PetroTal Corp. ("PetroTal" or the "Company") (TSX: TAL, AIM: PTAL and OTCQX: PTALF) announces its Q1 2023 operations and liquidity update.
Key Operations and Liquidity Highlights
· Achieved Q1 2023 average production and sales of 12,193 and 12,618 barrels of oil per day ("bopd"), respectively, up 17% and 21% from Q4 2022;
· Achieved a Brazilian export route sales record in March 2023 of approximately 606,521 barrels (19,565 bopd). When combined with sales to the Iquitos refinery, the Company delivered record total sales of approximately 666,515 barrels in March (21,500 bopd);
· Completed well 14H on March 27, 2023. Similar to well 12H, well 14H has been producing at a constrained rate of approximately 3,000 bopd over the week ended April 24, 2023 and continues to produce as expected;
· The Company commenced drilling well 15H on April 11, 2023. This well is expected to cost approximately $14 million and is estimated to be completed in mid June 2023. The well will reach a total measured depth of 4,550 meters with the lateral section expected to be 1,100 meters;
· PetroTal exited Q1 2023 with approximately $56 million of unrestricted cash and $15 million of restricted cash for a total of $71 million. Restricted cash includes amounts reserved for the social trust funds to be deposited at a later date;
· Strong cash position supports the recently announced shareholder return program, with a US$0.015 per share quarterly eligible dividend (see advisories) to be paid in June 2023 and a normal course issuer bid ("NCIB") buyback program to commence in Q2 2023, subject to approval by the Toronto Stock Exchange; and,
· Working capital at March 31, 2023 was strong. Accounts receivable of approximately $93 million are contractually current, with accounts payable of approximately $60 million, primarily due within the next 50 days.
2023 Production and Cash Flow Update
PetroTal has been averaging over 20,000 bopd for over 60 consecutive days ending April 24, 2023, demonstrating the positive impact from recent key commercial and social initiatives. Quarterly and full year 2023 production guidance remains unchanged at this time, as most recently detailed in the Company's March 30, 2023 announcement. 2023 EBITDA guidance remains unchanged at $220 million for the year. After tax free cash flow for 2023 is now expected to be approximately $85 million, an increase of $30 million from previous guidance, as a result of adjustments to tax loss pools available for carry forward into 2023. This change provides PetroTal with additional cash flexibility during the year.
As announced by Petroperu on April 12, 2023, the Northern Peruvian Pipeline ("ONP") has resumed pipeline operations after over a year of being shut down for maintenance and social unrest related reasons. Following this news, the Company expects that an estimated 270,000 barrels of oil already in the pipeline will be exported in late Q2 2023 at Bayovar by Petroperu, generating between $5 and $7 million in net revenue for the Company at current oil prices. PetroTal has not re-commenced shipping oil through the ONP and will consider that option once Petroperu's full credit lines are reopened and functioning normally.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
"We are extremely happy with our recent production and sales volumes that are exported via Brazil and to the Iquitos refinery, having set a monthly sales record of almost 670,000 barrels in one month to those locations. We hope to carry this momentum throughout the remainder of the year, having already recovered 97% of the constrained Q1 2023 volumes in April 2023, and meet current 2023 full year expectations. Our commitment is to look for other export routes, including the ONP, with the aim of reaching our previous production record of 26,000 bopd in the near term."
