TIDMPTAL
RNS Number : 8631J
PetroTal Corp.
26 August 2021
PetroTal Announces Q2 2021 Financial and Operating Results
PetroTal completes 8(th) producing well, increases water
disposal capacity, and outperforms Q2 2021 production guidance
under restricted flow conditions
Calgary, AB and Houston, TX - August 26, 2021- PetroTal Corp.
("PetroTal" or the "Company") (TSXV: TAL and AIM: PTAL) is pleased
to announce its financial and operating results for the six ("H1")
and three months ("Q2") ended June 30, 2021.
Selected financial and operational information is outlined below
and should be read in conjunction with the Company's unaudited
consolidated financial statements ("Financial Statements"), and
management's discussion and analysis ("MD&A") for Q2 2021,
which are available on SEDAR at www.sedar.com and on the Company's
website at www.PetroTal--Corp.com. All amounts herein are in United
States dollars ("USD") unless otherwise stated.
Highlights:
-- Outperformed Q2 2021 production guidance by 2% and Q1 2021
production by 21%, delivering 8,839 bopd under constrained
production conditions, as previously described in the Company's
July 20, 2021 RNS;
-- Generated a significant increase in revenue of $42.8 million
($53.20/bbl) in Q2 2021 versus $32.4 million ($41.91/bbl) in Q1
2021;
-- Achieved record netback and net operating income in Q2 2021
of $36.88/bbl and $29.7 million, respectively;
-- Operating and direct transportation costs in Q2 2021 were
$10.8 million ($13.45/bbl) as compared to $10.6 million
($13.78/bbl) in Q1 2021;
-- Generated free cash flow(1) , before leverage and working
capital adjustments, in Q2 2021 of $2.4 million and in H1 2021 of
$11.5 million, a record for the Company;
-- Strong liquidity position, building total cash quarter over
quarter to over $79.5 million as at June 30, 2021 up 5% from March
31, 2021. $25.4 million of total cash is restricted;
-- Net income of $11.4 million for the quarter, demonstrating an
efficient operating cost structure, attractive capital base, and
supportive fiscal terms;
-- All Q2 2021 bond covenants met with substantial headroom. The
Company exited Q2 2021 with a 0.41x leverage ratio which included
$40.6 million of net debt calculated per the bond indenture;
-- Continued to de-risk commodity price exposure that brings the
total corporate hedge percentage to 44% for the remaining four
months of 2021 forecast production, protecting prices of $60/bbl
Brent;
-- Necessary modifications to the water disposal system are
ongoing. The field can now actively dispose of approximately 80,000
barrels of water per day ("bwpd") and 100,000 bwpd when the
modifications are completed in September;
-- Achieved payback on well 7D, approximately 2.5 months post completion;
-- Current constrained production is 8,513 bopd (last seven-day
average to August 20, 2021). Unrestrained production is expected to
be restored in September;
-- Revised H2 2021 production guidance as a result of a
rescheduled and deferred drilling program stemming initially from
the COVID-19 protocol's impact and from the water disposal well
drilling delays. The 2021 average production range is now guided at
10,000 to 11,000 bopd (from 11,000 - 12,000 bopd). Exit December
2021 production has been slightly revised down to 17,000 - 18,000
bopd (from 18,000 - 19,000 bopd), as the impact of the BN-10H well
won't be incorporated until early next year;
-- Updated 2021 EBITDA(1) guidance is between $140 - $145
million for 2021, up materially from the original 2021 $90 million
budget;
-- Successfully drilled BN-8H subsequent to the quarter end
which is now being completed, and expected to be on time and under
budget;
-- Demonstrated importance of an expanded oil marketing strategy
with two scheduled Brazilian cargos contracted subsequent to the
quarter end;
-- Enhanced the Company's long-term sustainability vision by
establishing distinct objectives and performance measurements;
and,
-- Advanced government and community relations, ratifying the
process of social profit share in nearby communities around
PetroTal's oil operations.
(1) For a description of EBITDA and free cash flow, see Reader
Advisories - Non-GAAP Measures below .
