PetroTal Announces Q2 2024 Financial and Operating Results
PetroTal announced its Q2 2024 financial and operating results, highlighting significant achievements.
Average production and sales were 18,290 bopd and 18,050 bopd, respectively, generating $69.5 million in EBITDA and $36 million in free funds flow. The company ended the quarter with $96 million in total cash and declared a $0.015/share dividend payable on Sept 13, 2024.
PetroTal drilled two new oil wells, with Well 19H achieving a 30-day average of 6,860 bopd. The acquisition of Block 131 was signed, enhancing its production capabilities. The company's OCP route to Ecuador received all necessary regulatory approvals with actual sales expected in October 2024.
Q2 2024 net income was $35.4 million ($0.04/share). Capital expenditures were $38.9 million. The company repurchased 1.2 million common shares.
Guidance reaffirms 16,500-17,500 bopd production for 2024, with an estimated EBITDA range of $200-$240 million. The company secured a $20 million line of credit with JP Morgan.
PetroTal ha annunciato i risultati finanziari e operativi del secondo trimestre 2024, evidenziando risultati significativi.
La produzione e le vendite medie sono state pari a 18.290 bopd e 18.050 bopd, generando un EBITDA di 69,5 milioni di dollari e un flusso di fondi liberi di 36 milioni di dollari. La società ha chiuso il trimestre con 96 milioni di dollari in contante totale e ha dichiarato un dividendo di 0,015 dollari per azione, pagabile il 13 settembre 2024.
PetroTal ha perforato due nuovi pozzi petroliferi, con il Pozzo 19H che ha raggiunto una media di 6.860 bopd nei 30 giorni. È stato firmato l'acquisto del Blocco 131, migliorando le proprie capacità di produzione. La rotta OCP della società verso l'Ecuador ha ricevuto tutte le approvazioni normative necessarie, con vendite effettive previste per ottobre 2024.
Il reddito netto del secondo trimestre 2024 è stato di 35,4 milioni di dollari (0,04 dollari per azione). Le spese in conto capitale sono state di 38,9 milioni di dollari. La società ha riacquistato 1,2 milioni di azioni ordinarie.
Le previsioni confermano una produzione di 16.500-17.500 bopd per il 2024, con un range di EBITDA previsto di 200-240 milioni di dollari. La società ha ottenuto una linea di credito di 20 milioni di dollari con JP Morgan.
PetroTal anunció sus resultados financieros y operativos del segundo trimestre de 2024, destacando logros significativos.
La producción y las ventas promedio fueron de 18,290 bopd y 18,050 bopd, generando 69.5 millones de dólares en EBITDA y 36 millones de dólares en flujo de fondos libre. La compañía terminó el trimestre con 96 millones de dólares en efectivo total y declaró un dividendo de 0.015 dólares por acción, que se pagará el 13 de septiembre de 2024.
PetroTal perforó dos nuevos pozos de petróleo, logrando el Pozo 19H un promedio de 6,860 bopd en 30 días. Se firmó la adquisición del Bloque 131, mejorando sus capacidades de producción. La ruta OCP de la empresa hacia Ecuador recibió todas las aprobaciones regulatorias necesarias, con ventas reales esperadas para octubre de 2024.
El ingreso neto del segundo trimestre de 2024 fue de 35.4 millones de dólares (0.04 dólares por acción). Los gastos de capital fueron de 38.9 millones de dólares. La compañía recompró 1.2 millones de acciones ordinarias.
La guía reafirma una producción de 16,500-17,500 bopd para 2024, con un rango de EBITDA estimado de 200-240 millones de dólares. La compañía aseguró una línea de crédito de 20 millones de dólares con JP Morgan.
페트로탈은 2024년 2분기 재무 및 운영 결과를 발표하며 주요 성과를 강조했습니다.
평균 생산량과 판매량은 각 18,290 bopd 및 18,050 bopd였으며, 6,950만 달러의 EBITDA와 3,600만 달러의 자유 자금 흐름을 생성했습니다. 회사는 분기를 9,600만 달러의 총 현금으로 마감하였고, 2024년 9월 13일 지급 예정인 주당 0.015달러의 배당금을 선언했습니다.
