21st Jan 2020 11:40
(Alliance News) - PetroTal Corp has set aside nearly USD100 million for work in 2020, it said Tuesday, as it looks to significantly increase Peru production.
The USD99 million capital programme, PetroTal said, will allow it to become a "free cash flowing company". It hopes to achieve production of 20,000 barrels of oil per day from the Bretana oil field by the end of 2020.
Texas-based PetroTal is targeting average production over 2020 of 13,500 barrels per day, which would be triple the figure achieved in 2019. Fourth-quarter 2019 average output was 7,757 barrels a day.
It has four horizontal production wells planned as well as a second water disposal well. Each well will cost around USD13 million, with the water well costing USD9 million.
The company is also commissioning the second phase of the processing facilities for Bretana, which it wants complete by late August this year.
This second phase will have a nominal processing capacity of 15,000 barrels of oil per day, enabling total capacity to reach 24,000 barrels. PetroTal said this will save around USD5.5 million in costs.
Chief Executive Manolo Zuniga said: "We are pleased with the success the company has achieved to date developing the Bretana oil field and plan to build on that success in 2020. PetroTal's board has approved the 2020 capital budget which is similar in scope to last year. and we are confident in our ability to execute it.
"With each new well drilled, we better understand the underlying reservoir, thereby enhancing our confidence in continued, focused growth in our two Peruvian blocks. The current and expected oil production levels provide a solid base which optimizes our cost structure and generates significant funds from operations."
"Building on the 2018 goal of putting the original oil well online in just five months, 2019 became a successful catalyst year for determining the oil fields' capacity for strong organic growth. 2020 is the year we expect to grow into a company with long term production and cash flow stability," Zuniga added.
Shares were 2.5% lower on Tuesday morning in London at 27.80 pence each.
By George Collard; [email protected]
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