Q2 2021 Webcast conference call
The Company will be hosting a conference call on August 26, 2021
at 9:00am Houston time. The link for the live webcast is below:
https://webcasting.brrmedia.co.uk/broadcast/6113a8920ddc2b060ef52b06
Selected Financial Highlights
Three Months Ended Six Months Ended
=============================== ======================== ========================
(in thousands USD) June 30, June 30, June 30, June 30,
2021 2020 2021 2020
=============================== ============= ========= ============= =========
Financial
Crude oil revenues $42,809 $7,413 $75,165 $39,658
Royalties (2,306) (123) (4,054) (1,929)
Net operating income 29,678 2,756 49,647 20,565
Commodity price derivative
(income)/loss 4,147 (18,264) (18,365) 22,156
Net income (loss) 11,374 16,029 42,159 (15,423)
Basic and diluted net income
(loss)(US$/share) 0.01 0.02 0.05 (0.02)
Capital expenditures 22,363 8,756 29,476 $32,628
================================ ============= ========= ========= =========
Operating
Average production (bopd) 8,839 4,185 8,089 6,936
Average sales (bopd) 8,842 4,729 8,711 7,521
Average Brent price ($/bbl) 68.83 29.19 64.28 39.67
Contracted sales price,
gross ($/bbl) 66.55 27.30 62.79 42.40
Netback (US$/barrel) 36.88 6.40 31.49 15.02
Funds flow provided by
(used in) operations 19,627 15,337 24,094 14,611
================================ ============= ========= ========= =========
Balance sheet
Cash and restricted cash 79,491 20,379
Working Capital 62,634 (31,845)
Total assets 359,788 216,899
Current liabilities 72,639 76,932
Equity 180,291 122,789
================================ ============= ========= ========= =========
Note:
(1) Funds flow provided by (used in) operations and netback do
not have any standardized meaning prescribed by GAAP and therefore
may not be comparable with the calculation of similar measures for
other entities. See "Non-GAAP Measures".
Q2 2021 Selected Operational Highlights
Completed the 7D well on April 30, 2021. The well was drilled
and completed at a revised final cost of $7.6 million, or 17% below
budget. Shortly after completion the well achieved rates in excess
of 4,500 bopd, is performing well above type curve expectations,
and has achieved payback in 2.5 months.
Commenced drilling and coring of the 3WD (water disposal) well.
PetroTal commenced drilling and coring of the 3WD well on May 3,
2021, which was completed subsequent to the quarter end on July 9,
2021. The overall operation and coring program on 3WD were a
success, with two cores cut allowing for a more thorough oil in
place estimate for the 2021 year-end reserves assessment. The
completion of the 3WD well also increased water disposal capacity
to 80,000 bwpd which provides enough capacity to achieve near term
production targets.
Outperformed Q2 2021 production guidance under restricted flow
conditions. Production averaged 8,839 bopd for Q2 2021 compared to
guidance of 8,655 bopd. This was 2% above guidance, 21% above Q1
2021, and 111% above Q1 2020 levels which were impacted by the
COVID-19 pandemic. Current field production is now 8,513 bopd.
Production was largely constrained during the quarter and during
the period subsequent due to operational delays on one of the water
disposal booster pumps, thereby reducing water disposal rates. The
water disposal modifications are still being completed and water
disposal capacity has returned to an estimated 80,000 bwpd with
water now being injected into both the 2WD and 3WD wells. A new 10"
pipeline connection to the facility water tanks was also installed
to increase water injection rates. When completed, total available
water disposal capacity will be 100,000 bwpd.
Revised H2 2021 guidance. Due to the recent drilling delay, that
pushes the impact of the BN-10H well to early next year, PetroTal
has rescheduled its H2 2021 development drilling plan. As a result,
PetroTal is now scheduled to bring two additional wells onstream in
2021 instead of the previously planned three. The third well is now
expected onstream in January 2022. Accrued drilling costs on the
deferred well will still materially be captured in Q4 2021, with
January 2022 now receiving the flush production benefit instead of
December 2021. Capital expenditures are still materially on budget
at approximately $100 million for 2021.