페트로탈은 두 개의 새로운 유전으로 Well 19H를 드릴링했으며, 30일 평균 생산량이 6,860 bopd에 달했습니다. 블록 131의 인수가 서명되어 생산 능력을 강화했습니다. 회사의 에콰도르 OCP 경로는 모든 필요한 규제 승인을 받았으며 실제 판매는 2024년 10월로 예상됩니다.
2024년 2분기 순이익은 3,540만 달러(주당 0.04달러)였습니다. 자본 지출은 3,890만 달러였습니다. 회사는 120만 주의 보통주를 재매입했습니다.
가이드는 2024년 동안 16,500-17,500 bopd의 생산을 재확인하며 예상 EBITDA 범위를 2억-2억 4천만 달러로 설정했습니다. 회사는 JP 모건과 2천만 달러의 신용 한도를 확보했습니다.
PetroTal a annoncé ses résultats financiers et opérationnels pour le deuxième trimestre 2024, mettant en avant des réalisations significatives.
La production et les ventes moyennes étaient de 18 290 bopd et 18 050 bopd, respectivement, générant 69,5 millions de dollars en EBITDA et 36 millions de dollars de flux de fonds libre. L'entreprise a terminé le trimestre avec 96 millions de dollars en liquidités totales et a déclaré un dividende de 0,015 $ par action, payable le 13 septembre 2024.
PetroTal a foré deux nouveaux puits, le Puits 19H atteignant une moyenne de 6 860 bopd sur 30 jours. L'acquisition du Bloc 131 a été signée, renforçant ses capacités de production. L'itinéraire OCP de l'entreprise vers l'Équateur a reçu toutes les approbations réglementaires nécessaires, les ventes réelles étant attendues en octobre 2024.
Le revenu net du deuxième trimestre 2024 était de 35,4 millions de dollars (0,04 $ par action). Les dépenses d'investissement se sont élevées à 38,9 millions de dollars. L'entreprise a racheté 1,2 million d'actions ordinaires.
Les prévisions confirment une production de 16 500 à 17 500 bopd pour 2024, avec une estimation de l'EBITDA se situant entre 200 et 240 millions de dollars. L'entreprise a sécurisé une ligne de crédit de 20 millions de dollars auprès de JP Morgan.
PetroTal hat seine finanziellen und operativen Ergebnisse für das zweite Quartal 2024 bekannt gegeben und bedeutende Erfolge hervorgehoben.
Die durchschnittliche Produktion und die Verkäufe lagen bei 18.290 bopd und 18.050 bopd und generierten ein EBITDA von 69,5 Millionen Dollar sowie einen freien Mittelzufluss von 36 Millionen Dollar. Das Unternehmen schloss das Quartal mit 96 Millionen Dollar an liquiden Mitteln ab und erklärte eine Dividende von 0,015 Dollar pro Aktie, die am 13. September 2024 ausgezahlt wird.
PetroTal bohrte zwei neue Ölwells, wobei der Well 19H einen 30-Tage-Durchschnitt von 6.860 bopd erreichte. Der Erwerb des Blocks 131 wurde unterzeichnet, wodurch die Produktionsfähigkeiten verbessert wurden. Die OCP-Route des Unternehmens nach Ecuador erhielt alle erforderlichen behördlichen Genehmigungen, und tatsächliche Verkäufe werden im Oktober 2024 erwartet.
Das Nettoergebnis für das zweite Quartal 2024 betrug 35,4 Millionen Dollar (0,04 Dollar pro Aktie). Die Investitionsausgaben beliefen sich auf 38,9 Millionen Dollar. Das Unternehmen erwarb 1,2 Millionen Stammaktien zurück.
Die Prognosen bestätigen eine Produktion von 16.500-17.500 bopd für 2024, mit einer geschätzten EBITDA-Spanne von 200-240 Millionen Dollar. Das Unternehmen sicherte sich eine Kreditlinie in Höhe von 20 Millionen Dollar bei JP Morgan.
- Average production and sales of 18,290 bopd and 18,050 bopd.
- Generated $69.5 million in EBITDA and $36 million in free funds flow.
- Exited Q2 2024 with $96 million in total cash.
- Declared a $0.015/share dividend payable on Sept 13, 2024.
- Successfully drilled Well 19H averaging 6,860 bopd.
- Signed acquisition agreement for Block 131.
- Completed regulatory approvals for OCP route to Ecuador.
