Petrotal Corpo. Share Price (PTAL)

https://www.bnamericas.com/en/news/peru-pressing-hydrocarbons-restart-as-royalties-slide

Strange goings-on at PetroTal (PTAL). It closed at 7p in London on Thursday the previous week, then was walked up to the equivalent of 9.6p in the North American markets on Friday when London was closed. PTAL had some heavy social media promotion last weekend, the angle being buys at the “bargain” price in London first thing Monday morning. https://www.share-talk.com/oil-man-jim-company-oil-gas-podcast-blog17th-may-2020/

Regarding projected future oil prices for this year and next, Barclays recently raised its forecasts for Brent and WTI by $5-$6 a barrel for 2020 and by $16 a barrel for 2021. It now sees Brent prices averaging $37 a barrel and WTI at $33 this year. For 2021, the bank expects Brent to average $53 a barrel while WTI averages $50.

Source:

https://www.reuters.com/article/us-global-oil/oil-prices-jump-as-demand-shows-signs-of-picking-up-idUSKBN22R06K

Good afternoon sirs. I don´t think that the issue of making an adjustment to the selling oil price 12 months after delivery will have a substantial impact on PTAL´s results.

This is my calculation of what could be the final outcome of that adjustment, for oil to be produced up to the end of the present year.

Oil sold up to March 31, 2020:
PTAL sold 1,8 mio bls, that at March 31, 2020, have an oil pricing adjustment contingent liability of US$ 42 mio, with Brent at US$ 28/b.
PTAL will sell this barrels beginning end of Q3, as per the news release.
Assuming an average Brent of US$ 35 at the time of selling, this will reduce the contingent liability by US$ 12,6 mio

Oil to be produced from April 1, 2020.
Assuming the pipeline reopens by June 1, and PTAL produces an average of 13.000 bopd in June-Dec, PTAL will have the following amount of oil produced in 2020, to be sold at its final destination (port of Bayobar) in 2021:
April production: 10.000 bopd
June-Dec production: 13.000 bopd
Total April-Dec production to be finally sold in 2021: 3.030.000 barrels
Assuming an annual increase in Brent of US$ 10/b (on average) in 2021, this will have a positive oil pricing adjustment of US$ 30 mio

In summary, we will have:

Contingent liability at March 31, 2020 (1,8 mio barrels, Brent= 28): - US$ 42 mio
Adjustment in final selling price for oil produced up to March 31, 2020: + US$ mio 12
Oil pricing future adjustment for oil produced in April-Dec/2020 (to be sold in 2021): + US$ 30 mio

= Net result from oil pricing adjusment, for oil produced up to Dec 31, 2020: 0

Comments?

Regards

Fernan

It closed at 7p in London on Thursday, then was walked up to the equivalent of 9.6p in the North American markets on Friday when London was closed. PTAL was another with heavy social media promotion, https://www.share-talk.com/oil-man-jim-company-oil-gas-podcast-blog-13th-may-2020/