Member Info for Somekindofnut

Warrants were issued in response to field closure during covid, some were converted to shares in 2022, most in 2023.

Sturm- and indeed buy backs mean less shares to pay dividend on.

But odds of Shell increasing production by a third look small. Small companies can do it though.

So Petrotal could get 5.5k from Block 131. I think I read it'll cost 3 x$12m for 3 wells. So maybe $80m to get that 5.5k?? It's going to need cash anyway.

However older Bretana wells have already returned 5 or 6 times over and will keep producing for decades. I expect the same from 131 especially as it's lighter oil. So drilling beats buy backs imo.

Sturm- I wasn't talking about what I wanted, I was talking about growth which is what you wanted because you were complaining about tax on dividends?

Dividends are cash going out the door- so they don't grow the company do they. But I'm happy receiving dividends!

What I'm saying is that Petrotal now has increasing options to grow production and that should be how they grow the share price, not buy backs. I'm hoping for 3 wells on block 131 ASAP.

Petrotal have used Black Scholes to calculate how many shares the PSUs equate. It has to be a variable though as it wouldn't be performance related pay if the amount due didn't vary according to performance.

If production doesn't go up (or whatever) they don't get the shares. This is the only way i know of bonus' working. I've never heard of companies saying that if you put in the extra work, you then you don't get extra reward, you just qualify to buy shares.

Anyway, take that $5m. In practice it'll be less, but in theory they are spending it on block 131. That could have been spent on increasing dividend to 2cents or on buy backs. I'm saying the best use of cash is production growth which will hopefully lead to both share price growth and dividend growth.

Anyway, you don't have to agree. ;-)

I checked back - outstanding PSUs are 2% of shares.

All warrants were exercised in 2023. Gone. Obviously they were issued in response to field closure during covid, but no more warrants now. I'm looking at page 27:

https://petrotalcorp.com/wp-content/uploads/2024/03/Q4-Reporting-Package.pdf

So I agree buy backs won't move the share price, but IMO growth companies shouldn't be buying back shares. Growth companies should be prioritizing cash. So paying employees in shares is a good thing if they are instead pumping that cash into growing the business.

I'm sure I'm not only one here who's received bonus shares and cheap shares (Sharesave) from a UK company. It's a benefit for employees (tax break because government thinks it's good idea) and encourages loyalty (you lose out if you don't stay 3 years). Peru will be different, but Petrotal's PSU scheme much more linked to key shareholders interests I think - share price, production growth, safety. I'm pleased Petrotal has performance related pay because it drives the right behaviour.

So I think its normal for number of shares to increase in public companies. The key thing is to grow your company faster than you issue shares!

I'd say Petrotal's problem has been limited options to grow. Progress on other parts of block 95 and on block 107 has been slow, though should come together in next 2 years, but block 131 sounds drill ready. Three drill targets identified I believe!

I noticed in webcast both Manolo and FD were both asked for more details on 131 and both declined saying they don't want to say too much until deal completes.

Really hoping for more deals though and for that I think they should use mostly cash. Having cash on balance sheet boosts the share price. It adds to NAV per share, just like buy backs, but it also reduces perceived risk. But production growth is the key objective IMO.

BTW I find Manolo's accent difficult, transcript useful to me but can't always find it:

https://seekingalpha.com/article/4692480-petrotal-corp-ptalf-q1-2024-earnings-call-transcript

Sturm- I wouldn't say anything if reverse splitting didn't keep coming up like every 3 days.

I wouldn't attempt to compare the companies. But I think you can just look at GTE chart and objectively say in the months following reverse share split it didn't perform well.

As I say, 11 months after split on April 5th 2024, the share price ( 500p) was still lower than share split day (525p on May 2023). I picked LSE chart because you can choose 2 years.

And as you point out, it performed poorly from when it was announced and that's probably better test.

But more fundamentally, markets generally don't like reverse splits and if management say No then I'd say you have to let it go.

