PetroTal Corp (SER1) Q3 2026 Earnings Report

The call was broadly constructive, with strong reserves, year-to-date production ahead of budget, adjusted EBITDA already within full-year guidance, substantial liquidity, debt repayment, and a restarted drilling program supporting a targeted return to production above 20,000 barrels per day. These positives were offset by sharp year-over-year and quarter-over-quarter production declines, lower quarterly profitability, derivative losses, and delays to the erosion-control project and related capital spending. Management nevertheless expressed confidence in reversing the production trend through new wells and infrastructure expansion.

PetroTal maintained full year adjusted EBITDA guidance of $110 million to $120 million and unchanged full year '26 CapEx guidance of $85 million, although $85 million will be a stretch and some capital expenditure will have to be transferred due to erosion control; the company expects to restore production to over 20,000 barrels a day by the end of the first quarter of 2027, with well 25-H guided to take 2 months, usually 6 wells per year in Bretaña, and 2 wells in Los Angeles in the next 2 years, while the erosion control project will cost approximately $65 million to $75 million, with about $42 million to go and that will be done during 2027. PetroTal has hedged from October '26 to December '27 approximately 1.7 million barrels, maintains a minimum liquidity policy of $60 million, expects water handling capacity to increase from 210,000 barrels of fluid to 340,000 or 350,000 by the end of '28, and may need to reach 500,000 barrels per day; it is looking at potentially April 2028 for returning to the ONP and expects to provide 2027 guidance in the very near future.