2021 Guidance New Original Variance
Summary
Average 2021 Brent $67.30/bbl $50.00/bbl $17.30/bbl
Price ($/bbl)
--------------------------- --------------------------- ---------------------------
2021 Production
Range
(bopd) 10,000 - 11,000 11,000 - 12,000 (0-1,000)
--------------------------- --------------------------- ---------------------------
Q3 2021 Production
(bopd) 9,500 - 10,000 11,500 - 12,500 (1,500-3,000)
--------------------------- --------------------------- ---------------------------
Q4 2021 Production
(bopd) 16,000 - 16,500 16,000 - 17,000 (0-500)
--------------------------- --------------------------- ---------------------------
2021 Exit
Production
(bopd) 17,000 - 18,000 18,000 - 19,000 (1,000)
--------------------------- --------------------------- ---------------------------
Oil Wells Commenced 4 5 (1)
--------------------------- --------------------------- ---------------------------
Oil Wells Completed 3 4 (1)
--------------------------- --------------------------- ---------------------------
$140 - $145
EBITDA million $90 million $50-$55 million
--------------------------- --------------------------- ---------------------------
EBITDA Netback $35.50/bbl $21.40/bbl $14.10/bbl
($/bbl)
--------------------------- --------------------------- ---------------------------
Completed drilling of BN-8H on August 18, 2021. The well was
successfully drilled to a final depth of 4,200 meters as expected
on August 18, 2021. A total of 1,137 meters of 6-1/8" horizontal
section was drilled in very well-developed oil reservoir sands of
the Vivian formation. Completion operations are currently ongoing
on the BN-8H well and is on track for completion in early
September. Post completion of BN-8H, the rig will commence drilling
the next horizontal development well ("BN-9H") using a synthetic
mud system with a larger diameter drill pipe.
CPF-2 commissioning rescheduled. Due to COVID-19 quarantine
protocols, contractor personnel were removed from the field which
delayed CPF-2 commissioning work. Startup is now rescheduled for
late November and early December for the oil and water treatment
infrastructure. The rescheduling is not expected to impact the
ability for the field to handle new flush production rates.
Sales and Marketing update. The long-term Brazil export contract
PetroTal signed in Q1 2021 is playing a key role in ensuring our
ability to maintain oil production from any pipeline disruptions.
Two ongoing back-to-back exports via Brazil have allowed us to
maintain production during a recent social dispute that shut down
Petroperu's ONP pump station one near Saramurillo, in late July
2021. The disruption is expected to be resolved shortly with
pipeline operations restored thereafter. As part of PetroTal's new
diversified marketing strategy, the Company was able to secure two
back-to-back 240,000 bbl cargo shipments to Brazil in Q3 2021 and
sold FOB Bretana. Netbacks from these sales are competitive with
the ONP, and PetroTal anticipates no sales disruptions due to the
ONP closure. We are working diligently with Petroperu and the
Peruvian Government, as well as Saramurillo's leaders, to provide
assistance, as needed.
Q2 2021 Selected Financial and Corporate Highlights
Significant liquidity and working capital in hand. PetroTal
continues to strengthen its liquidity position. Q2 2021 ending cash
totaled $79.5 million, up $3.6 million from March 31, 2021 and up
$59.1 million from June 30, 2020 due to proceeds from the Q1 2021
bond issuance. Current net working capital (defined as current
assets less current liabilities) continues to show a strong
position, ending Q2 2021 in a $62.6 million surplus position vs a
$68.2 million surplus ending in Q1 2021. At June 30, 2021, accounts
payable and accrued liabilities were approximately $38.6
million.
Record Net Operating Income ("NOI"). PetroTal generated a record
$29.7 million ($36.88/bbl) of NOI in the quarter, an increase of
$26.9 million over Q2 2020 and $9.7 million over Q1 2021, due to
higher realized Brent prices and increased oil production.
Lower per barrel operating costs. Operating costs were flat
quarter over quarter at $10.8 million for Q2 2021 versus $10.6
million for Q1 2021 despite the price of diluent increasing
significantly in conjunction with the Brent oil price. On a per
barrel basis, total operational costs were down 2% at $13.45/bbl in
Q2 2021 versus $13.78/bbl in Q1 2021.
Strong royalty profile. Royalties for the quarter were $2.3
million or $2.87/bbl versus $1.7 million or $2.26/bbl in Q1 2021.
The increase was due to higher realized Brent prices and higher
production for Q2 2021.
Capital expenditures ("CAPEX"). Capital expenditures for Q2 2021
totaled $22.4 million, up 215% from Q1 2021 due to active drilling
activity for the majority of the quarter versus little activity in
Q1 2021. In total, year to date expenditures were $29.5 million
which is $16.5 million below guidance due to the rescheduling of
various facility and infrastructure projects into H2 2021. The
CPF-2 completion and commissioning dates are now expected late in
2021.
Positive free cash flow generation in H1 2021 . PetroTal is
pleased to announce it generated record free cash flow in H1 2021
(before changes in working capital), with Q2 2021 contributing
another $2.4 million to free cash flow in a drilling heavy quarter.
H1 2021 funds flow from operations (before working capital
adjustments) totaled $40.9 million, and after total capital
expenditures of $29.5 million, resulted in a total of $11.5 million
of free cash flow in H1 2021. This was due to robust H1 2021 Brent
prices, deferred infrastructure projects into H2 2021 and favorable
operating costs. PetroTal estimates that it will continue to
generate free cash flow in H2 2021.
