WTI (Mar) $74.62 -82c, Brent (Mar) $78.29 -71c, Diff -$3.67 +11c
USNG (Feb) $3.95 -1c, UKNG (Feb) 124.4p +0.86p, TTF (Feb) €49.3 -€0.26

Oil price

In a week full of surprises it was interesting watching President Trump address the hordes at Dav-oh yesterday. Whilst nothing new was said it was obvious that the audience didn’t like it up them, not one little bit. 

On a serious note, my comments from yesterday remain valid, basically you can’t please all of the people all of the time. The ‘drill baby drill’ exhortations won’t work if the US  energy companies you are targeting are also being told that the price of oil has to come down. US independents have not got back to a position of strength by expanding, they can keep the bank happy, pay the dividends and employ their workers but by keeping a tight ship. Telling people to drill more and in a falling commodity price scenario doesn’t wash.

And history is littered with people who have tried to dictate to Opec how to run the world oil market, let alone with sanctions on Russia and Iran. 

PetroTal Corp

On Wednesday I was delighted to be able to interview PetroTal CEO Manuel Zúñiga, as one of the most experienced and knowledgeable in the industry it was a jot to chat for half an hour in which he covered everything I could have asked for. The link is below.

Yet again PetroTal has delivered the goods and then some. 2025 guidance is set at 21-23/- b/d which is up c.24% on what was a fantastic year by any standards. That gives revenue at $75 pb Brent crude of $438m and EBITDA of $240-250m which is up 6% but notably net of erosion funding costs of $30 taken as opex.

Capex will be down by some 14% to $140m but PTAL still has an incredible list of tasks, four development wells, down from seven, at Bretana and Los Angeles (using the new rig)  investment in the erosion control at Bretana and exploration in the Ucayali Basin. Also at Bretana CPF where the plan is to increase capacity to some 32/- b/d.

All this EBITDA and revenue means that the dividend is safe,  guidance here is for a ‘fully funded quarterly dividend of $0.015/share, consistent with 2024′ which cost $55m which right now sits the shares on a 13% yield. Depending on quarterly results, the oil price and the summer low levels of the river I would expect this number to rise and the ‘Company also intends to maintain its ongoing share buyback program’.

With the updated bucket list imminent it would be crazy not to include PetroTal, it is after all ‘one of very few companies in the oil and gas sector that can support a stable dividend while growing output by more than 20% year after year’. I would expect capital growth and with such income support these shares should be highly sought after, in M&A if not elsewhere. 

Core Finance CEO Interview: Manuel Pablo Zúñiga-Pflücker of PetrolTal

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog