,193 and
12,618 barrels of oil per day ("bopd"), respectively, up 17% and
21% from Q4 2022;
-- Achieved a Brazilian export route sales record in March 2023
of approximately 606,521 barrels (19,565 bopd). When combined with
sales to the Iquitos refinery, the Company delivered record total
sales of approximately 666,515 barrels in March (21,500 bopd);
-- Completed well 14H on March 27, 2023. Similar to well 12H,
well 14H has been producing at a constrained rate of approximately
3,000 bopd over the week ended April 24, 2023 and continues to
produce as expected;
-- The Company commenced drilling well 15H on April 11, 2023.
This well is expected to cost approximately $14 million and is
estimated to be completed in mid June 2023. The well will reach a
total measured depth of 4,550 meters with the lateral section
expected to be 1,100 meters;
-- PetroTal exited Q1 2023 with approximately $56 million of
unrestricted cash and $15 million of restricted cash for a total of
$71 million. Restricted cash includes amounts reserved for the
social trust funds to be deposited at a later date;
-- Strong cash position supports the recently announced
shareholder return program, with a US$0.015 per share quarterly
eligible dividend (see advisories) to be paid in June 2023 and a
normal course issuer bid ("NCIB") buyback program to commence in Q2
2023, subject to approval by the Toronto Stock Exchange; and,
-- Working capital at March 31, 2023 was strong. Accounts
receivable of approximately $93 million are contractually current,
with accounts payable of approximately $60 million, primarily due
within the next 50 days.
2023 Production and Cash Flow Update
PetroTal has been averaging over 20,000 bopd for over 60
consecutive days ending April 24, 2023, demonstrating the positive
impact from recent key commercial and social initiatives. Quarterly
and full year 2023 production guidance remains unchanged at this
time, as most recently detailed in the Company's March 30, 2023
announcement. 2023 EBITDA guidance remains unchanged at $220
million for the year. After tax free cash flow for 2023 is now
expected to be approximately $85 million, an increase of $30
million from previous guidance, as a result of adjustments to tax
loss pools available for carry forward into 2023. This change
provides PetroTal with additional cash flexibility during the
year.
As announced by Petroperu on April 12, 2023, the Northern
Peruvian Pipeline ("ONP") has resumed pipeline operations after
over a year of being shut down for maintenance and social unrest
related reasons. Following this news, the Company expects that an
estimated 270,000 barrels of oil already in the pipeline will be
exported in late Q2 2023 at Bayovar by Petroperu, generating
between $5 and $7 million in net revenue for the Company at current
oil prices. PetroTal has not re-commenced shipping oil through the
ONP and will consider that option once Petroperu's full credit
lines are reopened and functioning normally.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive
Officer, commented:
"We are extremely happy with our recent production and sales
volumes that are exported via Brazil and to the Iquitos refinery,
having set a monthly sales record of almost 670,000 barrels in one
month to those locations. We hope to carry this momentum throughout
the remainder of the year, having already recovered 97% of the
constrained Q1 2023 volumes in April 2023, and meet current 2023
full year expectations. Our commitment is to look for other export
routes, including the ONP, with the aim of reaching our previous
production record of 26,000 bopd in the near term."
