TIDMPTAL
RNS Number : 0786Q
PetroTal Corp.
16 June 2020
PetroTal Announces 2019 Year-End Financial and Operating
Results
Record levels of oil production, cash flow and income
Calgary and Houston - June 15, 2020 - PetroTal Corp. ("PetroTal"
or the "Company") (TSX--V: TAL and AIM: PTAL) is pleased to
announce its financial and operating results for the year and the
three months ("Q4") ended December 31, 2019.
Selected financial, reserves and operational information is
outlined below and should be read in conjunction with the Company's
audited consolidated financial statements ("Financial Statements"),
management's discussion and analysis ("MD&A") and annual
information form ("AIF") for the year ended December 31, 2019,
which are available on SEDAR at www.sedar.com and the Company's
website at www.petrotal-corp.com . Reserves numbers presented
herein were derived from an independent reserves report (the "NSAI
Report") prepared by Netherland, Sewell & Associates, Inc.
("NSAI") effective December 31, 2019. All amounts herein are in
United States dollars ("USD") unless otherwise stated.
2019 highlights
The Company reached several key operational and financial
achievements during 2019 as described below:
Q4 Highlights
- Drilled and completed the Company's first horizontal well
(4H), having a 500 meter lateral and utilizing autonomous inflow
control device ("AICD") valves to maximize oil production;
- Drilled and completed the 5H well, the longest horizontal well
drilled in Peru. The well reached the target Vivian formation at a
vertical depth of 2,696 meters and then with an 863 meter
horizontal section inside the main productive oil reservoir;
- Commissioning of the new $31.6 million Central Production
Facility ("CPF") commenced on December 22, 2019 with the successful
hydrostatic test of the new 20,000 barrel oil storage tank;
- Earned net income of $18.2 million ($0.03 per share basic)
compared to a net loss of $2.2 million in Q4 2018;
- Higher operating net back of $28.6 million compared to $2.3 million in Q4 2018;
- For Q4 2019 the Company recognized funds flow generated of
$22.2 million, as compared to utilization of negative $1.9 million
in Q4 2018;
- Achieved a record quarterly oil production of 7,767 bopd, an
increase of 670% over Q4 2018 (1,158 bopd), and an increase of 63%
over Q3 2019 (4,760 bopd);
- Q4 2019 sales volumes averaged 9,509 bopd compared to 1,199 bopd in Q4 2018; and,
- Capital expenditures were $26.9 million in Q4 2019 compared to $4.4 million in Q4 2018.
2019 Operational Highlights
- At December 31, 2019 , six producing wells and one water
disposal were operating, inclusive of the initial water disposal
that was converted to an oil producer;
- The Company invested $88.4 million to drill five producing oil
wells, a water disposal well and build production facilities,
nearly a three fold increase from capital expenditures of $23.2
million in 2018;
- The Company achieved an exit rate production of 13,300 bopd at
the end of 2019 with the Q4 average being 7,767 bopd. PetroTal
produced a total of 1.5 million barrels of oil in 2019,
representing average oil production of 4,131 bopd, an increase of
431% from the average production of 958 bopd realized in 2018;
- NSAI Report shows increases in all reserve categories:
o Proved ("1P") reserves of 21.5 million barrels ("mmbbl"), an increase of 20% from the
17.9 mmbbl recorded at the end of 2018;
o Proved plus Probable ("2P") reserves of 47.7 mmbbl, an increase of 21% from the 39.4
mmbbl recorded at the end of 2018; and,
o Proved plus Probable and Possible ("3P") reserves of 84.8 mmbbl, an increase of 8%
from the 78.7 mmbbl recorded at the end of 2018;
- Net Present Value (before tax, discounted at 10%) ("NPV-10")
represents $434 million ($20.19/bbl) for 1P reserves, $1.1 billion
($23.02/bbl) for 2P reserves and $1.9 billion ($22.11/bbl) for 3P
reserves; and,
- Original oil in place ("OOIP") estimates for each category of
reserves also increased, with the 2P estimate increasing from 329
mmbbl to 364 mmbbl.