Continued positive Net Income. Net income for Q2 2021 was $11.4
million versus $16.0 million in Q2 2020 and $30.8 million in Q1
2021. Based on low cumulative capital of approximately $184 million
invested in the asset since 2018, favorable commodity prices and a
strong operating cost structure, continued positive earnings are
anticipated. For Q2 2021, a $4.1 million derivative loss was
realized versus $22.5 and $18.3 million derivative gains in Q1 2021
and Q2 2020, respectively.
Derivative Asset. PetroTal continues to recognize a material
derivative asset on its balance sheet. At June 30, 2021, the
Company recorded a $31.2 million derivative asset and a $1.4
million derivative liability versus a $39.7 million derivative
asset at March 31, 2021 and a $22.5 million liability at June 30,
2020. When the Q1 2021 bond proceeds were received the derivative
liability was extinguished and hedges were put in place on oil
moving through the ONP. The difference between the Brent prices
creating the extinguished liability and the prices at hedged strip
created the derivative asset that the Company will continue to
realize throughout H2 2021 and early 2022, as physical sales at the
port of Bayovar occur by Petroperu. To date, the Company has
realized a cash gain of $7.1 million in true up revenue with the
remainder of production in the ONP secured by hedges to be received
over the next 12 months.
Hedging Update. At June 30, 2021 the Company has outstanding
corporate hedges on approximately 677,481 bbls in both put and
synthetic put structures expiring from July to Dec 2021. On August
23, 2021 the Company layered in additional hedges totaling 304,626
bbls using a put structure with $60/bbl strike prices, bringing the
percentage of hedged forecast volumes to 44% for September to
December 2021. In partnership with Petroperu, the Company also has
approximately 2.24 million barrels hedged in the ONP, with
approximately 80% of barrels locked in between $60 and $62/bbl
Brent and more recent hedges, totaling approximately 20% of barrels
in the ONP, hedged at approximately $70/bbl Brent.
Strong Balance Sheet. PetroTal reported net debt of
approximately $22.7 million as at June 30, 2021 as calculated for
valuation purposes, which includes balance sheet derivatives and
$40.6 million as calculated for bond covenants. For bond covenant
purposes the Q2 2021 net debt to adjusted EBITDA covenant was 0.41x
against a maximum ratio of 3.0x leaving substantial buffer room to
withstand potential commodity price volatility and / or accretive
M&A transactions.
2020 Sustainability Report Long Term Vision
As previously announced, PetroTal's 2020 sustainability report
is available on the Company's website. In addition, PetroTal is in
the process of finalizing its long term sustainability objectives
and targets for 2023, 2025, and 2030. Below, are the key components
that summarize the long term vision:
Environmental Commitment - emissions, use of technology, climate
impact, waste management, biodiversity, accident prevention.
Shared Values and Alignment - community alignment and
commitment, supplier process, talent and community training and
development.
Governance - Ethics management, risk management, human rights,
inclusion, macroeconomic values.
Health and Safety - safety of employees, suppliers and
contractors.
Detailed objectives have been drafted and set by management with
measurement and outcomes currently being finalized and approved by
the board of directors. Details will be available to investors on
the PetroTal website in the coming quarters.
Recent Project Nomination. PetroTal is pleased to announce that
it has been recognized as one of three companies in the oil and gas
sector for its citizen socio environmental monitoring program
(PROMOSAC). The formal document from the Ministry of Energy is now
available here:
https://cdn.www.gob.pe/uploads/document/file/2069295/Programa%20de%20Reconocimiento%20CER%20_Julio2021.pdf.pdf
Community Relations Update . On August 10(th) , 2021, the
Minister of Energy and Mines, Ivan Merino Aguirre, met with a
delegation of PetroTal management that included Manolo Zuniga, CEO
of PetroTal. Management presented various proposals that will
promote continued investment in the energy sector and encourage
collaboration between the Ministry and Company. The Company renewed
its commitment to work directly with local communities in the
Puinahua District of Bretana, to promote investment and training to
further harmonize relations between operators. In turn, the
Ministry offered assurances that social profitability and peace
will be applied directly with community leaders from PetroTal's
resource operations to avoid intermediaries and thereby reducing
potential social conflict. The news article can be found here:
https://bit.ly/2VziOgx
In addition, Manolo Zuniga, attended recent anniversary meetings
with families and associates impacted by the violent social
demonstration that occurred outside Bretana just over a year ago.
