PetroTal upbeat after strongest ever quarter

PetroTal reported record average quarterly sales of 18,483 barrels of oil per day in its second quarter on Tuesday, making for a 46% increase from the first three months of the year.

The AIM-traded firm said production figures also surged, with the firm achieving record production of 19,031 barrels per day - 56% growth from the first quarter.

Notably, there were 60 days in the quarter where production surpassed 20,000 barrels.

PetroTal closed the quarter with a robust cash position of $92.6m, including $17.3m restricted, reflecting a 29% rise from the end of the first quarter.

Due to its stellar performance in the period, PetroTal said it was planning to declare and disburse a cash dividend of 2.5 US cents per common share in the next quarter.

The company's oil export sales via Brazil averaged 513,000 barrels monthly, with April seeing exports of around 590,000 barrels.

Combined with Iquitos refinery deliveries, the total realised oil sales amounted to 630,462 barrels for April.

PetroTal also highlighted the start of drilling for well 15H on 11 April, with first oil production materialising ahead of the timeline in early June.

The company said it generated significant EBITDA and free funds flow of $70m and $37.7m, respectively, both of which compared favourably with the first quarter’s $47.9m and $7.9m figures.

PetroTal's net income for the quarter stood at $46.6m, translating to five US cents per share – an improvement from two cents per share in the first three months of 2023.

Finally, during the second quarter the company disbursed dividends of 1.5 cents per share and repurchased 582,708 shares.

That equated to a capital return of $14.7m to shareholders, approximating 3.4% of its market capitalisation as at 30 June.

“PetroTal delivered its strongest quarter to date in the second quarter of 2023,” said president and chief executive officer Manuel Pablo Zuniga-Pflucker.

“Underpinned by unconstrained Brazilian export sales, the company was able to produce over 20,000 barrels of oil per day for 60 days, which allowed the company to achieve records in almost all major cash flow metrics including generating over $70m of EBITDA.

“In addition, our second quarter operating and direct transportation cost was $5.80 ep barrel, versus $7.70 in the first quarter, showing the benefit of larger volumes on fixed unit costs, and demonstrating how hard the team has worked to keep field costs in check, despite an inflationary environment.”

Zuniga-Pflucker said the firm’s board and management were also pleased with the additions of Jose Contreras as senior vice-president of operations, and Felipe Arbelaez Hoyos as independent non-executive director.

He said they were both fitting in “extremely well”, adding “significant value” to the company.

“Looking ahead to the third quarter, the Amazon River water level is currently low near Iquitos and is consequently forecast to be low on the Brazilian side near the end of the period, leading to a lighter barge fill requirement projected for most of the quarter.

“As a result, the company is reiterating its full year oil production guidance of 14,000 to 15,000 barrels of oil per day.

“This showcases the importance of securing other oil export routes and promoting the full and consistent operation of the ONP pipeline, both of which the company are committed to advancing.”

At 1516 BST, shares in PetroTal were up 2.07% at 44.4p.

Reporting by Josh White for Sharecast.com.