2019 Financial Highlights
- Generated revenue of $77 million ($52.32/bbl) compared to $10 million ($59.10/bbl) in 2018;
- Royalties to the Peruvian government were $3.4 million (4% of
revenue) during 2019 compared to $0.5 million (5% of revenue) for
2018;
- Generated funds from operations of $51.9 million compared to
$30 thousand in 2018, as a result of the significant increase in
revenue generation;
- Operating and transportation costs, were $31.9 million
($21.68/bbl) for 2019 compared to $4.9 million ($27.60/bbl) for
2018, an improvement of 22% on a per barrel basis;
- Net operating income (netback) in 2019 was $41.4 million
($28.09/bbl) compared to $5.1 million ($28.72/bbl) in 2018;
- Cash flow generated was $29.7 million compared to negative
$3.4 million in 2018. Cash flow represents netback inclusive of
G&A costs, realized gain (losses) on commodity contracts and
all other cash transactions; and,
- At December 31, 2019, the Company had cash of $21.1 million,
compared to $26.3 million at the end of 2018.
2019 Other Highlights
- On November 4, 2019, the Company announced the addition of Mr.
Douglas Urch, as Executive Vice President and Chief Financial
Officer of the Company;
- On December 12, 2019, the Company's board of directors
declared its inaugural dividend of $0.9 million to shareholders of
record on December 20, 2019; and,
- On December 19, 2019, Ms. Eleanor Barker and Dr. Roger Tucker
were appointed as Independent Non-Executive Directors.
The following table summarizes key financial and operating
highlights associated with the Company's performance for the years
ended December 31, 2019 and 2018. See the Financial Statements,
MD&A and AIF for further details.
December December
31 31
Results at a glance 2019 2018
=================================== ================================= ====================================
Financial
Crude oil revenues 77,024 10,487
Royalties (3,394) (493)
Commodity price derivatives 367 -
loss
Net operating income 41,719 5,096
Net income (loss) 20,152 (4,621)
Basic and diluted (US$/share) 0.03 (0.01)
Funds generated from
operations 51,061 30
Capital expenditures 88,763 23,207
Operating
Average production (bopd) 4,131 958
Average sales (bopd) 4,033 964
Average Brent oil price
(US$/barrel) 64.31 63.84
Average realized price
(US$/barrel) 52.32 59.10
Netback (US$/barrel) 28.09 28.72
Cash flow 29,692 (3,362)
=================================== ================================= ====================================
Balance sheet
Cash 21,101 26,259
Working Capital (11,762) 26,053
Total assets 194,181 96,097
Current liabilities 59,286 9,582
Equity 121,057 77,527
=================================== ================================= ====================================
Q4-19 FY 2019 Q4-18 FY 2018
$/bbl $/bbl $/bbl $/bbl
======== ================
Average
Production
SALES: (bopd) 7,767 4,131 1,158 958
Bbls Sold 874,802 1,472,042 110,287 177,465
Average Brent price
($/bbl) 63.26 64.31 63.84 63.84
Quarterly Difference
Variation price (%) -17.0% -18.6% -12.1% -7.4%
========================= ========== =================== ========== =================== ========== =================== ========== ====================
Average sold (bopd) 9,509 4,033 1,199 964
Oil revenue $52.49 $45,916 $52.32 $77,024 $56.09 $6,186 $59.10 $10,487
Less: Royalties $2.07 $1,813 $2.31 $3,394 $3.04 $336 $2.78 $493
Operating expense $6.91 $6,047 $9.73 $14,319 $22.82 $2,516 $19.73 $3,501
Transportation expense $11.09 $9,702 $11.95 $17,592 $9.32 $1,028 $7.87 $1,397
Derivative loss (income) -$0.24 ($213) $0.25 $367 $0.00 $0 $0.00 $0
========== =================== ========== =================== ========== =================== ========== ====================
NET OPERATING INCOME $32.65 $28,566 $28.09 $41,352 $20.91 $2,306 $28.72 $5,096
========== =================== ========== =================== ========== =================== ========== ====================
Netback as % of Revenue 62.2% 53.7% 37.3% 48.6%
========================= ========== =================== ========== =================== ========== =================== ========== ====================
G &
A $6.91 $6,048 $7.33 $10,789 $36.95 $4,075 $44.18 $7,840
Accretion expense $0.14 $126 $0.28 $416 $0.81 $89 $3.48 $618
Finance expense $0.27 $238 $0.31 $455 $0.00 $0 $0.00 $0
CASH FLOW $22,154 $29,692 ($1,858) ($3,362)
========== ========== ========== ==========
Deferred income taxes $0.05 $45 $0.06 $86 -$7.18 ($792) -$4.46 ($792)
Depletion and
depreciation $4.30 $3,760 $5.79 $8,528 $7.39 $815 $7.91 $1,404
Impairment and foreign
exchange $0.14 $126 $0.63 $927 $2.75 $303 $3.65 $647
========================= ========== =================== ========== =================== ========== =================== ========== ====================
