Mexico City — Canada’s PetroTal is focused on increasing recovery factors at its Bretana onshore field in the Amazon jungle in order to maximize value over the life of the project, the company’s CEO said April 7.

Register Now PetroTal is currently considering a factor of 15% at Bretana, but the expectation was only 11.5% in 2020, president and CEO Manuel Zuniga told the Enercom Dallas conference.

“For the company, it’s all about increasing recovery factors to increase value; that’s what PetroTal is all about,” he said.

PetroTal believes there are 364 million barrels of original oil in place and 51 million barrels in reserves at Bretana, although expert valuation company Netherland Sewell believes there is much more than that, Zuniga said.

On March 29, PetroTal drilled its first well in over a year due to delays caused by the coronavirus pandemic, he said. For 2021, the company will drill three more wells for a total of 11. Production will peak near 25,000 b/d in 2024 and begin decline, but PetroTal is confident production will “plateau” above 10,000 b/d for over 12 years, he said.

The team will do its best to improve recovery factors, considering companies only see positive cashflow once capital expenditures are completed, Zuniga said.

Production increase will be key for PetroTal in 2021 and 2022, as the company will try to take advantage of the current high prices of oil to reduce its debt, he added.

PetroTal recently refinanced a $100 million, three-year bond that pays a semi-annual 12% coupon, according to a company presentation.

For 2021, the company had estimated a $90 million EBITDA, based on a $50/b crude price. But at current prices, PetroTal will likely obtain over $140 million, Zuniga said.

With oil at $60/b, in two years the company could not only pay the bonds but also invest in 2P capex, he said.

“Next year, we will finish our 2P capex, and in 2023 we will finish our 3P capex; then, it will be free cash flow for years to come,” Zuniga said.

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