Actually it opened at $9.29 in New York so stand corrected on current price. One trade in London Bid in 640p, Ask 674p but trade price 740p. I think problem is it's just so illiquid. Recent share price has been good though.

Anyway, apologies for all the GTE.

I read that they eyeing 20k increase in production in 2026(?) , so guess that's why there's increased debt.

Bob- there's a 2 dollar spread on the NYSE listing because its currently closed so your calculation doesn't work.

S$8.12 bid, $10.31 ask, so invalid to compare that mid price to historic bid prices and say share has gone up.

I'm comparing like with like:

https://www.lse.co.uk/ShareChart.html?sharechart=GTE&share=Gran-Tierra

11 months after split on April 5th 2024 share price was 500p- lower than share split day (525p).

I know recent share price performance has been better in last 6 weeks, but so long after the split, I'd say its more likely that improved performance of business is the cause.

This is what investopedia says about reverse splits:

"Generally, a reverse stock split is not perceived positively by market participants. It indicates that the stock price has gone to the bottom and that the company management is attempting to inflate the prices artificially without any real business proposition. Additionally, the liquidity of the stock also may take a toll with the number of shares getting reduced in the open market."

https://www.investopedia.com/terms/r/reversesplit.asp

But GTE did their Big Banana reverse split on 5th May 2023.

Shareholders got one new share for 10 old so you expect the share price to leap to compensate.

https://www.lse.co.uk/ShareChart.html?sharechart=GTE&share=Gran-Tierra

So the day before the share price was 62.5p and on May 5th share price did indeed rise to 525p but sank over the next two months (July 4th share price 415p). It was only really almost a year later where share price started to rise into new territory so dont see how it did benefit their shareholders???

Shorts could reduce further. But I don't think numbers are material and I think if you press this idea of shorts being a significant issue here you will only worry investors for no good reason.

...to hedge against something etc. Who knows. Don't think it tells you anything useful.

Sorry split post, premature posted when typing.

Some traders will close their short, but others will open new short. Maybe they think the chart is bearish, maybe they think oil price will fall, maybe they want

Rylidan, that's the total short not an individual position that's short. And its less than 1% of shares. Traders trade, there's always likely to be traders willing to bet on any share price going down.

Interesting- some heavy buying reported after the close- 2.8 million.

Poo held Petrotal back today I think. Petrotal benefits from oil price strengthening more than most I think. Buying stronger after the EIA data.

Anyway the story on the chart is rising bottoms IMO. I think it looks ready to establish new range above 50p very soon.

I see today's deal is another where a large company finds oil production non-strategic and offloads assets at a bargain price. Cepsa is very proud to brag on their website that most of it's investments are in renewables. Lots of other examples - Serica buying BKR from BP, Seplat buying Exxon's offshore assets in Nigeria etc. I'm sure you all know others. Cepsa are investing $8bn in renewables, so don't think they care about $5m sale much, it's another strategic offload imo. I'm sure Manolo has seen that he can invest where Cepsa haven't, but was also interested that Petrotal say "Block 131’s light oil production will allow PetroTal to increase the sales capacity of heavier Bretana crude through Iquitos". Iquitos is of course closer to Bretana than Manaus, a handy thing in the dry season.

Just looking now at recent RNS, buy back volume has really dropped.

I dont think they can be much more aggressive unless they do an off market offer for shares because they'll be constrained by rules around trading volume etc.

Under the TSX rules, the total number of common shares PetroTal is permitted to purchase on the TSX is subject to a daily purchase limit of 190,542 common shares (representing 25% of the average daily trading volume of 762,168 common shares on the TSX, calculated from the initial date of listing on the TSX, being February 16, 2023 to the calender month ended April 30, 2023); provided that PetroTal may make one block purchase per calendar week that exceeds such limits.

Buy back program finishes May 17th.

https://www.lse.co.uk/rns/PTAL/commencement-of-share-buyback-dividend-timetable-yy52tqkgfblcvwy.html

So PTAL should have announcement about what happens next at next update.

Yes its just to annoy Bob.