Petrotal Share Discussion Threads

[buffythebuffoon] 02/6/2021 08:03

If you had certainty John, there wouldn’t be any odds for you to accept. You’ll note that bookies generally do quite well, and they manage that by not giving money away!

The bit I like is this part of the comment by our CEO:

“ We are now in a Brent oil price environment where, subject to such conditions continuing, wells only need to produce approximately 280,000 – 300,000 barrels to pay-out full cycle, which in some cases, can happen in two to three months.”

Buffy

[johnhemming] 02/6/2021 07:22

We don't know if the polls are understating Castillo in the same way that they did in the first round, but these will be the last polls before Sunday's real one.

All of the final polls show Fujimori gaining and the margin between the two looking very small.

Ipsos (28/5 - Changes with 21/5)
Castillo - 45.1 % (+0.1%)
Fujimori - 43.1 % (+2.4%)

CIT (27-28/5 - Changes with 21-22/5)
Fujimori - 41.7 % (-1.3%)
Castillo - 40.6 % (+1.7%)

Datum (25-27/5 - Changes with 18-20/5)
Castillo - 42.6 % (-2.9%)
Fujimori - 41.7 % (+1.6%)

Factors that could be relevant are the historic understating of Castillo, shy Fujimori voters, the general swing.

Personally I would not bet on the result as I cannot say which way it will go with any certainty.

[sleveen] 02/6/2021 07:00

1st June presentation:

[pro_s2009] 02/6/2021 05:06

PetroTal Corp

PetroTal announces it secures liquidity, improves risk management position, and advances offtake optionality prior to executing an operationally focused and pivotal development plan.

In Q1 2021 Selected Operational Highlights it commenced drilling the 7D well, which was successfully completed on April 30, 2021. PetroTal started drilling well 7D on March 29, 2021, reaching a vertical depth of 2,696 meters and encountering excellent oil producing sands. The well was drilled and completed at a revised final cost of $7.6 million, or 17% below budget. After the typical clean-up period and slowly ramping up production during the following week, the 7D averaged over 4,500 bopd over a four-day period, accumulating over 115,000 barrels of oil during its first month of production, and maintaining average production rates of 4,000 bopd during the past four weeks.

It also upsized the pump on 4H and installed a new electro-submersible pump on the 4H well under budget and on time. Soon after the workover, the well was producing at 400 bopd higher than before the operation and is expected to recapture the incremental cost of the pump over the next few months at current Brent levels.

Production is materially on target, for Q1 2021 averaged 7,331 bopd which was materially on budget. Current production is 10,225 bopd, notwithstanding that two oil wells remain shut in waiting on water disposal pump enhancements which has reduced production by an estimated 1,200 bopd.

The CPF-2 on track and on budget with materials for phase two of its central processing facility continue to be installed and the project is on track for a Q3-Q4 2021 commissioning. PetroTal is reiterating 2021 guidance. The Company is reaffirming its 2021 average production target of 11,500 bopd.

The Company completed the placement of a 3-year $100 million senior secured bond with a 12% coupon and a borrowing limit of $125 million. The Company exceeded compliance with all covenants at March 31, 2021 with the newly issued bonds being the only material long term debt on the balance sheet.

It improved corporate risk management, during the quarter, the Company hedged 590,000 barrels in a put structure with a $60/bbl strike price. Subsequent to the quarter end, The Company hedged an additional 622,000 barrels at similar strike prices bringing hedged April 2021 to December 2021 production to 32% of budget.

The company is constantly de-risking and by working with Petroperu, the Company solidified, through hedging, a $31 million future true-up payment for approximately 1.8 million barrels of oil in the North Peruvian Pipeline and implemented a risk management partnership process with Petroperu for future sales into the ONP. The receipt of the $31 million is subject to the pace of oil movements through the ONP and is expected to be received by PetroTal as sales arrive in Bayovar throughout the next nine to twelve months.

It executed a third route to market strategy by selling 225,045 barrels, FOB Bretana, through Brazil with competitive commercial terms vs sales through the ONP. Enhanced existing offtake arrangement. Extended the sales agreement with Petroperu until December 2022 with improved commercial terms under low Brent scenarios.

The company has significant liquidity in hand and exited Q1 2021 with $75.8 million of total (restricted and unrestricted) cash compared to $9.6 million at the end of 2020. Higher net operating income, PetroTal generated nearly $20 million ($25.87/bbl) of NOI in the quarter, an increase of 12% over Q1 2020 despite producing 2,378 bopd less in Q1 2021 vs Q1 2020.

Operating costs for Q1 2021 were $5.5 million ($7.17/bbl) vs $6.0 million ($6.42/bbl) in Q1 2020 driven by lower production rates and offset slightly by higher than estimated one-time fuel use for the new crude oil power generation plant commissioning, which was more expensive in Q1 2021 due to a higher Brent price.

The Company invested $7.1 million on capital expenditures in the quarter vs $23.8 million in Q1 2020. The bulk of PetroTal’s 2021 development capex will occur in Q2 2021 and H2 2021 ensuring flush production from new drills is online during favourable Brent pricing months with hedging in place for downside protection.

With recent elevated Brent prices, the Company estimates it is operating materially above the original $90 million EBITDA budget for 2021 which assumed $50/bbl Brent. Excluding hedging and true-up revenue, and from June until December 2021, it is estimated that for every $1/bbl above $50/bbl Brent, EBITDA increases $2.0 to $2.5 million, making PetroTal potentially free cash flow positive for 2021.

