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PetroTal Corp (TSE:TAL)
TSX:TAL
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PetroTal Corp
(TSX:TAL)
81Outperform
Positive Factors
Financial Performance
PetroTal has delivered robust 3Q24 results, helped by strong production up c.40% 3Q/3Q, with EBITDAX of $47M ahead of the $42M generated in 3Q23 despite oil prices $8/bbl lower.
Reserves and Development
Petrotal published its year-end reserves with 2P reserves up ~14% year-over-year, highlighting another year of reserves additions for the Bretana field and the inclusion of reserves from the acquired Block 131.
Negative Factors
Development Costs
Future development costs have risen to $645 million, primarily due to the inclusion of development expenditures for Block 131 and additional development wells at Bretana.
PetroTal Corp (TAL) vs. S&P 500 (SPY)
Market Cap
C$595.95M
Dividend Yield13.22%
Average Volume (3M)584.97K
Price to Earnings (P/E)3.8
Beta (1Y)0.97
Revenue Growth23.43%
EPS Growth-13.91%
CountryCA
Employees161
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)0.17
Shares Outstanding916,850,600
10 Day Avg. Volume852,970
30 Day Avg. Volume584,969
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.22
Price to Cash Flow (P/CF)1.10
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$1.93Price Target Upside206.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
PetroTal Corp Business Overview & Revenue Model
Company DescriptionPetroTal Corp (TAL) is an oil and gas exploration and production company focused on developing and operating assets in Latin America, specifically within the Peruvian Amazon. The company specializes in the acquisition, exploration, and development of crude oil and natural gas properties, leveraging advanced technologies and sustainable practices to optimize resource extraction and maximize output.
How the Company Makes MoneyPetroTal Corp generates revenue primarily through the exploration, extraction, and sale of crude oil and natural gas. The company operates within Peru, focusing on high-potential oil fields, where it develops and produces hydrocarbons for the global market. PetroTal's revenue streams are heavily influenced by global oil prices, production volumes, and operational efficiencies. Strategic partnerships with local governments and industry stakeholders, coupled with investments in infrastructure and technology, enhance their ability to deliver oil to refineries and end markets, thereby driving revenue. Additionally, PetroTal may engage in hedging activities to manage price volatility and ensure more predictable cash flows.
PetroTal Corp Financial Statement Overview
Summary
PetroTal Corp demonstrates strong financial health with impressive profitability and operational efficiency. The income statement reflects solid revenue growth and profitability margins, while the balance sheet shows low leverage and strong equity support. Cash flows, although showing some volatility in growth, remain strong in terms of cash generation. Monitoring of trends in equity performance and free cash flow volatility is advised.Income Statement
PetroTal Corp shows strong income statement metrics with a significant gross profit margin of 73.72% and a robust net profit margin of 33.15% for the TTM period. Revenue growth is evident with a 17.76% increase compared to the previous year, indicating a positive trend. The EBIT margin of 45.63% and EBITDA margin of 70.51% further highlight operational efficiency. However, the slight decline in EBIT margin from the previous year may warrant attention.85
Very Positive
Balance Sheet
The balance sheet reflects stability with a low debt-to-equity ratio of 0.05, indicating low leverage. The return on equity (ROE) is healthy at 22.18%, showcasing effective utilization of equity. An equity ratio of 67.53% suggests a strong capital structure with substantial equity backing. Yet, the reduction in ROE compared to the previous year suggests a need to monitor equity performance.78
Positive
Cash Flow
Cash flow metrics are robust, featuring a free cash flow growth rate of -29.27% which suggests potential volatility, yet it still maintains a positive cash flow. The operating cash flow to net income ratio is strong at 2.13, indicating excellent cash generation relative to income. The free cash flow to net income ratio of 0.83 highlights efficient cash management. However, the decline in free cash flow growth rate implies potential risk areas.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 337.03M | 286.26M | 352.83M | 159.19M | 61.74M | 77.02M | Gross Profit |
| 248.49M | 208.11M | 272.93M | 104.87M | 31.56M | 47.51M | EBIT |
| 153.80M | 210.81M | 220.32M | 69.25M | 4.78M | 21.48M | EBITDA |
| 237.67M | 201.20M | 251.40M | 103.25M | 14.27M | 30.46M | Net Income Common Stockholders |
| 111.73M | 110.50M | 188.53M | 63.97M | -1.52M | 20.15M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.26M | 90.57M | 104.34M | 44.92M | 9.08M | 21.10M | Total Assets |
| 96.10M | 658.29M | 602.88M | 398.29M | 215.14M | 194.18M | Total Debt |
| 0.00 | 28.87M | 101.09M | 115.86M | 3.39M | 716.00K | Net Debt |
| -26.26M | -61.70M | -3.25M | 70.94M | -5.69M | -20.39M | Total Liabilities |
| 18.57M | 194.34M | 203.55M | 194.03M | 77.97M | 73.12M | Stockholders Equity |
| 77.53M | 461.57M | 399.33M | 204.26M | 137.16M | 121.06M |
| Cash Flow | Free Cash Flow | ||||
| 92.66M | 131.01M | 77.82M | -4.74M | -28.95M | -37.70M | Operating Cash Flow |
| 237.61M | 239.46M | 172.02M | 77.46M | 13.35M | 51.06M | Investing Cash Flow |
| -138.96M | -107.69M | -94.73M | -76.19M | -44.14M | -80.00M | Financing Cash Flow |
| -78.55M | -142.38M | -31.77M | 64.12M | 19.32M | 23.79M |
PetroTal Corp Technical Analysis
Neutral
0.63
Price Trends
0.66
Negative
0.63
Positive
0.64
Positive
Market Momentum
>-0.01
Positive
46.01
Neutral
11.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TAL, the sentiment is Neutral. The current price of 0.63 is below the 20-day moving average (MA) of 0.68, below the 50-day MA of 0.66, and below the 200-day MA of 0.64, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 46.01 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:TAL.
