PetroTal Corp (AIM: PTAL): Lower level of production in 3Q23 in line with our expectations
• Production continues to be impacted by the reduced barge movements to/from Brazil during the low river dry season.• Production in July of 11,552 bbl/d had been previously reported. Production in August was 12,651 bbl/d, in line with previous indications (~13 mbbl/d).
• We forecast ~12 mbbl/d production in 3Q23.
• The company has re-iterated its FY23 production guidance of 14 15 mbbl/d.
• Important upcoming newsflow includes the potential reopening of the ONP pipeline allowing PetroTal to increase production and eliminate the production constraint during the dry season when the Amazon river water level is low.
• The current quarterly dividend of US$0.025 per share (US$0.10 per share per year) would represent a dividend yield of >17%. A buyback programme of US$3 mm per quarter would represent a further return of >2% per year. In July and August alone, the company has bought back ~US$2.3 mm in shares. We re-iterate our target price of £1.50 per share.
Valuation
Our Core NAV of £1.11 per share and ReNAV of ~£1.56 per share are unchanged. Higher oil prices have significant positive implications for our forecasts. Assuming US$92/bbl for Brent from 3Q23, we forecast that PetroTal will have returned >US$100 mm (~20% of the current market cap) in dividends and share buybacks by YE24 and still hold ~US$280 mm in working capital (and no debt) by then.
PetroTal is an energy company engaged in the exploration for, and development of, crude oil and natural gas in selected areas of the world outside Canada. Co. has interests in four countries, the United Kingdom (offshore and onshore), Romania (offshore and onshore) France (onshore) and the Netherlands (offshore). Each country has established hydrocarbon basins, extensive infrastructure and attractive contractual and fiscal terms. As of Dec 31 2010, total gross proved plus probable reserves for light or medium oil consisting of 0.010 million barrels, natural gas consisting of 186.101 billion standard cubic feet and natural gas liquids consisting of 0.757 million barrels.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.