PetroTal achieves four-year production target in December

PetroTal said in an update on Thursday that it achieved production of 8,966 barrels of oil per day and sales of 8,449 barrels per day in 2021, up 58% and 48% year-on-year, respectively.

The AIM-traded firm said it recorded a fifth straight quarter of production growth in the final three months of the year, reaching 10,147 barrels per day in the fourth quarter, from 9,508 barrels per day in the third.

It also achieved its four-year target of 20,000 barrels of oil per day in mid-December, underpinned by strong production rates from the newly-drilled 8H and 9H wells late in the third and in the fourth quarter, each reaching more than 8,500 barrels per day.

PetroTal also generated record net operating income and EBITDA of $105m (£83.7m) and $90m, up around 3.6x and 5x respectively, from 2020.

The company also generated a record funds flow from operations, before changes in working capital, of $86.7m, which was up more than five times from the prior year.

It grew proved plus probable (2P) and proved plus probable plus possible (3P) reserves by 53% and 39%, respectively, to 78 million and 147 million barrels of oil.

PetroTal also flagged a “material progression” of 2P after-tax net present value at a 10% discount reserve value per share of $1.23, which was 62% higher year-on-year.

The firm generated 2021 proved (1P) and 2P reserve replacement ratios of 457% and 816%, respectively.

Its board also “created the framework” for a social trust representing 2.5% of production, to create “long-standing alignment” between communities and government.

The company said the trust would “minimise social downtime”, “maximise social profitability”, and develop community projects that would have a “significant positive impact” near the company's Bretana oilfield.

“2021 will be remembered for many significant operational, commercial and financial milestones achieved by the PetroTal team,” said president and chief executive officer Manuel Pablo Zuniga-Pflucker.

“When unconstrained, PetroTal is the largest crude oil producer in Peru and our management team is well aware of the responsibilities and deliverables that accompany that stature.

“Our goals for 2022 are very clear, and given the tailwind of a robust commodity price environment aiding us, we believe the company can add tremendous value.”

Zuniga-Pflucker said that, having met its original goal of 20,000 barrels of oil per day, the team was now focussed on achieving a new production target of 25,000 barrels per day with “minimal” social downtime.

At 0910 BST, shares in PetroTal Corporation were up 2.78% at 38.78p.