PetroTal Corp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$595.95M | 3.80 | 23.24% | 13.22% | 23.43% | -13.91% | |
72 Outperform | $5.87B | 12.00 | 11.22% | 0.93% | -8.92% | -5.46% | |
68 Neutral | $2.27B | 9.64 | 5.99% | 3.39% | 22.71% | ― | |
68 Neutral | $127.27M | 4.31 | 6.70% | 7.16% | 14.77% | -96.89% | |
62 Neutral | $1.73B | ― | -1.59% | 4.81% | -1.72% | 79.87% | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% | |
52 Neutral | $162.94M | 22.62 | 0.79% | ― | -2.37% | ― |
* Energy Sector Average
Performance Comparison
TSE:TAL
PetroTal Corp
0.65
-0.04
-5.80%
GTE
Gran Tierra Energy
4.49
-1.27
-22.05%
TSE:BTE
Baytex Energy
2.93
-1.29
-30.50%
TSE:MEG
MEG Energy
22.87
-5.92
-20.56%
TSE:CNE
Canacol Energy
3.64
-1.88
-34.06%
TSE:VET
Vermilion Energy
11.17
-3.45
-23.62%
PetroTal Corp Earnings Call Summary
Earnings Call Date: Nov 14, 2024 | % Change Since: 3.28% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strong production growth and consistent dividend payments, but these were offset by challenges such as declining oil prices and reduced net income due to noncash charges. The company's liquidity remains strong, though future spending is expected to reduce the cash balance.Highlights
Production Increase
PetroTal's production averaged over 15,200 barrels of oil per day in Q3 2024, marking a 39% increase compared to the same period last year.
Dividend Consistency
PetroTal declared a regular quarterly dividend of $0.015 per share, marking the seventh consecutive quarter of dividend payments.
Strong Cumulative Production
Cumulative production at the Bretaña field is 23% ahead of the same period last year.
Financial Liquidity
PetroTal's cash balance increased to $133 million at the end of Q3 2024, with access to more than $77 million in short-term credit facilities.
Lowlights
Decline in Oil Prices
The Brent benchmark averaged $77 and $74 per barrel in Q3 2024, resulting in a decrease of $6 to $7 in oil prices compared to prior periods.
Reduced Net Income
Net income amounted to $7.2 million in Q3 2024, a decrease of $28 million compared to the prior quarter, primarily due to a $17.5 million noncash charge from an unrealized commodity derivative loss.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Drop
EBITDA for Q3 2024 was $47.5 million, down 32% from Q2 2024.
Expected Cash Balance Decline
The cash balance is expected to decline over the next few quarters due to payables, erosion control project spending, and tax liabilities.
Company Guidance
During the PetroTal Q3 2024 earnings call, several key metrics and strategic updates were discussed. The company's production averaged over 15,200 barrels of oil per day, which was a decrease of 3,000 barrels from the prior quarter but an increase of over 4,000 barrels compared to the same period last year, surpassing the guidance of 13,000 barrels per day. Year-to-date production was 17,200 barrels per day, exceeding the mid-range of annual guidance. PetroTal returned more than $53 million to shareholders through dividends and buybacks, maintaining a quarterly dividend of $0.015 per share for the seventh consecutive quarter. Financially, the company reported an EBITDA of $47.5 million for Q3, a 32% decrease from Q2 but a 20% increase year-over-year, with a year-to-date total EBITDA of over $188 million. The Brent benchmark oil price averaged $77 and $74 per barrel in Q3, affecting net operating income. The company also highlighted ongoing efforts to improve transportation and marketing strategies, with 89% of crude sold via the Brazil export route and plans to explore new routes in 2025. PetroTal's cash balance increased to $133 million, despite a reduction in net surplus due to derivative liability changes and accrued tax liabilities. The acquisition of a new drilling rig was financed through a 36-month lease agreement, expected to yield cost savings and greater operational flexibility.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.