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Oil Co. Exceeding Production Estimates

Source: Stephane Foucaud

May 2, 2023 (Investorideas.com Newswire) This oil company released a strong operational update at the end of 1Q23, noted a Auctus Advisor's research note.

PetroTal Corp. (PTALF:OTCMKTS;PTAL:AIM) has released a promising report at the end of 1Q23 showing that oil production is performing better than previously expected.

Stephane Foucaud of Auctus Advisors writes: "1Q23 production was 12,618 bbl/d, above our expectations of 11,500 bbl/d. Oil sales continued to be very high in March at 21,500 bbl/d with 19,565 bbl/d sold through Brazil and the balance to Iquitos, with production averaging > 20 mbbl/d for more than 60 consecutive days."

PetroTal is experiencing generous returns for its shareholders through a share buyback program that allows up to 10% of the share capital over a 12-month period in 2023. With a US$0.015 per share quarterly dividend, investors are seeing an annual dividend of around 13%.

Review of Results

Foucaud presented the key points of PetroTal's latest reports.

The company expects a few catalysts in 2023 that could increase production even further.

"The Northern Peruvian Pipeline (ONP) has also resumed operations, and PetroTal estimates that ~270,000 bbbl of oil will be exported in late 2Q23 at Bayovar, generating US$5-7 mm in net revenue," according to Foucaud's report. However, the company is currently not exporting new volumes of oil through this pipeline until credit lines are guaranteed for payment from Petroperu.

At the same time, PetroTal has put Well 14H into production and is producing 3/mmbl/d, which is within expectations and performing at a similar initial rate to Well 12H.

Valuation

Foucaud maintains Auctus' previous target price of £1.50 per share, noting that "[t]he story continues to be about significant free cash flow generation, production, and reserves growth."

PetroTal continues to commit to producing 14-15mmbbl/d for this year, even expecting a potential of up to 17mmbbl/d later in 2023.

Structure and Predictions

The company has outperformed its own cash productions for the first quarter of this year by US$15 mm, coming in with a working capital surplus of US$104 mm.

Following the audit of the FY22 accounts, additional tax loss pools are now available to offset the FY23 tax. This results in an additional US$30 mm free cash flow in 2023. We now forecast that PetroTal will hold US$190 mm in working capital at YE23 (~US$160 mm previously)," Foucaud reports.

Auctus' valuations have increased, with a Core NAV of £1.13/sh and a ReNAV of £1.52/sh. The company is expected to distribute US$41 mm in dividends this year, US$56 mm next year while continuing to maintain over 50% of the current market cap in working capital.

PetroTal has 950 mm shares diluted and is estimated to reach 944 mm by the end of 2023. Its market cap is currently US$541 mm with anticipated marginal growth. The current share price is £0.46 and the price target is £1.50.

Disclosures:

1) Cori Rupe wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

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Disclosures for Auctus Advisors, PetroTal Corp., April 25, 2023

Copyright and Risk Warnings PetroTal Corp. ("PetroTal" or the "Company") is a corporate client of Auctus Advisors LLP ("Auctus"). Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time. MiFID II Disclosures This document, being paid for by a corporate issuer, is believed by Auctus to be an 'acceptable minor non-monetary benefit' as set out in Article 12 (3) of the Commission Delegated Act C(2016) 2031 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. It is produced solely in support of our corporate broking and corporate finance business. Auctus does not offer a secondary execution service in the UK. This note is a marketing communication and NOT independent research. As such, it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and this note is NOT subject to the prohibition on dealing ahead of the dissemination of investment research. Author The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus. Not an offer to buy or sell Under no circumstances is this note to be construed to be an offer to buy or sell or deal in any security and/or derivative instruments. It is not an initiation or an inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000. Note prepared in good faith and in reliance on publicly available information Comments made in this note have been arrived at in good faith and are based, at least in part, on current public information that Auctus considers reliable, but which it does not represent to be accurate or complete, and it should not be relied on as such. The information, opinions, forecasts and estimates contained in this document are current as of the date of this document and are subject to change without prior notification. No representation or warranty either actual or implied is made as to the accuracy, precision, completeness or correctness of the statements, opinions and judgements contained in this document. Auctus' and related interests The persons who produced this note may be partners, employees and/or associates of Auctus. Auctus and/or its employees and/or partners and associates may or may not hold shares, warrants, options, other derivative instruments or other financial interests in the Company and reserve the right to acquire, hold or dispose of such positions in the future and without prior notification to the Company or any other person. Information purposes only This document is intended to be for background information purposes only and should be treated as such. This note is furnished on the basis and understanding that Auctus is under no responsibility or liability whatsoever in respect thereof, whether to the Company or any other person. Investment Risk Warning The value of any potential investment made in relation to companies mentioned in this document may rise or fall and sums realised may be less than those originally invested. Any reference to past performance should not be construed as being a guide to future performance. Investment in small companies, and especially upstream oil & gas companies, carries a high degree of risk and investment in the companies or commodities mentioned in this document may be affected by related currency variations. Changes in the pricing of related currencies and or commodities mentioned in this document may have an adverse effect on the value, price or income of the investment. Distribution This document is directed at persons having professional experience in matters relating to investments to whom Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("FPO") applies, or high net worth organisations to whom Article 49 of the FPO applies. The investment or investment activity to which this communication relates is available only to such persons and other persons to whom this communication may lawfully be made ("relevant persons") and will be engaged in only with such persons. This Document must not be acted upon or relied upon by persons who are not relevant persons. Without limiting the foregoing, this note may not be distributed to any persons (or groups of persons), to whom such distribution would contravene the UK Financial Services and Markets Act 2000 or would constitute a contravention of the corresponding statute or statutory instrument in any other jurisdiction. Disclaimer This note has been forwarded to you solely for information purposes only and should not be considered as an offer or solicitation of an offer to sell, buy or subscribe to any securities or any derivative instrument or any other rights pertaining thereto ("financial instruments"). This note is intended for use by professional and business investors only. This note may not be reproduced without the prior written consent of Auctus. The information and opinions expressed in this note have been compiled from sources believed to be reliable but, neither Auctus, nor any of its partners, officers, or employees accept liability from any loss arising from the use hereof or makes any representations as to its accuracy and completeness. Any opinions, forecasts or estimates herein constitute a judgement as at the date of this note. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied is made regarding future performance. This information is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company and its subsidiaries. Auctus is not agreeing to nor is it required to update the opinions, forecasts or estimates contained herein. The value of any securities or financial instruments mentioned in this note can fall as well as rise. Foreign currency denominated securities and financial instruments are subject to fluctuations in exchange rates that may have a positive or adverse effect on the value, price or income of such securities or financial instruments. 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