PetroTal (TAL) Q3 2025 earnings summary

Executive summary

• Q3 2025 production averaged 18,414 bopd, up 21% year-over-year, but down 12% sequentially due to unscheduled downtime at the Bretana field; sales averaged 18,028 bopd, with 98.6% exported via Brazil.

• Adjusted EBITDA was $31.6 million ($19.03/bbl), and free funds flow was $12.1 million ($8.19/bbl); net income was $3.6 million, down $13.9 million from Q2 2025.

• Capital expenditures totaled $19.7 million, mainly for drilling, facility expansion, and erosion control at Bretana.

• The Board suspended the quarterly dividend to preserve liquidity amid delays in development drilling and weaker oil prices.

• Operational challenges included pump failures, tubing leaks, and maxed-out water handling capacity, with contingency plans in place for 2026.

Financial highlights

• Oil revenue for Q3 2025 was $71.9 million at a net realized price of $43.33/bbl, down from $80.1 million in Q2 2025.

• Operating expenses were $13.8 million ($8.34/bbl), and erosion control expenses rose to $6.5 million ($3.91/bbl).

• Net operating income was $44.5 million ($26.83/bbl), and adjusted EBITDA was $31.6 million.

• Total cash at quarter-end was $141.5 million, with $108.8 million unrestricted and $25 million restricted for the COFIDE/BanBif loan.

• Free cash flow for Q3 exceeded $12 million, with year-to-date free cash flow surpassing $87 million.

Outlook and guidance

• Production is expected to decline in H1 2026 due to delays in resuming development drilling; 2026 average production is forecast at 12,000–15,000 bopd, depending on drilling restart timing.

• Best-case 2026 scenario: rig arrives mid-year, enabling three new wells and potential exit production above 20,000 bbl/day.

• Low-case scenario: no new drilling in 2026, with focus on water handling investments and preparing for 2027 oil price recovery.

• The Board will prioritize cash preservation and may draw on reserves to fund the 2026/27 development program.

• 2026 budget and development plan to be finalized and disclosed in January.