PetroTal (TAL) Q2 2024 earnings summary

Executive summary

• Q2 2024 production averaged 18,290 barrels per day, with sales of 18,050 barrels per day, supported by new horizontal wells and despite an eight-day river blockade; July production exceeded 20,000 barrels per day.

• Bretaña field remains the flagship asset, now with 20 oil wells and four water disposal wells, and production exceeded 20,000 barrels per day in June and July.

• Acquired Block 131 (Los Angeles field) for $5 million, currently producing 800–1,000 barrels per day, with potential to increase to 5,500 barrels per day; closing expected in Q4 2024, pending regulatory approval.

• Maintained a strong balance sheet with $95.9 million in total cash, including $85.1 million unrestricted, and a net surplus of $50.3 million at quarter-end.

• Continued return of capital to shareholders: $0.015 quarterly dividend, $89 million returned since 2023, and nearly 18 million shares repurchased since 2022.

Financial highlights

• Q2 2024 net revenue was $103.1 million ($62.76/bbl), up from $100.6 million in Q1; net operating income reached a record $80 million.

• EBITDA for Q2 2024 was $69.5 million, flat sequentially; H1 2024 EBITDA exceeded $140 million.

• Net income for Q2 2024 was $35.4 million, down from $47.6 million in Q1, but YTD net income of $83 million matches the prior year.

• CapEx in Q2 totaled $38.9 million, mainly for drilling and infrastructure, up 28% from Q1.

• Free funds flow for Q2 2024 was $36.3 million, down from $41.7 million in Q1 and $45.0 million in Q2 2023.

Outlook and guidance

• Q3 2024 production guidance maintained at ~13,000 barrels per day due to seasonal dry period; annual guidance set at 16,500–17,500 barrels per day.

• Full-year 2024 EBITDA guidance raised to $200–$240 million, above original $200 million.

• Adjusted after-tax free funds flow forecast up to $55 million for 2024, with capital budget increases offset by higher EBITDA.

• Capital spending guidance increased to $150–$175 million for 2024, reflecting accelerated drilling and water handling projects.

• Three additional production wells accelerated into Q4 2024, saving over $80 million in standby fees.