Net Income (loss) $18,223 $20,152 ($2,184) ($4,621)
========================= ========== =================== ========== =================== ========== =================== ========== ====================
Manuel Pablo Zuniga-Pflucker, President and Chief Executive
Officer, commented:
"As a Company, we achieved a great deal in 2019. We set
ourselves a number of ambitious targets at the beginning of the
year and were able to meet or exceed all of them. We were also able
to generate significant value for our shareholders by increasing
our production by 431% year-on-year. Our ability to deliver an exit
rate of 13,300 bopd for 2019 is a testament to the expertise and
hard work of PetroTal's workforce during the period.
Whilst we are currently focusing on balance sheet strength and
liquidity, in light of the difficult trading environment, we remain
well placed to deliver value for all our stakeholders. In closing,
I would like to thank PetroTal's shareholders, directors, employees
and contractors for their continued support. We look forward to
announcing further developments as the year progresses."
ABOUT PETROTAL
PetroTal is a publicly--traded, dual--quoted (TSXV: TAL and AIM:
PTAL) oil and gas development and production company domiciled in
Calgary, Alberta, focused on the development of oil assets in Peru.
PetroTal's flagship asset is its 100% working interest in Bretaña
oil field in Peru's Block 95 where oil production was initiated in
June 2018 and in early 2020, became the second largest crude oil
producer in Peru. Additionally, the Company has large exploration
prospects and is engaged in finding a partner to drill the Osheki
prospect in Block 107. The Company's management team has
significant experience in developing and exploring for oil in
Northern Peru and is led by a Board of Directors that is focused on
safely and cost effectively developing the Bretaña oil field.
For further information, please see the Company's website at
www.petrotal-corp.com , the Company's filed documents at
www.sedar.com , or contact:
Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101
Manuel Pablo Zuniga-Pflucker
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 208 434 2643
Strand Hanson Limited (Nominated & Financial Adviser)
James Spinney / Ritchie Balmer
T: 44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Numis Securities Limited (Joint Broker)
John Prior / Emily Morris
T: +44 (0) 207 260 1000
READER ADVISORIES
FORWARD--LOOKING STATEMENTS: This press release contains certain
statements that may be deemed to be forward--looking statements.
Such statements relate to possible future events, including, but
not limited to: PetroTal's business strategy, objectives, strength
and focus; drilling and completion activities and the results of
such activities; construction of production facilities; the ability
of the Company to achieve drilling success consistent with
management's expectations; anticipated future production and
revenue; future development and growth prospects; and the Company's
ability to resume operations in accordance with developing public
health efforts to contain COVID-19. All statements other than
statements of historical fact may be forward--looking statements.
In addition, statements relating to expected production, reserves,
recovery, costs and valuation are deemed to be forward-looking
statements as they involve the implied assessment, based on certain
estimates and assumptions that the reserves described can be
profitably produced in the future. Forward-- looking statements are
often, but not always, identified by the use of words such as
"anticipate", "believe", "expect", "plan", "estimate", "potential",
"will", "should", "continue", "may", "objective" and similar
expressions. The forward--looking statements are based on certain
key expectations and assumptions made by the Company , including,
but not limited to, expectations and assumptions concerning the
ability of existing infrastructure to deliver production and the
anticipated capital expenditures associated therewith, reservoir
characteristics, recovery factor, exploration upside, prevailing
commodity prices and the actual prices received for PetroTal's
products, the availability and performance of drilling rigs,
facilities, pipelines, other oilfield services and skilled labour,
royalty regimes and exchange rates, the application of regulatory
and licensing requirements, the accuracy of PetroTal's geological
interpretation of its drilling and land opportunities, current
legislation, receipt of required regulatory approval, the success
of future drilling and development activities, the performance of
new wells, the Company's growth strategy, general economic
conditions and availability of required equipment and services .
