PetroTal Corp (SER1) Q2 2026 Earnings Report

The call presented several strong positives: robust cash and low debt, meaningful reserve value, improving realized prices and netbacks, QoQ growth in adjusted EBITDA and free cash flow, and a clearly articulated plan to restart an 8-well drilling campaign to return production toward a 20,000 bpd target. Offsetting these are significant near-term challenges: a substantial YoY production decline (−40%), higher per-barrel costs driven by lower volumes, a noncash impairment that depressed net income, and several execution/timing uncertainties (erosion control, El Niño risks, and undisclosed costs for larger water injection capacity). Overall, management conveyed confidence in growth prospects and financial resilience, but results remain contingent on successful and timely execution of the upcoming drilling and infrastructure programs.

The company reiterated 2026 guidance of ~12,000 bpd average production and an adjusted EBITDA range of $110–$120M (earlier slide assumptions of 12,000 bpd and $83.60/bbl Brent implied ~$180M net operating income and ~ $170M EBITDA), with capital expenditures guided at $80–$90M (Camilo also referenced ~$85M in the guidance summary); first‑half adjusted EBITDA was $78.7M and first‑half CapEx $15.6M. Management expects available cash to rise from about $105M today to ~ $120M by year‑end (total cash $137M; total debt $37.5M), generating roughly $8M of after‑tax free funds flow for the year and no dividends in the baseline plan. Operationally they plan an 8‑well program (Estrella rig) to spud in early October, assuming ~5,000 bpd per new well, ~45–50 days per well, targeting >20,000 bpd monthly average by mid‑2027 (possible daily 20k in Q1 2027); Q2 production was 12,557 bpd (down 16% q/q, 40% y/y), Q2 adjusted EBITDA $43.5M and Q2 free funds flow $32.4M. Remaining 2P reserves were cited at 110 million barrels (NPV10 $1.2B) after 32 million barrels produced to date.