PetroTal acquires CEPSA Peruana for enhanced oil production
PetroTal Corp. (TSX: TAL) (AIM: PTAL) (OTCQX: PTALF), in a strategic move to expand its oil production capabilities, has successfully executed a definitive agreement to acquire a 100% working interest in Peru’s Block 131 for approximately $5.0 million in cash. This acquisition includes the producing Los Angeles field through the purchase of CEPSA Peruana, S.A.C., the entire Peruvian business unit of Compania Española de Petroleos S.A.U. (CEPSA).
Immediate Production Increase and Development Plans
The acquisition significantly enhances PetroTal’s production portfolio, adding approximately 900 barrels of oil per day (bopd) to its existing 18,500 bopd from the Bretana field. Manuel Pablo Zuniga-Pflucker, President and CEO of PetroTal, emphasized the synergy and accretive nature of the acquisition, noting, “This transaction marks an important step forward in delivering on our ongoing growth vision.” He also highlighted plans for immediate development and the strategic importance of Block 131’s location, which connects via a 130km highway to the company’s Block 107 prospect.
Strategic and Operational Benefits
The assets acquired are currently producing oil from four wells drilled into the Cretaceous aged Cushabatay sand at the Los Angeles field. These wells benefit from strong aquifer support, resulting in a low base decline profile and high recovery factor. The light oil from Block 131 will enable PetroTal to optimize its sales strategy, especially through the Iquitos refinery, enhancing its capacity to sell heavier Bretana crude under dry river conditions.
Enhancements and Future Growth
PetroTal’s management team has identified several low-risk operational initiatives to maximize the value of Block 131. These include identifying bypassed oil for horizontal wells, utilizing hydraulic pumps to reduce operating costs, and implementing cost-effective solutions for treating asphaltene.
Closing Conditions and Legal Advisement
The completion of this acquisition is contingent upon various conditions, including necessary regulatory approvals. Legal advisement for the deal is provided by Stikeman Elliott LLP, with Evercore Group LLC serving as the financial advisor to PetroTal.
This acquisition by PetroTal not only diversifies its production capabilities but also strengthens its operational efficiency and market positioning in Peru. The strategic acquisition of CEPSA Peruana underscores PetroTal’s commitment to growth and operational excellence, positioning the company for sustained success in the competitive oil production landscape.