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Petro Tal Corp (TSE:TAL)
:TAL
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PetroTal Corp
(TSX:TAL)
Rating:74Outperform
Price Target:
C$1.00
▲(35.14%Upside)
Positive Factors
Financial Performance
Costs and capital expenditures came in below forecasts for the first quarter, highlighting effective financial management.
Production Performance
PetroTal's record production of 23.3kb/d for 1Q, with sustained monthly record levels, showcases strong operational success at the Bretana field.
Reserves Growth
PetroTal's year-end reserves report shows a 14% increase in 2P reserves year-over-year, reflecting successful reserves additions at the Bretana field and Block 131.
Negative Factors
Development Costs
Future development costs have risen to $645 million, driven by expenditures for Block 131 and additional development wells at Bretana.
Project Delays
The erosion control project has been delayed by about one month, although cost estimates remain unchanged.
PetroTal Corp (TAL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$676.80M
Dividend Yield11.33%
Average Volume (3M)480.14K
Price to Earnings (P/E)5.1
Beta (1Y)1.13
Revenue Growth11.68%
EPS Growth-30.95%
CountryCA
Employees251
SectorEnergy
Sector Strength60
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.04
Shares Outstanding914,591,500
10 Day Avg. Volume397,211
30 Day Avg. Volume480,143
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.90
Price to Sales (P/S)0.00
P/FCF Ratio7.00
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit1.66
Enterprise Value/Ebitda0.45
Forecast
1Y Price Target
C$1.90Price Target Upside156.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
PetroTal Corp Business Overview & Revenue Model
Company DescriptionPetroTal Corp. engages in the appraisal, development, and exploration of oil and natural gas in Peru, South America. Its flagship asset is its 100% owned Bretana oil field located in the Maranon Basin of northern Peru. The company was formerly known as Sterling Resources Ltd. and changed its name to PetroTal Corp. in June 2018. PetroTal Corp. is headquartered in Houston, Texas.
How the Company Makes MoneyPetroTal Corp generates revenue through the extraction and sale of crude oil from its operations in the Bretana oil field. The company earns money by selling its produced oil on the open market, primarily through off-take agreements and spot sales to refineries and trading companies. PetroTal's revenue is influenced by global oil prices, production volumes, and operational efficiencies. Key factors contributing to its earnings include successful development and increased output from its oil reserves, strategic partnerships with local and international stakeholders, and effective cost management practices.
PetroTal Corp Earnings Call Summary
Earnings Call Date:May 12, 2025
(Q1-2025)
| % Change Since: 34.55%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments such as increased production and successful financial agreements, alongside challenges like declining oil prices and operational setbacks. The company demonstrated resilience and strategic planning to mitigate adverse conditions.Q1-2025 Updates
Positive Updates
Increased Production Volumes
Q1 production volumes were 26% higher than the same period last year and 22% higher than the prior quarter.
Strong Free Cash Flow
PetroTal generated over $48 million in free funds flow in the first quarter, marking the second highest quarterly free cash flow since inception.
New Term Loan Agreement
Secured a $65 million credit facility with two Peruvian banks to finance the erosion control project over the next 12 to 18 months.
Record Production Pace
Produced approximately 2.8 million barrels by April 30, 2025, which is 25% ahead of last year's pace, setting up for a full-year target of around 8 million barrels.
Negative Updates
Decline in Oil Prices
Brent oil prices have dropped to the low $60s per barrel, affecting EBITDA expectations, which were initially based on $75 per barrel.
Pump Failures
Experienced pump failures in four producing wells at Bretaña, although replacements are underway.
Flooding Delays
Flooding in Pucallpa delayed the erosion control project by a few weeks due to high river levels.
Higher Discount for Bretaña Oil
The discount for Bretaña oil was higher than usual at about $23 a barrel versus the historical $20 to $21.
