The curtailment of PetroTal Corp.'s (TAL:TSX.V; PTALF:OTCQX; PTAL:AIM) operations in Peru ended when the Indigenous Association for Development and Conservation of Bajo Puinahua (AIDECOBAP) removed its illegal river blockade and released the two oil transport convoys it was holding, reported Auctus Advisors Stephane Foucaud in a June 21 research note.
Auctus maintained its target price of £1.50 per share on PetroTal, the current share price of which is about £0.42, Foucaud indicated. The gap between these prices implies a potential return that is significant, of 284%.
"The story continues to be about significant free cash flow generation, production and reserves growth with generous shareholders returns through a share buyback program of about US$3 million per quarter and a US$0.015 per share quarterly dividend," Foucaud wrote.
Alliance act pursued
AIDECOBAP agreed to remove the blockade after an alliance act was signed by it and the regional governor of Loreto, Perupetro, Puinahua's district municipality. This act calls for the Loreto government to replace PetroTal on the executive committee of the 2.5% Fund, thereby giving most of the votes concerning the allocation of funds to the parties who signed the act.
Those parties do not include PetroTal and the Junta Autonoma del Puinahua, representing the lion's share of the population, as both refused to sign. PetroTal does not consider the act a binding document.
Oil being moved for sale
Of the two oil transport convoys seized and held, one was Peruvian, the other Brazilian. Neither is owned by PetroTal, Foucaud reported.
The Brazilian convoy was carrying about 70,000 barrels (70 Mbbl) of oil to the Peru's Bretana field.
"We understand that 70 Mbbl [of oil] have now been loaded to be sold through Brazil," Foucaud wrote.
The Peruvian convoy, Foucaud noted, was taking about 40 Mbbl of oil to the Iquitos refinery to be sold there.
More production added
As for other news out of Peru, PetroTal's 15H well started production. Over the last seven days it produced an average rate of 8,700 barrels per day (8.7 Mbbl/d) of oil.
"This is another very good well," Foucaud wrote.
Petrotal's overall production for Q2/23 is expected to exceed guidance of 17 Mbbl/d by about 5%.
