PetroTal reports several financial records in second quarter

PetroTal reported record second-quarter revenue on Thursday, with oil revenue rising to $118.4m, compared to $42.8m a year earlier.

The AIM-traded firm also reached a record net operating income and an improved EBITDA of $98.6m and $93.4m, respectively, compared to $29.7m and $26.4m year-on-year.

Capital expenditures in the three months ended 30 June totalled $24m, and were focussed on drilling and completing well 11H and advancing infrastructure projects.

The company said the total represented 88% of the budget, due to the deferral of drilling activity amid social protests in March, and the deferral of additional facility and water disposal work until 2023.

First half capital expenditures came in at $41.6m, trending “well under” the $70m approved budget.

PetroTal said its second quarter and year-to-date free cash flow also reached record levels, at $69.4m for the quarter and breaching $100m for the half-year, “significantly boosting” its liquidity profile.

Operating costs were also lower, with total quarterly lifting costs of $8.4m, down from $10.1m in the first quarter, driven by lower contracted operations and Covid-19 expenses.

Transportation costs reached a record low too, with diluent and barging costs of $3.4m, reducing “significantly” from $12.1m in the prior quarter.

General and administrative expenses were “on budget” at $5.1m, up from $3.2m year-on-year, while net income reached a “record” $84.2m, “significantly exceeding” the $11.4m it reported a year ago.

The board said the balance sheet reflected a record net debt-to-surplus position of -$79m as at 30 June.

PetroTal’s total net derivative asset on the balance sheet at period end totalled $56.8m, consisting mostly of the true up-value of oil in the ONP.

As at 30 June, around 3.1 million barrels remained in the ONP, backstopping the net derivative value with a “much lower” cost base from sales made in 2020 and 2021.

With the ONP maintenance expected to be completed in October, and the pipeline operational again, the schedule to realise the derivative value had shifted primarily into 2023, which PetroTal said would further supplement its expected cash reserves.

“Though we have experienced recent production constraints from short term sales bottlenecks, unconstrained production run rates are over 20,000 barrels of oil per day, which we successfully tested in our facilities,” said president and chief executive officer Manuel Pablo Zuniga-Pflucker.

“The outlook for PetroTal's low sulphur oil remains incredibly robust with recent strong export demand realised.

“We continue to meet commercial challenges head on and are excited about potential short- and long-term solutions for PetroTal's river transportation options.”

Zuniga-Pflucker said that from a social perspective, the 2.5% social fund working table sessions had been “extremely productive”, transparent, and aligned, creating the “necessary stability” its field had strived for over the years.

“Many milestones have yet to be achieved, however, the initiatives remain on track and functioning as planned with more formal updates on this to come in the second half of 2022.”

At 1237 BST, shares in PetroTal were up 18.07% at 48.5p.

Reporting by Josh White at Sharecast.com.