Company Guidance
In the Q1 2025 results webcast, PetroTal provided detailed guidance on various financial and operational metrics. The company's production has averaged over 23,000 barrels per day so far in 2025, with an unchanged annual production target of 21,000 to 23,000 barrels per day. The company expects its EBITDA to fall below the initially guided $245 million due to declining Brent oil prices, currently in the low $60s per barrel range. Despite these challenges, PetroTal produced approximately 2.8 million barrels by April 30, 2025, a 25% increase from the previous year. The company secured a $65 million credit facility to finance its erosion control project, benefiting from advantageous loan terms, including a four-year repayment schedule and an 8.65% interest rate. PetroTal also reported a flat EBITDA of $72 million for Q1, despite lower oil prices, supported by increased production and reduced erosion control expenses. The company maintains flexibility in its drilling program, planning to drill two wells at the Los Angeles field later this year.PetroTal Corp Financial Statement Overview
Summary
PetroTal Corp exhibits strong financial performance with high profitability, a robust balance sheet, and solid cash flow generation. The company maintains a solid Gross Profit Margin of 70.25% and a commendable Net Profit Margin of 25.96%. The low Debt-to-Equity ratio and strong equity base further enhance its financial stability. However, slight declines in EBIT and EBITDA margins and moderate cash flow conversion suggest areas for potential improvement.Income Statement
PetroTal Corp showcases strong financial performance with a solid Gross Profit Margin of 70.25% and a Net Profit Margin of 25.96% for TTM (Trailing-Twelve-Months). The stability in revenue, with a slight growth from the previous year, indicates steady operations in a competitive industry. However, the EBIT and EBITDA margins, though healthy, have seen a slight decline over the periods, suggesting potential cost pressures or operational challenges.82
Very Positive
Balance Sheet
The company's balance sheet is robust, with a low Debt-to-Equity ratio of 0.13, reflecting a conservative financial structure. The Equity Ratio of 64.52% indicates a strong equity base, providing stability. Return on Equity of 17.93% is commendable, showcasing efficient use of equity. Overall, the balance sheet suggests strong financial health with minimal leverage risks.88
Very Positive
Cash Flow
PetroTal Corp demonstrates a solid cash flow position with consistent Free Cash Flow growth. The Operating Cash Flow to Net Income ratio is substantial, indicating strong cash generation capabilities. The Free Cash Flow to Net Income ratio is positive, albeit moderate, suggesting room for improvement in converting earnings into free cash flow.78
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 363.51M | 286.26M | 327.12M | 159.19M | 61.74M |
| Gross Profit | 256.40M | 208.11M | 273.54M | 104.96M | 31.56M |
| EBITDA | 218.42M | 201.20M | 260.87M | 103.25M | 13.02M |
| Net Income | 111.45M | 110.50M | 188.53M | 63.97M | -1.52M |
Balance Sheet | |||||
| Total Assets | 810.47M | 658.29M | 602.88M | 398.29M | 215.14M |
| Cash, Cash Equivalents and Short-Term Investments | 102.78M | 90.57M | 104.34M | 44.92M | 9.08M |
| Total Debt | 64.69M | 28.87M | 101.09M | 115.86M | 3.39M |
| Total Liabilities | 298.96M | 194.34M | 203.55M | 194.03M | 77.97M |
| Stockholders Equity | 511.51M | 461.57M | 399.33M | 204.26M | 137.16M |
Cash Flow | |||||
| Free Cash Flow | 66.23M | 131.01M | 77.82M | -4.74M | -28.96M |
| Operating Cash Flow | 230.76M | 239.46M | 172.02M | 77.46M | 13.34M |
| Investing Cash Flow | -166.31M | -105.75M | -94.73M | -76.19M | -44.14M |
| Financing Cash Flow | -61.22M | -142.38M | -31.77M | 64.12M | 19.32M |
PetroTal Corp Technical Analysis
Positive
0.74
Price Trends
0.67
Positive
0.63
Positive
0.62
Positive
Market Momentum
0.02
Negative
69.24
Neutral
94.44
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TAL, the sentiment is Positive. The current price of 0.74 is above the 20-day moving average (MA) of 0.70, above the 50-day MA of 0.67, and above the 200-day MA of 0.62, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 69.24 is Neutral, neither overbought nor oversold. The STOCH value of 94.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TAL.
PetroTal Corp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$676.80M | 5.12 | 18.60% | 11.33% | 11.68% | -30.95% | |
73 Outperform | C$644.45M | 5.73 | 43.82% | ― | 104.07% | ― | |
72 Outperform | $936.28M | 44.07 | 3.68% | ― | -27.80% | -96.88% | |
52 Neutral | C$2.99B | -1.51 | -3.48% | 6.43% | 2.60% | -49.87% | |
52 Neutral | $729.32M | 13.42 | 7.20% | 7.02% | -2.37% | -421.59% | |
50 Neutral | $586.92M | 5.64 | -14.03% | ― | 11.92% | -304.98% | |
43 Neutral | C$431.62M | ― | -6.69% | ― | 41.39% | -61.36% |
* Energy Sector Average
Performance Comparison
TSE:TAL
PetroTal Corp
0.74
0.12
19.35%
TSE:OBE
Obsidian Energy
8.48
-0.33
-3.75%
TSE:SGY
Surge Energy
7.36
1.52
26.05%
TSE:SDE
Spartan Delta
4.68
0.98
26.49%
TSE:SNM
ShaMaran Petroleum
0.22
0.15
214.29%
TSE:CEI
Coelacanth Energy, Inc.
0.81
0.08
10.96%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.