Broker notePetroTal has released its end 2023 reserves update, reporting an increase in 2P reserves from 96.7mmbbl to 100.2mmbbl, and a larger uptick in 3P reserves, from 168.3mmbbl to 199.6mmbbl. In our view, this continues to demonstrate the attractiveness of the company’s Bretana field, and the longevity of this for company growth and cash flows
Current production continues strongly. Average PetroTal January 2024 production is reported ahead of company expectations.
Overall, in our view this represents good progress for PetroTal. Production for 2023 has been more than replaced in the overall 2P reserves number, forward OPEX expectations are reduced (reflecting the company’s ongoing cost saving efforts)
The company has a strong balance sheet, holding US$111m of net cash at the end of 2023, PetroTal establishing a regular dividend of 6c/share from Q1 2023, implying an 11% yield at current levels. As such, PetroTal offers investors regular drilling news flow, strong and growing production based on a material asset, significant cash flows underpinned by the variety of export routes, and an increasingly established dividend.
We believe PetroTal continues to be well set for production and cash flow growth, alongside ongoing shareholder returns, all supported by its strong net cash balance sheet