- Net income of $35.4 million ($0.04/share).
- Repurchased 1.2 million common shares.
- Secured a $20 million line of credit with JP Morgan.
- Capital expenditures increased to $38.9 million in Q2 2024.
- Higher lifting costs and diluent costs in Q2 2024.
- Decreased free funds flow per barrel from $24.9/bbl in Q4 2023 to $22.1/bbl.
Q2 2024 average sales and production of 18,050 bopd and 18,290 bopd, respectively
Generated Q2 2024 free funds flow of
Exited quarter with
Declaring dividend of
Board changes
Calgary, Alberta and Houston, Texas--(Newsfile Corp. - August 8, 2024) - PetroTal Corp. (TSX: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") is pleased to report its operating and financial results for the three and six months ended June 30, 2024.
Selected financial and operational information is outlined below and should be read in conjunction with the Company's unaudited consolidated financial statements and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2024, which are available on SEDAR+ at www.sedarplus.ca and on the Company's website at www.PetroTal‐Corp.com. All amounts herein are in United States dollars unless otherwise stated.
Selected Q2 2024 Highlights
Average Q2 2024 production and sales of 18,290 and 18,050 barrels ("bbls") of oil per day ("bopd"), respectively, which included a brief river blockade;
Generated Q2 2024 EBITDA(1) and free funds flow(1) of
$69.5 million ($42.31 /bbl) and$36.3 million ($22.11 /bbl), respectively;Exited Q2 2024 in a strong cash position with
$95.9 million in total cash ($84.1 million unrestricted), with over$93.2 million in current receivables due subsequent to June 30, 2024;In early May 2024, PetroTal signed an acquisition agreement to acquire a
100% working interest in Peru's Block 131, including the producing Los Angeles field for a purchase price of$5 million , subject to closing adjustments and with an effective date of January 1, 2024;Successfully drilled two new oil wells in the quarter. Well 19H has averaged over 6,860 bopd over its initial 30 days, placing it in the Company's top five initial rate wells and achieving payout in approximately 40 days;
Delivered strong operating cost metrics with lifting and variable transportation costs under
$8.00 /bbl in the quarter, slightly higher than Q1 2024, and generating a near78% net operating income margin in the quarter;Capital expenditures ("Capex") totaled
$38.9 million in Q2 2024 and were focused on drilling wells 18H and 19H;Completed all regulatory approvals for the Company's Oleoducto de Crudos Pesados Oil Pipeline ("OCP") route to market in Ecuador, onto which oil loading into barges was subsequently commenced in mid July 2024. Actual final sale of the pilot oil is expected in October 2024;
Delivered strong Q2 2024 net income of
$35.4 million ($0.04 /share); and,Paid total dividends of
$0.01 5/share and repurchased 1.2 million common shares in Q2 2024, representing approximately$15 million of total capital returned to shareholders (approximately3% of June 30, 2024, market capitalization).
(1) Non-GAAP (defined below) measure that does not have any standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures presented by other entities. See "Selected Financial Measures" section.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
"Our Q2 2024 operating and financial results were robust and Q3 and Q4 are now underpinned by strong drilling results this quarter. The 19H well was initially producing in excess of 8,000 bopd despite being designed with a shorter horizontal section compared to previous drills and has now averaged over 6,800 bopd over the last 30 days.
In addition, we are extremely excited about our formal route activation through the OCP. Having completed all the regulatory approvals, the Company is now in a position to further diversify its oil sales routes and to allow for offtake optionality during the dry season. Activating additional routes to market is a priority for the Company and we look forward to sending further updates in the fall of 2024.
We are expecting to close the Block 131 acquisition later this year becoming the Company's first diversified production stream with the expectation of significantly increasing its light oil production profile in 2025."
