This is a mail from Petrotal to another shareholder, copied Rafael fik svar i den anden gruppe.===((Rafael got answers in the second group.))
Hello Rafael and thank you for your email and interest in PetroTal. We would agree with your assessment that this is an exciting time for the company as both financial and technical fundamentals have never been stronger! We appreciate your thoughtfulness around the election rumblings and offer the following management commentary regarding todays share price volatility:
1. Two large block trades made today materially moved the market placing some downward pressure on the share price. We believe this was a knee jerk reaction.
2. In addition to point 1 above, knee jerk macro reactions to news events are a market standard now(currency, etc), from an international perspective, and we believe this will normalize in a short period of time going forward. Given management's deep bench and experience in international oil and gas, we have heard commentary like this before when election time rolls around and no matter who is elected, candidate's policy softens greatly vs what is said to a crowd at a pre election rally.
3. Nothing fundamentally has changed with the company from a technical and operational perspective. As stated in previous news releases, we believe the company is in a strong financial and technical position as we look to execute our 2021 drilling program.
4. PetroTal does not wish, at this time, to comment publicly on political events in country that could polarize investors, or other non investment stakeholders.
5. We believe the market has overreacted to commentary from Castillo on nationalization of industry when in fact, we found that a deeper dive into his policy would likely indicate a potential country wide royalty review of all industry(including oil and gas)
6. We believe based on Humala in 2011 that extreme commentary(either right or left) will eventually translate into a more center message to gain more votes as the election progresses
7. High absenteeism among the middle and upper classes, that tend to vote center and center right exist, which should be visible over the next 2 months given the second round voting is on June 6
8. We feel extreme commentary regarding industry will never be followed through with actual policy given the recent massive 4B government bond raise and recent material external capital injections into the country. External market capital still wants to enter the country, and frankly already has. We feel this will backstop and be considered in important policy decisions no matter what government is elected. Nationalization of industry would obviously have negative implications on future external capital inflows into Peru, and given the recent ones into the country, could have covenants attached to them to further help facilitate level headed decisions when pen hits the paper.