PetroTal Corp

PetroTal has announced a fully funded 2020 Capital Budget of $99m today with a tripling of average oil production to 13,500 bopd targeting to exit the year at 20,000bopd. This move will make the company free cash flowing later in the year and with the ability to develop all areas of the portfolio from the prolific Bretana field.

Drilling wise PTAL will complete four horizontal oil production wells at a cost of $13m each and a second water disposal well this year at a cost of $9m. This programme should, whilst assuming fast tracking of CPF-2 to commence commissioning by late August, see 2020 average production to range between 12,500 bopd and 14,500 bopd with an average target of 13,500 bond an increase on 2019 of 227%. The exit rate at the end of 2020 is expected to be 20,000 bopd a ‘significant increase on the 2019 rate of 13,300 bopd’.

There will be other capital investments this year including the environmental drilling permit for Constitucion prospect in Block 107 an environmental seismic permit over the Envidia prospect and a couple of other leads in block 95.

I will write more when not on the move but suffice it to say that PetroTal, since bursting on the scene last summer has been a fantastic addition to the sector. First rate management whom I have met, combined with a first class asset that continues to deliver time after time gives substantial potential upside. Indeed, whilst for PetroTal 2020 is a transformational year there is plenty of upside not only in its own portfolio but as Manolo says ‘within its scope in the region’, which I am sure is substantial. Definitely stays in the Bucket list and I’m more than happy with my 80p target price.

Gulf Keystone Petroleum

Todays update from GKP shows average gross production for 2019 of 32,883 bopd, after all that meeting the original guidance. Current production rates from Shaikan sits comfortably at 40,000 bopd  with guidance for 2020 of 43,000-48,000 bopd .

Cash balance at 20 Jan was $192m having paid $50m of dividends 8n 2019 and to date repurchasing $35m out if $50 with another $10m announced today.

With the long term target to reach the 55,000 bopd gross production target at Shaikan in Q3 2020 looking ambitious, nevertheless the fully funded work programme is apparently on target with its 30% y/y average production increase is on schedule.