Petrotal, annual EBITDA guidance raised... October Bretonia drilling restart as a turning point

Petrotal ($PTALF) announced its production, profitability, and liquidity metrics for the first quarter of 2026. The average daily production in the first quarter was 14,907 barrels, with sales of 14,350 barrels per day. The adjusted EBITDA was $35.1 million, approximately 50.97B KRW; free cash flow was $25.7 million, approximately 37.29B KRW.

As of March 31, total cash decreased from $128.1 million to $128.3 million. Among them, unrestricted cash was about $104.2 million. The company stated that to hedge against oil price fluctuations, it has maintained a “zero-cost collar” hedge based on Brent crude oil prices, with a lower limit of $60 per barrel and an upper limit of $80.50 per barrel, for an estimated production of about 900k barrels in 2026.

Annual Guidance Upgrade and Drilling Restart Plan

The most notable part of this release is the upward revision of the annual adjusted EBITDA guidance. Petrotal raised its 2026 adjusted EBITDA forecast to between $110 million and $120 million. This is equivalent to approximately 900k to 159.59B KRW.

The company is in the final stages of a third-party drilling contract, planning to bring drilling equipment on-site in the second half of 2026, and to resume development drilling at the Bretana oil field starting in October. On the other hand, the existing erosion control contract has been terminated, and a new bidding process is underway. In scenarios requiring both increased production and stabilized facilities, the timing of the drilling restart and project execution methods are likely to be key variables affecting performance in the second half.

2025 Performance and Ready Production Growth Potential

Petrotal previously achieved an average daily production of 19,473 barrels and sales of 19,212 barrels in 2025, representing about a 9% increase over 2024. In the same year, adjusted EBITDA was $166.3 million, with free cash flow of $90.4 million. Total cash at the end of 2025 was $139.1 million.

Additionally, the company approved drilling tenders for the Bretana restart and obtained environmental impact approvals (MEIA), establishing a basis for potential daily production of up to 50k barrels. As of year-end, reserves were 64.4 million barrels (1P) and 110.2 million barrels (2P), with little change from the previous year. However, external evaluator NSAI noted that due to lowered oil price assumptions and increased development costs, PV10AT value has declined.

Dividend Suspension and Conservative Operating Tone

Entering 2026, the company prioritized “liquidity defense.” The board approved a capital expenditure budget of $80 million to $90 million for 2026 and set a standard to maintain at least $60 million in unrestricted cash. Therefore, regular dividends have been suspended.

This is in the context of production disruptions and weak oil prices. The Bretana oil field experienced partial shutdowns due to well leaks in the second half of 2025, resulting in production below capacity. The company repaired the wells by replacing tubing and deploying service teams, believing that the annual impact of production interruptions is limited. However, due to delays in development progress, the operational strategy for 2026 has become more conservative.

Market Interpretation

Petrotal’s first-quarter update can be summarized as “preparing to restart growth amid cash defense.” In the short term, sufficient cash and hedging strategies will support stability; in the medium to long term, the planned restart of development drilling in October is expected to be a turning point for production recovery. However, the pace of actual performance improvement will depend on the execution of re-tendering erosion control projects, drilling schedules, and oil price trends, which are intertwined.

TP AI Notes This article uses a language model based on TokenPost.ai for summarization. The main content of the text may be omitted or may differ from actual facts.