PetroTal reports strong third quarter performance

8th Oct 2024 13:19

(Sharecast News) - PetroTal reported a strong third quarter operational and financial performance on Tuesday, with average production of 15,160 barrels of oil per day, a 39% increase compared to a year earlier.

The AIM-traded firm said that while production declined 17% from the prior quarter due to drought-related river levels in Peru, it remained on track to meet the top end of its annual production guidance.

As of 30 September, it held a total cash position of $133m, an 18% increase year-on-year, with $121m in unrestricted cash.

The board said the 20H well at the Bretaña field, completed in September, achieved initial production rates of over 5,300 barrels per day.

PetroTal said it would manage production in response to river levels, with the well averaging 3,120 barrels per day over its first six days of production.

The company also started drilling the 21H well, expected to be completed by mid-November, and was planning further drilling activity through the first quarter of 2025.

PetroTal said it continued to maintain liquidity and operational strength, reporting hedging agreements to stabilise pricing and ongoing share buybacks.

The company repurchased one million shares during the third quarter, and paid a $13.7m dividend in September.

In regulatory developments, the president of Peru granted a Supreme Decree enabling the transfer of Block 131 to PetroTal, with the transaction expected to close following the issue of a final investment certificate.

PetroTal said it also continued to explore export options, including a pilot shipment to Ecuador's OCP pipeline, despite challenges posed by river levels.

Socially, PetroTal said it contributed nearly $20m to the Social Trust Fund for community projects in Puinahua District.

"I am pleased to report that PetroTal's production exceeded expectations in the third quarter of 2024," said president and chief executive officer Manuel Pablo Zuniga-Pflucker.

"Our operations and logistics teams have done an outstanding job of managing record low river levels, which have impacted our ability to export crude through the Brazil route in recent weeks.

"We are nearing the end of dry season in the coming weeks and remain optimistic that production should return to capacity by the middle of November."

Zuniga-Pflucker said that With $133m of cash in reserve, PetroTal's liquidity remained healthy, despite a reduction in oil prices over the month of September.

"We are committed to a capital returns policy that includes a stable dividend, balanced with the advancement of our key development initiatives.

"With that in mind, the budgeting process for our 2025 capital program is well advanced, and we look forward to updating the market on our future development program at the appropriate time."

At 1321 BST, shares in PetroTal were up 0.84% at 39.83p.

Reporting by Josh White for Sharecast.com.