Although the Company believes that the expectations and assumptions
on which the forward--looking statements are based are reasonable,
undue reliance should not be placed on the forward--looking
statements because the Company can give no assurance that they will
prove to be correct. Since forward--looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks), commodity price volatility, price
differentials and the actual prices received for products, exchange
rate fluctuations, legal, political and economic instability in
Peru, access to transportation routes and markets for the Company's
production, changes in legislation affecting the oil and gas
industry and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures. In addition, the Company cautions
that current global uncertainty with respect to the spread of the
COVID-19 virus and its effect on the broader global economy may
have a significant negative effect on the Company. While the
precise impact of the COVID-19
virus on the Company remains unknown, rapid spread of the
COVID-19 virus may continue to have a material adverse effect on
global economic activity, and may continue to result in volatility
and disruption to global supply chains, operations, mobility of
people and the financial markets, which could affect interest
rates, credit ratings, credit risk, inflation, business, financial
conditions, results of operations and other factors relevant to the
Company. Please refer to the risk factors identified in the AIF and
MD&A which are available on SEDAR at www.sedar.com. The
forward--looking statements contained in this press release are
made as of the date hereof and the Company undertakes no obligation
to update publicly or revise any forward--looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
FOFI DISCLOSURE: This press release contains future--oriented
financial information and financial outlook information
(collectively, "FOFI") about PetroTal's prospective results of
operations, production, NPV-10, future net revenue, future
development costs, temporary shut down of operations, the
anticipated resumption of operations, storage capacity, cost
reductions and components thereof, all of which are subject to the
same assumptions, risk factors, limitations and qualifications as
set forth in the above paragraphs. FOFI contained in this press
release was approved by management as of the date of this press
release and was included for the purpose of providing further
information about PetroTal's anticipated future business
operations. PetroTal disclaims any intention or obligation to
update or revise any FOFI contained in this press release, whether
as a result of new information, future events or otherwise, unless
required pursuant to applicable law. Readers are cautioned that the
FOFI contained in this press release should not be used for
purposes other than for which it is disclosed herein.
PRESENTATION OF OIL AND GAS INFORMATION: The reserves
information herein sets forth PetroTal's reserves as at December
31, 2019, as presented in the independent reserves report prepared
by NSAI, in accordance with the standards contained in the Canadian
Oil and Gas Evaluation Handbook (the "COGE Handbook") and the
reserve definitions contained in National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
In addition to the summary information disclosed in this
announcement and the press release dated February 18, 2020, more
detailed information is included in the AIF. This press release
contains metrics commonly used in the oil and natural gas industry,
such as operating netbacks (calculated on a per unit basis as oil
revenues less royalties and barging, pipeline and lifting costs).
These terms have been calculated by management and do not have a
standardized meaning and may not be comparable to similar measures
presented by other companies, and therefore should not be used to
make such comparisons. Management uses these oil and gas metrics
for its own performance measurements and to provide shareholders
with measures to compare PetroTal's operations over time. All oil
and gas disclosure contained in this press release complies with
the requirements of NI 51-101. The term original oil in place
(OOIP) is equivalent to total petroleum initially in place
("TPIIP"). TPIIP, as defined in the Canadian Oil and Gas Evaluation
Handbook, is that quantity of petroleum that is estimated to exist
in naturally occurring accumulations. It includes that quantity of
petroleum that is estimated, as of a given date, to be contained in
known accumulations, prior to production, plus those estimated
quantities in accumulations yet to be discovered. A portion of the
TPIIP is considered undiscovered and there is no certainty that any
portion of such undiscovered resources will be discovered. If
discovered, there is no certainty that it will be commercially
viable to produce any portion of such undiscovered resources. With
respect to the portion of the TPIIP that is considered discovered
resources, there is no certainty that it will be commercially
viable to produce any portion of such discovered resources. A
significant portion of the estimated volumes of TPIIP will never be
recovered.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EASKKFAAEEEA
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