PetroTal's Block 131 Acquisition: A Strategic Move for Growth
Monday, Dec 2, 2024 2:05 am ET
PetroTal Corp., a Calgary-based oil and gas company, has recently announced the closing of its strategic acquisition of Block 131 in Peru. This acquisition marks an important milestone for PetroTal, as it is the company's first acquisition since entering Peru in late 2017. The acquired assets include the producing Los Angeles field, which is currently producing approximately 900 barrels of oil per day from four wells. The field is located on Block 131, which is onshore Peru, and has produced a total of approximately 7.6 million barrels to date. The acquisition will add approximately 900 bopd to PetroTal's current 18,500 bopd of Bretana production, with the potential for further upside in the near to medium term.
The assets are held under a concession agreement expiring in 2037 and are subject to a 23.9% royalty rate. PetroTal's management and board believe this acquisition provides low-cost light oil reserve additions with upside potential, Iquitos Refinery capacity synergies, and netback enhancements. The acquisition is expected to contribute to PetroTal's ongoing growth vision and immediate plans for development.
PetroTal's acquisition of Block 131 expands its operational footprint and enhances its long-term growth prospects. With recoverable reserves estimated up to 4.9 million bbls, the block offers significant upside potential. The acquisition also enables synergies with the Iquitos refinery, allowing for increased sales capacity and improved netbacks through a lighter oil mix. Additionally, the strategic location of Block 131, connected to PetroTal's Block 107 prospect by a 130km highway, presents further growth opportunities.

PetroTal's management has identified three near-term low-risk operational initiatives at Block 131, including identifying bypassed oil for horizontal well locations, optimizing hydraulic pumps, and implementing solutions to lower chemical costs from treating asphaltene. These initiatives are expected to further boost production and improve operational efficiency.
The integration of Block 131's operations with PetroTal's existing Iquitos refinery capacity creates synergies by increasing the sales capacity of heavier Bretana crude, allowing more oil to be sold in dry river conditions. This lighter oil mix sold to Iquitos enables lower Brent differentials to be realized, enhancing netbacks. Additionally, the shared access to the Iquitos refinery further enhances PetroTal's ability to optimize production and sales capacity, ultimately driving future growth.
In conclusion, PetroTal's acquisition of Block 131 is a strategic move that will enhance its long-term growth and profitability. The acquisition offers low-cost light oil reserve additions, Iquitos Refinery capacity synergies, and netback enhancements. The strategic location of Block 131, connected to PetroTal's Block 107 prospect by a 130km highway, presents further growth opportunities. With a focus on operational efficiency and strategic acquisitions, PetroTal is well-positioned for future growth in the oil and gas sector.