Q2 production average of 18,290 bopd
Exit June 2024 with total cash of $96 million
Well 19H achieves initial production rates over 8,500 bopd
PetroTal has now produced over 20 million barrels of oil since inception
PetroTal Corp. ("PetroTal" or the "Company") is pleased to announce the following operational, financial and corporate updates. All amounts are in US dollars unless stated otherwise.
Q2 2024 Production
PetroTal achieved an average production of 18,290 barrels of oil per day ("bopd") in Q2 2024, which included a brief river blockade during the quarter. June's average production was 20,555 bopd.
Drilling and Production Update
Wells 18H and 19H were successfully completed in early May and June 2024, respectively, and the Company commenced drilling well 5WD on June 17, 2024.
Well 18H is currently performing within expectations with initial 7-day and 30-day production rates of 4,621 bopd and 3,929 bopd, respectively. The well cost approximately $17.3 million and its investment payback is expected to be around six months at current oil prices.
Well 19H, the Company's 20th oil producing well, commenced drilling on May 9, 2024, and production on June 14, 2024. Subsequent to clean up, well 19H achieved strong 7-day production rates of 8,511 bopd. Given its structural location, the 19H well was completed with a shorter 600-meter horizontal section. It was also drilled and completed well below budget at a cost of approximately $11.5 million. The well's investment payback is expected in less than two months at current oil prices.
The 5WD will be the Company's 4th formation water disposal well allowing for water injection capacity to increase to approximately 170,000 barrels of water per day by year-end; facilitating the Company's ability to produce over 20,000 bopd on a recurring basis. The 5WD has an approximate cost of $12.5 million.
As announced on May 7, 2024, PetroTal is accelerating an additional well (20H) into its 2024 drilling program. Drilling will commence in late July for an approximate cost of $15.0 million.
Production Milestone Achieved
During the first week of July, the Company achieved total production of 20 million barrels of oil since PetroTal's first production in June 2018. This significant milestone was accomplished in six and half years and is a result of hard work and dedication to continuous improvement. Bretana's proved and probable ("2P") oil reserves have more than tripled, bringing the field's estimated ultimate recovery to around 120 million barrels of oil. While the field's current 2P well inventory is more than halfway completed, it still has nearly 100 million barrels of oil to be recovered.
Ecuador Export Pilot
PetroTal has achieved a significant milestone, securing all regulatory approvals for the Oleoducto de Crudos Pesados ("OCP") pipeline in Ecuador. Oil loading into barges will commence shortly for the previously announced 100,000 barrel pilot program. This pilot allows for a comprehensive evaluation of the transportation route, and with collaboration with Ecuadorian partners, the Company will pursue long-term route optimization for efficient and cost-effective oil transportation.
Social Update
PetroTal is pleased to announce that, on May 9, 2024, the Company transferred $12.6 million to the Social Trust Fund's operating bank account, representing a significant milestone since the creation of the social trust fund concept in late 2021. The funds have been held by the Company as restricted cash while the fund's administrative and governance aspects were formalized. The Social Trust's board of directors, consisting of community representatives, the Puinahua district municipality, and Perupetro, have agreed on the first set of initiatives to be financed with contributions from the fund, some of which are listed below:
1) Establish internet connectivity to over 7,000 inhabitants in the Puinahua district;
2) Provide scholarships to 100 Puinahua students for post-secondary education;
3) Create of an external technical team that will support the elaboration, implementation, and follow up of projects to be financed by the Social Trust; and,
4) Install solar energy pods for clean power access, through coordination with the Minister of Energy and Mines, in 17 communities that are part of PetroTal's area of influence.
Cash and Liquidity Update
PetroTal exited Q2 2024 in a strong position with approximately $84 million of unrestricted cash and $12 million of restricted cash for a total of $96 million, as at June 30, 2024. Restricted cash includes amounts reserved for the social trust funds to be deposited at a later date. During Q2 2024, the Company purchased 1.2 million shares at an average price of US$0.61/share pursuant to the share buyback program, and paid dividends of $13.7 million (US$0.015/share) on June 14, 2024, related to Q1 2024 operations. At the end of Q2 2024, accounts receivable and accounts payable of approximately $113 million and $69 million respectively, were outstanding.
Q2 2024 results webcast link for August 8, 2024
PetroTal will host a webcast for its Q2 2024 results on August 8, 2024 at 9am CT (Houston), 3pm BST (London). Please see the link below to register.
https://stream.brrmedia.co.uk/broadcast/666ae961ee30aaf32018b5c3
