PetroTal Corp (AIM: PTAL): 2Q25 results in line. Production steady despite rig delay.
• 2Q25 production averaged 21,039 bbl/d, in line with expectations. This includes 20,512 bbl/d from Bretana and 526 bbl/d from Los Angeles. Output was affected by previously disclosed pump failures in four wells.• Quarter-end cash stood at US$142.1 mm, up from US$113.6 mm at the end of March. This reflects US$50 mm of drawn debt, a US$24.1 mm positive working capital movement, and ~US$14 mm in dividends. This is consistent with forecasts that assumed a US$41 mm tax payment in 2Q25.
• Three of the failed pumps have been replaced at Bretana, restoring oil production of ~3,300 bbl/d. The final unit is expected online by the end of July. The current oil output (over 20 mbbl/d) is constrained by water disposal. Oil processing capacity is on track to reach 32 mbbl/d by YE25.
• The commissioning of the new rig is delayed, and we now anticipate drilling will commence several months later than previously planned.
• Give the delays, the capex guidance may be revised lower, but pending further clarity, our estimates remain unchanged. We reiterate our target price of £1.20 per share, with an expected FY25 dividend yield of ~12% at current levels.
Reflections on 3Q25
PetroTal plans to begin workover operations at Los Angeles in 3Q25, with potential incremental production of ~500 bbl/d in 4Q25. Elevated Amazon River levels may reduce seasonal production constraints in 3Q25, potentially outperforming the ~3 mbbl/d decline seen in 3Q24 (vs. 2Q24). This upside would more than offset delays in drilling at Los Angeles, where a new well is estimated to contribute ~1 mbbl/d on a quarterly average.
Valuation
Our 2P Core NAV is now £0.93 per share with a ReNAV of £1.18 per share. We continue to forecast YE25 net cash of ~US$55 mm (after ~US$55 mm in dividends during 2025).
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.
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