Selected Financial Highlights
Three Months Ended | Six Months Ended | |||||||
Q2-2024 | Q1-2024 | Q2-2024 | Q2-2023 | |||||
$/bbl | $/bbl | $/bbl | $/bbl | |||||
Average Production (bopd) | 18,290 | 18,518 | 18,404 | 15,631 | ||||
Average sales (bopd) | 18,050 | 18,347 | 18,198 | 15,567 | ||||
Total sales (bbls)(1) | 1,642,578 | 1,669,537 | 3,312,115 | 2,817,573 | ||||
Average Brent price | ||||||||
Contracted sales price, gross | ||||||||
Tariffs, fees and differentials | ( | ( | ( | ( | ||||
Realized sales price, net | ||||||||
Oil revenue(1) | ||||||||
Royalties(2) | ||||||||
Operating expense | ||||||||
Direct Transportation: | ||||||||
Diluent | ||||||||
Barging | ||||||||
Diesel | ( | ( | ||||||
Storage | ( | ( | ( | ( | ||||
Total Transportation | ||||||||
Net Operating Income(3,4) | ||||||||
G&A | ||||||||
EBITDA(3) | ||||||||
Adjusted EBITDA(3,5) | ||||||||
Net Income | ||||||||
Basic Shares Outstanding (000) | 914,196 | 914,104 | 914,196 | 922,306 | ||||
Market Capitalization(6) | ||||||||
Net Income/Share ($/share) | ||||||||
Capex | ||||||||
Free Funds Flow(3) (7) | ||||||||
% of Market Capitalization(6) | ||||||||
Total Cash(8) | ||||||||
Net Surplus (Debt) (3) (9) |
The table below summarizes PetroTal's comparative financial position.
- Approximately
89% of Q2 2024 sales were through the Brazilian route vs87% in Q1 2024. - Royalties at year to date June 30, 2024 and March 31, 2024 include the impact of the
2.5% community social trust. - Non-GAAP (defined below) measure that does not have any standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures presented by other entities. See "Selected Financial Measures" section.
- Net operating income represents revenues less royalties, operating expenses, and direct transportation.
- Adjusted EBITDA is net operating income less general and administrative ("G&A") and plus/minus realized derivative impacts.
- Market capitalization for Q2, 2024, Q1 2024 and Q2 2023, assume share prices of
$0.53 ,$0.56 , and$0.45 respectively on the last trading day of the quarter. - Free funds flow is defined as adjusted EBITDA less capital expenditures. See "Selected Financial Measures" section.
- Includes restricted cash balances.
- Net Surplus (Debt) = Total cash + all trade and net VAT receivables + short and long term net derivative balances – total current liabilities – long term debt – non current lease liabilities – net deferred tax – other long term obligations.
Q2 2024 Financial Variance Summary
Three months ended | Six months ended | ||||||||||||||||
US$/bbl Variance Summary | Q2 2024 | Q1 2024 | Variance | Q2 2024 | Q2 2023 | Variance | |||||||||||
Oil Sales (bopd) | 18,050 | 18,347 | (297) | 18,198 | 15,567 | 2,631 | |||||||||||
Contracted Brent Price | |||||||||||||||||
Realized Sales Price | |||||||||||||||||
Royalties | |||||||||||||||||
Total OPEX and Transportation | |||||||||||||||||
Net Operating Income(1,2) | |||||||||||||||||
G&A | |||||||||||||||||
EBITDA | ( | ||||||||||||||||
Net Income | ( | ||||||||||||||||
Free Funds Flow(1,3) | ( |
Q2 2024 Financial Variance Commentary
- Near-flat sales volume compared to prior quarter with six months ended sales volumes up
17% from Q2 2023; - Higher lifting costs in the quarter, driven by higher contracted service and erosion control opex allocations compared to previous quarter. Higher diluent costs in the quarter due to higher transportation costs of diluent;
- Capital spending increased by
28% to$38.9 million in the quarter from the prior quarter of$30.2 million due to increased drilling activity; - Strong Q2 2024 production and favorable oil pricing generated free funds flow per barrel in the quarter of approximately
$22.1 /bbl compared to$24.9 /bbl in Q4 2023; - Liquidity increased
13% in Q2 2024 compared to Q1 2024, with total cash increasing by approximately$11 million to$96 million despite transferring nearly$12 million of restricted cash to the social trust fund; and, - PetroTal maintained a strong balance sheet in Q2 2024 with no long term bank debt and a net surplus(1,4) of
$50 million , and inclusive of a$65 million net deferred tax liability.
- See "Selected Financial Measures".
- Net operating income represents revenues less royalties, operating expenses, and direct transportation.
- Free funds flow is defined as adjusted EBITDA less capital expenditures.