The Company delegation offered families condolences, support, and
assistance for remembrance and respect for the lives that were
lost.
Updated Corporate Presentation . Please see PetroTal's website
for an updated version.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive
Officer, commented
"We are pleased to share our strong second quarter results which
demonstrate continued operational success and resilience in the
face of challenges. Our Q2 2021 results were strong, contributing
to record net operating income, netbacks, and free cash flow in Q2
2021 and H1 2021 which we anticipate will continue in H2 2021.
Despite the water disposal bottlenecks and drilling delays we
slightly outperformed production guidance in Q2 2021. With the
booster pump issue now fixed and new pipeline infrastructure being
put in place we will be able to utilize full water disposal
capacity. Wells BN-8H and 9H, on production in H2 2021, are
anticipated to lift PetroTal's production to record levels. We are
also again reminded that our battle with COVID-19 is not to be
underestimated, as we experienced some CFP-2 installation delays
which, fortunately should not impact the Company's ability to bring
on new oil production in H2 2021. The Company continues to allocate
appropriate capital to fighting the COVID-19 pandemic and make
health and safety a top priority for all our employees and
contractors."
ABOUT PETROTAL
PetroTal is a publicly traded, dual--quoted (TSXV: TAL and AIM:
PTAL) oil and gas development and production Company domiciled in
Calgary, Alberta, focused on the development of oil assets in Peru.
PetroTal's flagship asset is its 100% working interest in Bretana
oil field in Peru's Block 95 where oil production was initiated in
June 2018, and in early 2020 became the second largest crude oil
producer in Peru. Additionally, the Company has large exploration
prospects and is engaged in finding a partner to drill the Osheki
prospect in Block 107. The Company's management team has
significant experience in developing and exploring for oil in Peru
and is led by a Board of Directors that is focused on safely and
cost effectively developing the Bretana oil field.
For further information, please see the Company's website at
www.petrotal-corp.com , the Company's filed documents at
www.sedar.com , or below:
Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101
PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 208 434 2643
Strand Hanson Limited (Nominated & Financial Adviser)
James Spinney / Ritchie Balmer
T: 44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This press release contains certain
statements that may be deemed to be forward-looking statements.
Such statements relate to possible future events, including, but
not limited to: PetroTal's business strategy, objectives, strength
and focus; drilling, completions, workovers and other activities
and the anticipated costs and results of such activities; the
ability of the Company to achieve drilling success consistent with
management's expectations; the ability of the Company to achieve
near term production targets; anticipated future production and
revenue; drilling plans including the timing of drilling,
commissioning, and startup; startup plans for oil and water
treatment infrastructure, including the timing of startup plans and
the impact of delays thereon; oil production levels, including
average production and exit production in 2021; the 2021 capital
program and budget, including drilling plans; expectations
regarding accrued drilling costs on deferred wells and allocation
of flush production benefits; the timing of river embankment
erosion work; COVID-19 surveillance and control process; hedging
program, the terms thereof, and the Company's expectations
regarding its hedged positions; cargo loading and shipments,
including the timing of loading and shipping and expectations
regarding sales from cargo shipments; the Company's expectations
regarding net operating income, netbacks, liquid net working
capital and free cash flow; the Company's long-term sustainability
objectives and targets, and the timing thereof; the Company's
proposals for continuous investment in the energy sector and
collaboration with local communities; and future development and
growth prospects. All statements other than statements of
historical fact may be forward-looking statements. In addition,
statements relating to expected production, reserves, recovery,
costs and valuation are deemed to be forward-looking statements as
they involve the implied assessment, based on certain estimates and
assumptions that the reserves described can be profitably produced
in the future. Forward-looking statements are often, but not
always, identified by the use of words such as "anticipate",
"believe", "expect", "plan", "estimate", "potential", "will",
"should", "continue", "may", "objective" and similar expressions.
The forward-looking statements are based on certain key
expectations and assumptions made by the Company, including, but
not limited to, expectations and assumptions concerning the ability
of existing infrastructure to deliver production and the
anticipated capital expenditures associated therewith, the ability
of the Ministry of Energy to effectively achieve its objectives in
respect of reducing social conflict and collaborating towards
continued investment in the energy sector, reservoir
characteristics, recovery factor, exploration upside, prevailing
commodity prices and the actual prices received for PetroTal's
products, including pursuant to hedging arrangements, the
availability and performance of drilling rigs, facilities,
pipelines, other oilfield services and skilled labour, royalty
regimes and exchange rates, the application of regulatory and
licensing requirements, the accuracy of PetroTal's geological
interpretation of its drilling and land opportunities, current
legislation, receipt of required regulatory approval, the success
of future drilling and development activities, the performance of
new wells, the Company's growth strategy, general economic
conditions and availability of required equipment and services.
