Core Viewpoint - PetroTal Corp. is adjusting its operational strategy and capital budget for 2026 in response to challenges faced in 2025, prioritizing liquidity and production reliability over immediate growth [3][4]. 2026 Guidance Overview - The approved capital budget for 2026 is between $80 million and $90 million, with approximately $18 million carried over from 2025 [4]. - The capital investments are expected to support an annual average production of approximately 12,000 barrels of oil per day (bopd) [4][6]. - The company aims to maintain a minimum unrestricted cash liquidity of $60 million throughout the year [4][6]. Operating Strategy & Drilling Update - A tender process for a third-party drilling contractor has been initiated to mitigate scheduling risks encountered in 2025, with a contractor expected to be selected by the end of Q1 2026 [5][8]. - The first development well is targeted to be spudded by October 1, 2026, as part of a plan to restore production capacity to over 20,000 bopd [5][8]. Production & Sales Guidance - The production guidance for 2026 is set at 11,750 to 12,250 bopd, aligning with previous forecasts [11]. - Sales guidance assumes that 100% of Bretaña production will be sold through the Brazil route, fulfilling minimum volume requirements under crude oil marketing agreements [12]. Financial Discipline & Cost Structure - Adjusted EBITDA guidance for 2026 is $30 million, based on an annual average Brent oil price of $60.00 per barrel [13]. - The company is implementing a cost reduction program targeting significant reductions in operating expenses, general and administrative expenses, and capital expenditures [13]. - A total of $33 million has been allocated for erosion control in 2026, with $18 million expensed and $15 million capitalized [13].

Core Insights - The recent arrest of Venezuelan President Nicolas Maduro has significantly impacted the geopolitical landscape, leading to speculation about the future of the regime and its oil industry [1] Group 1: Venezuela's Oil Industry - Venezuela possesses the world's largest proven crude oil reserves, but the transition to usable production will require extensive time and investment in capital, contracts, infrastructure, and security [2] - Industry estimates indicate that Venezuela requires substantial investment to stabilize current oil output and even more to return to historical production levels, with oil majors hesitant to return without strong guarantees due to past nationalizations [5] - Venezuelan crude is characterized as heavy and sour, making it more challenging to refine compared to lighter crudes, which typically trade at a discount. This presents opportunities for refiners equipped to process heavy crude, potentially leading to expanded refining margins [6] Group 2: Market Dynamics and Opportunities - The immediate market opportunity lies not in buying oil but in identifying which companies can effectively process and transport Venezuela's heavy crude [3] - In the long term, there is significant upside potential if international oil majors return to invest and scale production, although this will be a multi-year process requiring tens to hundreds of billions in capital [7] - Short-term focus should be on routing and refining logistics, determining where the oil barrels will go and which companies will benefit before production levels increase meaningfully [7]

Core Viewpoint - PetroTal Corp. is focused on restoring production and cash flow amid weak oil prices, with recent operational improvements and a positive outlook for 2026 [2][4]. Production and Operations Update - Average group production in Q4 2025 was 15,258 barrels of oil per day (bopd), with 14,766 bopd from the Bretana field and 492 bopd from the Los Angeles field [4][9]. - Cumulative annual production for 2025 was over 7.1 million barrels, reflecting a 9.2% increase from 2024, with an annual average production of 19,473 bopd [4][9]. - The Bretana field achieved a cumulative production milestone of 30 million barrels, with proven reserves increasing from 16.9 million barrels in 2017 to 67 million barrels by the end of 2024 [6]. Cash and Liquidity Update - As of December 31, 2025, PetroTal had a total cash position of $139.1 million, with $112.4 million being unrestricted cash, up from $108.8 million at the end of Q3 2025 [7][9]. - The company had approximately $26.7 million in restricted cash, primarily related to an escrow account for a loan [7]. Leadership Changes - Jorge Osorio was appointed as Chief Operating Officer effective January 12, 2026, bringing extensive experience from Ecopetrol and BP, where he managed significant production and capital expenditures [3][12][11].