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 , the Company's filed documents at
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) 208 434 2643
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
Tel: +44 (0) 20 7710 7600
Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449
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: PetroTal's business strategy, objectives, strength
and focus; drilling, completions, workovers and other activities
and the anticipated costs and results of such activities;
PetroTal's anticipated capital program and operational results for
2023 including, but not limited to, estimated or anticipated
production levels, capital expenditures and drilling plans; plans
to deliver strong operational performance and to generate free
funds flow and growth; capital requirements; the ability of the
Company to achieve drilling success consistent with management's
expectations; anticipated future production and revenue; drilling
plans including the timing of drilling, commissioning, and startup
and the impact of delays thereon; oil production levels; and the
Company's return of capital strategy including regular dividends
and share buybacks under an NCIB. All statements other than
statements of historical fact may be forward-looking statements. 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. 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. More particularly, this press
release contains statements concerning the future declaration and
payment of dividends and the timing and amount thereof. Future
dividend payments, if any, and the level thereof, is uncertain, as
the Company's dividend policy and the funds available for the
payment of dividends from time to time is dependent upon, among
other things, free funds flow financial requirements for the
Company's operations and the execution of its growth strategy,
fluctuations in working capital and the timing and amount of
capital expenditures, debt service requirements and other factors
beyond the Company's control. Further, the ability of PetroTal to
pay dividends will be subject to applicable laws (including the
satisfaction of the solvency test contained in applicable corporate
legislation) and contractual restrictions contained in the
instruments governing its indebtedness. 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 the Ministry of Energy to
effectively achieve its objectives in respect of reducing social
conflict and collaborating towards continued investment in the
energy sector, 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). In addition, the Company cautions that current global
uncertainty with respect to the spread and evolution of the
COVID-19 virus and its effect on the broader global economy may
have a significant negative effect on the Company. While the
precise impact of the COVID-19 virus on the Company remains
unknown, rapid spread of the COVID-19 virus may continue to have a
material adverse effect on global economic activity, and may
continue to result in volatility and disruption to global supply
chains, operations, mobility of people and the financial markets,
which could affect interest rates, credit ratings, credit risk,
increased operating and capital costs due to inflationary
pressures, business, financial conditions, results of operations
and other factors relevant to the Company. Please refer to the risk
factors identified in the Company's 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. All references to Brent
indicate Intercontinental Exchange ("ICE") Brent. Recovery factor
percentages include historical production.
SHORT-TERM PRODUCTION RATES: References in this press release to
the peak rates and other short term production rates are useful in
confirming the presence of hydrocarbons, however such rates are not
determinative of the rate at which such wells will commence
production and decline thereafter and are not indicative of
long-term performance or of ultimate recovery. While encouraging,
readers are cautioned not to place reliance on such rates in
calculating the aggregate production for PetroTal. The Company
cautions that such results should be considered to be
preliminary.
SPECIFIED FINANCIAL MEASURES: This press release includes
various specified financial measures, including non-GAAP financial
measures, non-GAAP financial ratios and capital management measures
as further described herein. These measures do not have a
standardized meaning prescribed by generally accepted accounting
principles ("GAAP") and, therefore, may not be comparable with the
calculation of similar measures by other companies. Management uses
these non- GAAP measures for its own performance measurement and to
provide shareholders and investors with additional measurements of
the Company's efficiency and its ability to fund a portion of its
future capital expenditures. "Netback" (non-GAAP financial ratio)
equals total petroleum sales less quality discount, lifting costs,
transportation costs and royalty payments calculated on a bbl
basis. The Company considers netbacks to be a key measure as they
demonstrate Company's profitability relative to current commodity
prices. "Funds flow provided by operations" (non-GAAP financial
measure) includes all cash generated from operating activities and
is calculated before changes in non-cash working capital. "Adjusted
EBITDA" (non-GAAP financial measure) is calculated as consolidated
net income (loss) before interest and financing expenses, income
taxes, depletion, depreciation and amortization and adjusted for
G&A impacts and certain non-cash, extraordinary and
non-recurring items primarily relating to unrealized gains and
losses on financial instruments and impairment losses, including
derivative true-up settlements. PetroTal utilizes adjusted EBITDA
as a measure of operational performance and cash flow generating
capability. Adjusted EBITDA impacts the level and extent of funding
for capital projects investments. Reference to EBITDA is calculated
as net operating income less G&A. "Free funds flow" (non-GAAP
financial measure) is calculated as net operating income less
G&A less exploration and development capital expenditures less
realized derivative gains/losses and is calculated prior to all
debt service, taxes, lease payments, hedge costs, factoring, and
lease payments. Management uses free cash flow to determine the
amount of funds available to the Company for future capital
allocation decisions. Please refer to the MD&A for additional
information relating to specified financial measures.
