PetroTal Corp (AIM: PTAL): Production back at 20 mbbl/d. Regular payments from Petroperu
• Production was constrained in January and February, with average production of ~7,600 bbl/d and 8,000 bbl/d respectively, due to restricted barging capacity over these two months.• The barging fleet schedules have now been re-established with an increased capacity of 1.5 mmbbl (1.2 mmbbl in 2022) and PetroTal’s production has been averaging 20 mbbl/d since the last week of February.
• Given the constrained production rates over January and February, the company now expects 1Q23 production to range between 11 mbbl/d and 12 mbbl/d, below previous expectations of 13.5 mbbl/d.
• However, given the strong current production rate and increased barging capacity, the company anticipates it will make up the 1Q23 production shortfall in 2Q23. The FY23 production guidance of 14 15 mbbl/d has been re-iterated.
• Well 14H is expected to be completed in early to mid April.
• We re-iterate our target price of £1.50 per share. The shares continue to offer deep value combined with reserves and cashflow growth. Also, the company could return US$100-130 mm to shareholders in 2023. This equates to £0.09-0.11 per share.
Petroperu payments on track. Bonds to be repaid in March.
PetroTal has received US$26.5 mm in regular monthly scheduled payments from Petroperu, totalling approximately 40% of the US$64 mm true up revenue due to the Company from 2022. The remaining portion of the bonds continues to be expected to be repaid by the end of March. This will allow PetroTal to initiate a capital return programme. The 2.5% Social Trust modification of the Block 95 License Contract has now been approved by the Ministry and Energy and Mines.
Valuation
Our Core NAV based on the 2P reserves is unchanged at ~£1.10/sh with a ReNAV of ~£1.50/sh. We continue to forecast net cash of ~US$370 mm (calculated as working capital minus debt) at YE24, increasing to almost US$500 mm at YE25.
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.
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