PetroTal (TAL) Q2 2024 earnings summary

Executive summary

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

• Net income for Q2 2024 was $35.4 million, with free funds flow of $36.3 million and EBITDA of $69.5 million; exited Q2 with $95.9 million in cash and a net surplus of $50.3 million.

• Maintains status as Peru's largest crude oil producer, with a market cap of $504 million and 100% interest in the Bretaña field.

• Continued focus on the Bretaña oil field and expansion through the acquisition of Block 131, with closing expected later in 2024.

• Declared a $0.015/share dividend payable September 13, 2024, and repurchased 1.2 million shares, returning ~$15 million to shareholders.

Financial highlights

• Q2 2024 net revenue was $103.1 million ($62.76/bbl), up from $100.6 million in Q1 2024.

• Adjusted EBITDA for Q2 2024 was $75.2 million, up from $72.0 million in Q1 2024.

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

• Free funds flow for Q2 was $36.3 million, down from $41.7 million in Q1, with $78 million generated YTD.

• Capital expenditures increased to $38.9 million in Q2 2024, up 28% from Q1 2024 due to increased drilling.

Outlook and guidance

• Q3 2024 production expected to average ~13,000 bbl/d due to dry season; annual guidance maintained at 16,500–17,500 bbl/d.

• 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.

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

• Block 131 acquisition expected to close in Q4 2024, with new drilling proposed for late 2024/early 2025.