OIL AND GAS MEASURES: This press release contains metrics
commonly used in the oil and natural gas industry which have been
prepared by management, such as "OOIP", "development capital",
"F&D costs", "net asset value" and "reserves life index". These
terms do not have a standardized meaning and may not be comparable
to similar measures presented by other companies, and therefore
should not be used to make such comparisons. "OOIP" is equivalent
to total petroleum initially-in-place ("TPIIP"). TPIIP, as defined
in the COGEH, is that quantity of petroleum that is estimated to
exist in naturally occurring accumulations. It includes that
quantity of petroleum that is estimated, as of a given date, to be
contained in known accumulations, prior to production, plus those
estimated quantities in accumulations yet to be discovered. A
portion of the TPIIP is considered undiscovered and there is no
certainty that any portion of such undiscovered resources will be
discovered. If discovered, there is no certainty that it will be
commercially viable to produce any portion of such undiscovered
resources. With respect to the portion of the TPIIP that is
considered discovered resources, there is no certainty that it will
be commercially viable to produce any portion of such discovered
resources. A significant portion of the estimated volumes of TPIIP
will never be recovered. "Development capital" means the aggregate
exploration and development costs incurred in the financial year on
reserves that are categorized as development. Development capital
excludes capitalized administration costs. "Finding and development
costs" or "F&D costs" are calculated as the sum of field
capital plus the change in future development costs for the period
divided by the change in reserves that are characterized as
development for the period. Finding and development costs take into
account reserves revisions during the year on a per bbl basis. The
aggregate of the exploration and development costs incurred in the
financial year and changes during that year in estimated future
development costs generally will not reflect total finding and
development costs related to reserves additions for that year. "Net
asset value" is based on present value of future net revenues
discounted at 10% before tax on reserves, net of estimated net debt
at year-end divided by the basic shares outstanding at year-end.
"Reserve life index" is calculated as total Company interest
reserves divided by annual production. These terms have been
calculated by management and do not have a standardized meaning and
may not be comparable to similar measures presented by other
companies, and therefore should not be used to make such
comparisons. Management uses these oil and gas metrics for its own
performance measurements and to provide shareholders with measures
to compare PetroTal's operations over time. Readers are cautioned
that the information provided by these metrics, or that can be
derived from the metrics presented in this press release, should
not be relied upon for investment or other purposes.
Eligible Dividend : An eligible dividend is one which is
characterized as such by the dividend-paying corporation for
Canadian residents. The primary benefit of an eligible dividend is
that it benefits from an enhanced gross-up and credit regime at the
shareholder level (i.e., the shareholder pays less tax on eligible
dividends than non-eligible dividends). This is meant to compensate
for the higher general corporate tax rate paid by non-CCPC's on
their income and generally preserve integration of Canada's tax
rates. As an example, for federal income tax purposes the gross-up
rate for eligible dividends is 38% (as compared to 15% for
non-eligible dividends) such that the amount of the dividend is
multiplied by 1.38 to determine the taxable income to the
shareholder. The dividend tax credit for eligible dividends is
additionally increased to 6/11 (or 15.02%), as compared to 9/13
(9%) for non-eligible dividends, to offset the greater income
inclusion to the taxpayer. Each province provides similar relief on
the tax they would otherwise levy on the dividends, although the
effective gross-up and credit differs by province.
FOFI DISCLOSURE: This press release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about NPV-10, future development and
abandonment costs, prospective results of operations, production
and production capacity, free funds flow, revenue, margins, NOI,
shareholder returns and components thereof, all of which are
subject to the same assumptions, risk factors, limitations and
qualifications as set forth in the above paragraphs. FOFI contained
in this press release was approved by management as of the date of
this press release and was included for the purpose of providing
further information about PetroTal's anticipated future business
operations. PetroTal and its management believe that FOFI has been
prepared on a reasonable basis, reflecting management's best
estimates and judgments, and represent, to the best of management's
knowledge and opinion, the Company's expected course of action.
However, because this information is highly subjective, it should
not be relied on as necessarily indicative of future results.
PetroTal disclaims any intention or obligation to update or revise
any FOFI contained in this press release, whether as a result of
new information, future events or otherwise, unless required
pursuant to applicable law. Readers are cautioned that the FOFI
contained in this press release should not be used for purposes
other than for which it is disclosed herein. All FOFI contained in
this press release complies with the requirements of Canadian
securities legislation, including NI 51-101. Changes in forecast
commodity prices, differences in the timing of capital
expenditures, and variances in average production estimates can
have a significant impact on the key performance measures included
in PetroTal's guidance. The Company's actual results may differ
materially from these estimates.
Neither the TSX Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Exchange)
accepts responsibility for the adequacy or accuracy of this press
release.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.".
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END
UPDSESSLIEDSEIL
(END) Dow Jones Newswires
April 25, 2023 02:00 ET (06:00 GMT)
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