Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PetroTal Corp (PTALF, Financial) achieved record production levels, averaging over 20,000 barrels per day in June and July 2024.
- The company successfully completed two new production wells, with well 19H achieving payout in approximately 40 days.
- PetroTal Corp (PTALF) reported strong financial metrics, with net revenue of $103.1 million and a record high net operating income of $80 million in Q2 2024.
- The company maintains a strong balance sheet with $95.9 million in total cash and no long-term debt.
- PetroTal Corp (PTALF) has increased its full-year 2024 EBITDA guidance to a range of $200 million to $240 million, exceeding the original guidance of $200 million.
Negative Points
- An eight-day river blockade negatively impacted production levels in the last quarter.
- Operating and transportation expenses increased to $13.1 million in Q2 2024, up from $11.5 million in the previous quarter.
- The company expects production to decline in the coming months due to the dry season.
- PetroTal Corp (PTALF) has deferred the seismic acquisition for Block 95 to next year due to delays in obtaining the EIA permit.
- The company's share buyback program has been moderated due to prioritizing capital spend and dividend sustainability.
Q & A Highlights
Q: Do you have any updates regarding DOMP? Is there any development with Petroperú, and is there a possibility to use DOMP within 2024?
A: Manolo Zuniga, CEO: We continue discussions with Petroperú to optimize pipeline operations. However, we are not planning to use the pipeline in 2024 or 2025 due to cash flow impacts and are waiting for other operators to contribute oil to the pipeline.
Q: In five years, including potential M&A, where do you hope PetroTal's production flow rates will be?
A: Manolo Zuniga, CEO: We aim to grow the company to have a significant market presence, targeting 50,000 barrels of oil per day, with potential expansion to 70,000 barrels, supported by our recent acquisition of CEPSA's Los Angeles field.
Q: When will CapEx spend reduce?
A: Camilo McAllister, CFO: The drilling program has been accelerated, and we are investing in facility upgrades. We expect to complete the current drilling campaign by Q1 2025, after which we will reassess our investment strategy for the following year.
Q: Will Peru consider the additional erosion and community protection investments in future royalty rate discussions?
A: Manolo Zuniga, CEO: Not in royalty rates, but we are discussing with the regional government to use future income taxes for community projects, similar to initiatives by large mining companies in Peru.
Q: What near-term potential in terms of improved production rates do you see at Block 131?
A: Manolo Zuniga, CEO: The Los Angeles field in Block 131 has potential for increased production through horizontal wells and deeper horizons that were previously untested, offering exciting growth opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