- Net Surplus (Debt) = Total cash + all trade and net VAT receivables + short and long term net derivative balances – total current liabilities – long term debt – non current lease liabilities – net deferred tax – other long term obligations.
Additional Financial and Operating Updates in, and subsequent to June 30, 2024
Operations Update
Corporate production averaged 20,034 bopd in July 2024, with contributions from the 19H and 18H wells, which averaged 5,167 and 2,278 bopd, respectively. Dry river season indicators are at the moment at lower levels than 2023. Notwithstanding, production and sales constraints from August through October 2024 are kept as originally budgeted thanks to the increased barge fleet size. Q3 2024 production guidance is reiterated at approximately 13,000 bopd.
With expected low river conditions in Q3 and early Q4, the Company is reaffirming production guidance of 16,500 to 17,500 bopd for 2024. Assuming a full year 2024 Brent price of
PetroTal completed drilling 5WD on July 22, 2024, the Company's fourth water disposal well with injectivity tests at approximately 50,000 barrels of water per day ("bwpd"). The 5WD well is already online at a total cost of
Drilling commenced on Well 20H on July 26, 2024 with an estimated cost of
In order to minimize rig standby fees and maximize production thanks to the increased water handling capacity heading into the next wet season, PetroTal is accelerating capex. Following the completion of the 20H well, PetroTal will drill and complete wells 21H, 22H and 23H at Bretana by the end of Q1 2025. As a result, total estimated 2024 capital spend is now expected to fall within a range of
ONP Update
On July 17, 2024 the Company was notified that approximately 322,000 barrels of Northern Peruvian Pipeline ("ONP") oil located in section II of the line was successfully pumped to the Bayovar port for tender and eventual sale. When the tender process is completed by Petroperu, it will trigger a true up payment to PetroTal if the realized price for those barrels is greater than the oil's cost base. The average cost base of the Company's 2.2 million barrels of oil in the ONP is approximately
Cepsa Acquisition Update
Since the signing of the acquisition agreement in early May 2024, PetroTal's integration team has been progressing on the necessary regulatory approvals required to close the acquisition. The first milestone was achieved in late June 2024 with an approval from Perupetro. Approval into supreme decree is still estimated in Q4 2024. The Block 131 assets have been producing between 800 and 1,000 bopd and generating positive EBITDA per month since the transaction effective date of January 1, 2024. It is the Company's intention to optimize production starting next year.
JP Morgan Line of Credit
In May 2024, PetroTal was able to secure a
Share Buyback Plan Update
PetroTal's updated liquidity strategy prioritises dividend sustainability, potential Block 131 development, and erosion control working capital requirements. In Q2 2024, the Company set additional constraints on the share buyback program that better align daily buyback execution with lower share prices. As a result, a decreased volume of buybacks was realized in Q2 2024 compared to previous quarters. The Company will continue to monitor buyback levels.
Q3 2024 dividend declaration
A cash dividend of USD
Record date: August 30, 2024
Payment date: September 13, 2024
The dividend is an eligible dividend for the purposes of the Income Tax Act (Canada) and investors should note that the excess liquidity sweep portion of all future dividends may be subject to fluctuations up or down in accordance with the Company's return of capital policy. Shareholders outside of Canada should contact their respective brokers or registrar agents for the appropriate tax election forms regarding this dividend.
Director Resignation
Effective August 8, 2024, Dr. Roger Tucker has resigned as a Company director so he can focus on leading the growth of Africa Oil. Dr. Tucker has been a board member since the end of 2019 when the Company started its successful horizontal well drilling campaign and has made many other significant technical contributions to our success at Bretana. PetroTal would like to thank Dr. Tucker for his contributions to the company and wishes him well in his future endeavors.