Net income for the quarter was $30.9 million vs a net loss of $31.4 in Q1 2020 driven largely by higher commodity prices. Normalizing out derivative changes results in Q1 2021 and Q1 2020 having similar net income figures of $8.5 million and $9.0 million, respectively.

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented

“Q1 2021 was a great quarter in many ways. From a strategy standpoint it was prudent that the Company shored up its liquidity position before undertaking material operations with pace. The Company is now on solid footing from a liquidity, risk, and safety standpoint and if firmly focused on achieving operational excellence in 2021. We are now in a Brent oil price environment where, subject to such conditions continuing, wells only need to produce approximately 280,000 – 300,000 barrels to pay-out full cycle, which in some cases, can happen in two to three months. The Company’s advancement on a risk, finance, and operational standpoint this quarter was impressive, and we will continue this positive momentum throughout 2021, to the benefit of all stakeholders.”

The CEO comments above fairly analyse how much PTAL has changed in the last few months and the board has done an exceptional job for the shareholders. It is worth reading the above comments and look at the share price with change from 15p and the market cap of some £135m and realise just how cheap these shares really are.

[johnroger] 01/6/2021 11:16

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented

"Q1 2021 was a great quarter in many ways. From a strategy standpoint it was prudent that the Company shored up its liquidity position before undertaking material operations with pace. The Company is now on solid footing from a liquidity, risk, and safety standpoint and if firmly focused on achieving operational excellence in 2021. We are now in a Brent oil price environment where, subject to such conditions continuing, wells only need to produce approximately 280,000 - 300,000 barrels to payout full cycle, which in some cases, can happen in two to three months. The Company's advancement on a risk, finance, and operational standpoint this quarter was impressive, and we will continue this positive momentum throughout 2021, to the benefit of all stakeholders."

[sleveen] 01/6/2021 07:31

Particularly this:

"Free cash flow generation . With recent elevated Brent prices, the Company estimates it is operating materially above the original $90 million EBITDA budget for 2021 which assumed $50/bbl Brent. Excluding hedging and true-up revenue, and from June until December 2021, it is estimated that for every $1/bbl above $50/bbl Brent, EBITDA increases $2.0 to $2.5 million, making PetroTal potentially free cash flow positive for 2021."

[gutterhead] 01/6/2021 07:22

Progress and positives all clearly laid out. Good update

[thommie] 27/5/2021 22:03

couldnt this seller start a few days earlier? just topped up at 15,25p some days ago...10 300 bopd till 25. now.

[chris_engel] 26/5/2021 11:20

KS, thanks for that. I did miss that page. It is actually quite clearly laid out.

[king suarez] 26/5/2021 11:05

Took me a while, but I have found the explanation - page 21 - a reclassification of revenues to include (net) transportation expenses?

"Revenue and transportation expense adjustment

Revenue and transportation expense adjustment are non-GAAP measure, that includes in transportation ONP pipeline tariff, marketing fee, barging and diluent expenses. Tariff and marketing fees are expenses usually recorded by reducing revenues in the financial statements. Management believes the reclassifications described below, now align with the nature of the costs presented with the
assessment of performance of the company."

[chris_engel] 26/5/2021 10:16

Does anyone know why there is such a discrepancy in the revenue reporting in the FY20 report?



The highlights on page 4 say: "Generated revenue in 2020 of $76.6 million ($36.71/bbl) compared to $82.8 million ($56.24/bbl) in 2019". This is repeated in the table on page 5. It also matches with the other numbers given, i.e. average sales (5700 bopd) * 366 days * average realized price (36.71 USD).

However, on page 36 it states that the revenue net of royalties is $58,9 million, or $61.7 million gross (see note 13 on page 48)

Why the difference of nearly $15 million?

I can't figure it out. Is it just a timing when revenue is recognized?

[sleveen] 22/5/2021 06:15

Perhaps

“ I remain INTRIGUED as to whether they are picking up Castillo's rural support,”

[johnhemming] 21/5/2021 20:53

I agree that the management are doing a good job. However, the risk of politicians undermining that remains.

However, I have bought a bit more recently.

[johnhemming] 21/5/2021 20:46

>Why concerned?
Because in the end Castillo's economic policies will be damaging for Peru (and particularly the poorer people in Peru). As they are damaging for Peru they would hit investments in Peru.

[buffythebuffoon] 21/5/2021 18:31

“ I remain concerned as to whether they are picking up Castillo's rural support,”

Why concerned?

Buffy

[johnhemming] 21/5/2021 17:46

Fujimori moves into the lead



I remain concerned as to whether they are picking up Castillo's rural support, but it is clear that previously undecided voters are deciding to stop Castillo. His behaviour in terms of not turning up to a debate with Fujimori that he asked for will not help his campaign.

The result is still in the margin of error, but it appears that the momentum is with Fujimori.

[buffythebuffoon] 18/5/2021 08:58

That’s if you believe anything promised now will be carried out once the winning candidate has got the votes and been elected. Only an absolute idiot when faced with a diminishing lead in the polls would stay quiet rather than come up with something to reassure voters.

Buffy

[johnhemming] 18/5/2021 07:12

I don't know whether it is. I would say it is a useful article to see what goes on in other countries.

I have not been able to find what Castillo was saying in detail about mining as we could read that through to hydrocarbons, but it is worth looking at the situation in Chile with the proposal for progressive royalties.

[pro_s2009] 18/5/2021 07:05

Oh....I read about Petrotal and though it was PTAL - I will remove it.