Although the Company believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because the Company can give no assurance that they will
prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks), commodity price volatility, price
differentials and the actual prices received for products, exchange
rate fluctuations, legal, political and economic instability in
Peru, access to transportation routes and markets for the Company's
production, changes in legislation affecting the oil and gas
industry and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures. In addition, the Company cautions
that current global uncertainty with respect to the spread of the
COVID-19 virus and its effect on the broader global economy may
have a significant negative effect on the Company. While the
precise impact of the COVID-19 virus on the Company remains
unknown, rapid spread of the COVID-19 virus may continue to have a
material
adverse effect on global economic activity, and may continue to
result in volatility and disruption to global supply chains,
operations, mobility of people and the financial markets, which
could affect interest rates, credit ratings, credit risk,
inflation, business, financial conditions, results of operations
and other factors relevant to the Company. Please refer to the risk
factors identified in the MD&A and the most recent annual
information form which are available on SEDAR at www.sedar.com. The
forward-looking statements contained in this press release are made
as of the date hereof and the Company undertakes no obligation to
update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
OIL AND GAS INFORMATION: References in this press release to
short--term production rates are useful in confirming the presence
of hydrocarbons, however such rates are not determinative of the
rates at which such wells will commence production and decline
thereafter and are not indicative of long term performance or of
ultimate recovery. While encouraging, readers are cautioned not to
place reliance on such rates in calculating the aggregate
production for PetroTal. The Company cautions that the such results
should be considered to be preliminary.
OIL REFERENCES: All references to "oil" or "crude oil"
production, revenue or sales in this press release mean "heavy
crude oil" as defined in NI 51-101. All references to Brent
indicate Intercontinental Exchange ("ICE") Brent.
NON-GAAP MEASURES: This press release contains financial terms
that are not considered measures under generally accepted
accounting principles ("GAAP") such as EBITDA, EBITDA netback,
operating netback, funds flow provided by operations, liquid net
working capital and free cash flow that do not have any
standardized meaning under GAAP and may not be comparable to
similar measures presented by other companies. Management uses
these non-GAAP measures for its own performance measurement and to
provide shareholders and investors with additional measurements of
the Company's efficiency and its ability to fund a portion of its
future capital expenditures. EBITDA is calculated as consolidated
net income (loss) before interest and financing expenses, income
taxes, depletion, depreciation and amortization adjusted for
certain non-cash, extraordinary and non-recurring items primarily
relating to unrealized gains and losses on financial instruments
and impairment losses. PetroTal utilizes EBITDA as a measure of
operational performance and cash flow generating capability. EBITDA
impacts the level and extent of funding for capital projects
investments. EBITDA netback is calculated as EBITDA divided by the
number of barrels sold in the period. The Company considers
operating and EBITDA netbacks to be a key measure as they
demonstrate Company's profitability relative to current commodity
prices. Netback is calculated by dividing net operating income by
barrels sold in the corresponding period. Funds flow provided by
operations, is a non-GAAP measure that includes all cash generated
from operating activities and is calculated before changes in
non-cash working capital. A reconciliation from cash provided by
operating activities to funds flow provided by operations is
included in the MD&A. Liquid net working capital is a measure
that includes cash, receivables, payables and short-term
obligations. Free cash flow is operating cash flow before hedging
minus maintenance capital expenditures.
FOFI DISCLOSURE: This press release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about PetroTal's prospective results of
operations, production and production capacity, 2021 capital
program and budget, cash flow profile, free cash flow, liquidity
and components thereof, all of which are subject to the same
assumptions, risk factors, limitations and qualifications as set
forth in the above paragraphs. FOFI contained in this press release
was approved by management as of the date of this press release and
was included for the purpose of providing further information about
PetroTal's anticipated future business operations. PetroTal
disclaims any intention or obligation to update or revise any FOFI
contained in this press release, whether as a result of new
information, future events or otherwise, unless required pursuant
to applicable law. Readers are cautioned that the FOFI contained in
this press release should not be used for purposes other than for
which it is disclosed herein. All FOFI contained in this press
release complies with the requirements of Canadian securities
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IR SEDSIMEFSEDA
(END) Dow Jones Newswires
August 26, 2021 02:00 ET (06:00 GMT)
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