PetroTal ends year in line with guidance

(Sharecast News) - PetroTal said in an update on Thursday that in the fourth quarter, it saw average sales and production of 15,033 and 14,865 barrels of oil per day, respectively. The AIM-traded firm said those figures were impacted by adverse weather conditions, specifically a severe dry season leading to low river levels, which constrained barge transport and tanker unloading capacity at Manaus.

For the entirety of 2023, PetroTal achieved average sales and production of 14,421 and 14,248 barrels per day, respectively, falling within its guidance range for the year.

That resulted in a production growth rate of 17% over the prior year.

Despite a reduction in return on capital employed from 49% in 2022 to 30% in 2023, PetroTal exited the year with $111m in total cash, of which $91m was unrestricted.

That was achieved after repaying $80m of bonds early in the year and returning over $61m in dividends and share buybacks to shareholders.

Capital expenditures for the fourth quarter amounted to $32.2m, primarily allocated to drilling well 16H, bringing the total capex spend for 2023 to slightly over $108m, which was lower than the board's initial guidance of around $120m.

Throughout 2023, PetroTal drilled three new oil wells and one water disposal well, which collectively produced nearly one million barrels of oil, generating around $45m in net operating income.

Additionally, workover operations on wells 1XD and 2XD were executed in May and June, resulting in production between 500 and 700 barrels of oil per day since July and accumulating over 180,000 barrels in the second half of the year.

Financially, PetroTal reported fourth quarter EBITDA and free funds flow of $50.8m and $8.1m, respectively.

For the full year, EBITDA and free funds flow totalled $210.8m and $90.7m, respectively, aligning with the company's cash flow guidance for 2023.

The firm delivered fourth quarter net income of $21.5m, and over $110.5m for the whole year.

PetroTal also returned capital to shareholders through dividends totaling six cents per share and repurchasing 11.3 million common shares in 2023.

"PetroTal's operational and financial targets were achieved in 2023, increasing average production 17% over 2022, repaying $80m in debt and returning over $61m to shareholders in the form of dividends and share buybacks," said president and chief executive officer Manuel Pablo Zuniga-Pflucker.

"The company managed through a challenging dry season, to achieve market guidance and exit December with production of approximately 20,000 barrels of oil per day.

"2024 is off to a record start having maintained nearly 19,000 barrels per day over the first two months in an $80 oil price environment, enabling us to maintain a robust cash position through the first quarter."

Zuniga-Pflucker said that with continued advancements on the OCP oil export pilot through Ecuador, the company would continue to prioritise derisking oil sales so PetroTal could embark on new production growth projects.

"With its strong, debt-free balance sheet, PetroTal will continue to evaluate accretive growth opportunities."

At 1227 GMT, shares in PetroTal wer flat at 45p.

Reporting by Josh White for Sharecast.com.