Q2 2024 Webcast Link for August 8, 2024
PetroTal will host a webcast for its Q2 2024 results on August 8, 2024 at 9am CT (Houston) and 3pm BST (London). Please see the link below to register.
https://stream.brrmedia.co.uk/broadcast/666ae961ee30aaf32018b5c3
ABOUT PETROTAL
PetroTal is a publicly traded, tri‐quoted (TSX: TAL) (AIM: PTAL) (OTCQX: PTALF) 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
For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedarplus.ca, or below:
Camilo McAllister
Executive Vice President and Chief Financial Officer
Cmcallister@PetroTal-Corp.com
T: (386) 383 1634
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) 20 7770 6424
Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / James Spinney / Robert Collins
T: 44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
T: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton / David McKeown / Georgia Langoulant
T: +44 (0) 20 7418 8900
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, oil production levels and guidance. All statements other than statements of historical fact may be forward-looking statements. 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. Without limitation, this press release contains forward-looking statements pertaining to: PetroTal's drilling, completions, workovers and other activities; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup; PetroTal's 2024 guidance; expectations regarding the strategic acquisition of CEPSA Peruana, S.A.C (the "Acquisition"), including in respect of its terms, timing, benefits and closing (including that it will close pending regulatory approvals); the Company's expectation to meet Q3 2024 production guidance in face of production and sales constraints in August and September of Q3; expectations of timing to realize revenues from the Company's OCP oil route to market; expectations regarding the tender process and sale of the ONP oil; expectations surrounding PetroTal's short term receivables and when they become due; Q3 2024 dividend declaration of
OIL REFERENCES: All references to "light oil" in this press release mean "light crude oil" as defined in NI 51-101. All references to "heavy oil" in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.
SHORT TERM RESULTS: References in this press release to peak rates, initial rates, production rates since inception, current production rates, and other 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 of PetroTal. The Company cautions that such results should be considered to be preliminary.
SPECIFIED FINANCIAL MEASURES: This press release includes various specified financial measures, including non-GAAP financial measures, non-GAAP financial ratios and capital management measures as further described herein. These measures do not have a standardized meaning prescribed by generally accepted accounting principles ("GAAP") and, therefore, may not be comparable with the calculation of similar measures 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. "Adjusted EBITDA" (non-GAAP financial measure) is calculated as consolidated net income (loss) before interest and financing expenses, income taxes, depletion, depreciation and amortization and adjusted for G&A impacts and certain non-cash, extraordinary and non-recurring items primarily relating to unrealized gains and losses on financial instruments and impairment losses, including derivative true-up settlements. PetroTal utilizes adjusted EBITDA as a measure of operational performance and cash flow generating capability. Adjusted EBITDA impacts the level and extent of funding for capital projects investments. Reference to EBITDA is calculated as net operating income less G&A. "Netback" (non-GAAP financial measure) equals total petroleum sales less quality discount, lifting costs, transportation costs and royalty payments calculated on a bbl basis. The Company considers netbacks to be a key measure as they demonstrate Company's profitability relative to current commodity prices. "Net Operating Income" (non-GAAP financial measure) is calculated as revenues less royalties, operating expenses, and direct transportation. The Company considers Net Operating Income measure as they demonstrate Company's profitability relative to current commodity prices. "Net surplus (debt)" (non-GAAP financial measure) is calculated by adding together total cash, trade and VAT receivables, and short and long-term net derivative balances less total current liabilities, long-term debt, non-current lease liabilities, deferred tax, and other long-term obligations. Net surplus (debt) is used by management to provide a more complete understanding of the Company's capital structure and provides a key measure to assess the Company's liquidity. "Free funds flow" (non-GAAP financial measure) is calculated as net operating income less G&A less exploration and development capital expenditures less realized derivative gains/losses and is calculated prior to all debt service, taxes, lease payments, hedge costs, factoring, and lease payments. Management uses free funds flow to determine the amount of funds available to the Company for future capital allocation decisions. Please refer to the MD&A for additional information relating to specified financial measures.
Eligible Dividend: An eligible dividend is one which is characterized as such by the dividend-paying corporation for Canadian residents. The primary benefit of an eligible dividend is that it benefits from an enhanced gross-up and credit regime at the shareholder level (i.e., the shareholder pays less tax on eligible dividends than non-eligible dividends). This is meant to compensate for the higher general corporate tax rate paid by non-CCPC's on their income and generally preserve integration of Canada's tax rates. As an example, for federal income tax purposes the gross-up rate for eligible dividends is
FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations and production results, free funds flow, cost estimates, tax rates, budget, EBITDA, netback, dividends, capex, 2024 average production and production and sales targets, shareholder returns and components thereof, including pro forma the completion of the Acquisition, 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 and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. 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 legislation, including Canadian National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. Changes in forecast commodity prices, differences in the timing of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in PetroTal's guidance. The Company's actual results may differ materially from these estimates.
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