Core Viewpoint - Parex Resources Inc. has provided a production update for Q4 2025 and announced the abandonment of the Guapo-1 exploration well due to non-commercial hydrocarbon production [1][4]. Production Update - Average production for Q4 2025 was 48,606 barrels of oil equivalent per day (boe/d), representing an 11% increase from Q3 2025 [6]. - Production breakdown for the three months ended December 31, 2025: - Block LLA-34: 19,719 boe/d - Southern Llanos: 22,470 boe/d - Northern Llanos: 2,848 boe/d - Magdalena Basin: 2,065 boe/d - Natural Gas Production: 1,504 mcf/d [2]. Monthly Production Breakdown - Monthly average production figures: - October 2025: 49,300 boe/d - November 2025: 50,100 boe/d - December 2025: 46,500 boe/d [3]. Guapo-1 Exploration Well - The Guapo-1 exploration well was spudded in October 2025 and reached a target depth of approximately 15,000 feet. The well was abandoned after determining that hydrocarbon production was not commercial, with drilling costs around $12 million [4]. Company Overview - Parex Resources Inc. is one of the largest independent oil and gas companies in Colombia, focusing on sustainable and conventional production. The company is headquartered in Calgary, Canada, with an operating office in Bogotá, Colombia [5].

Group 1: Venezuela's Oil Industry Recovery - The recovery of Venezuela's oil industry is expected to be a long-term process, with significant production gains unlikely in the near future [1][2] - It may take at least 5 to 10 years for Venezuela to return to its previous output level of 3 million barrels of crude oil per day [2] - Even if Venezuela achieves this output, it would only marginally impact the global oil market, which currently produces over 100 million barrels per day [3] Group 2: U.S. Refiners and Market Dynamics - U.S. refiners are well-positioned to benefit from Venezuela's heavy crude oil, as they have substantial spare capacity for processing such oil [4] - Following the political shift in Venezuela, American energy companies with advanced refining capabilities have seen significant stock gains [5] - Notable stock performances include Valero Energy Corp. (+17.20%), PBF Energy Inc. (+17.64%), and Phillips 66 (+11.80%) [5] Group 3: Political Context and Future Projections - President Donald Trump has claimed that Venezuela will supply 30 to 50 million barrels of high-quality, sanctioned oil to the U.S. at market prices [6] - The proceeds from this oil sale are intended to benefit both the people of Venezuela and the United States [7]

Core Viewpoint - Jim Mellon, a billionaire investor, emphasizes that Venezuela's oil industry is unlikely to see meaningful production gains in the near future, indicating a long and challenging recovery process [1][2]. Group 1: Recovery Timeline - Mellon states that it will take at least 5 to 10 years for Venezuela to return to its previous output level of 3 million barrels of crude oil per day [2]. - He highlights that even if Venezuela achieves this output, it would only marginally impact the global oil market, which currently produces over 100 million barrels per day [3]. Group 2: U.S. Refiners' Position - Venezuela's heavy crude oil output positions U.S. refiners to benefit first from any potential recovery in the sector [3]. - The U.S. has significant spare capacity for heavy oil, especially as it reaches peak shale production and reduces imports from Canada [4]. Group 3: Market Reactions - Following the political shift in Venezuela, American energy companies with advanced refining capabilities have experienced notable stock gains, with Valero Energy Corp. up by 17.20% and PBF Energy Inc. up by 17.64% [5]. - President Trump announced that Venezuela would be supplying 30 to 50 million barrels of "high quality, sanctioned oil" to the U.S., which will be sold at market prices [6].

Core Viewpoint - The arrest of Venezuelan President Nicolas Maduro by the US has significant implications for the oil market, with a focus on potential long-term supply increases rather than immediate disruptions [1] Supply Uncertainty - The oil market is currently facing further supply uncertainty, which has been a recurring theme over the past year [2] - The nature of the power transition in Venezuela will determine short-term supply risks, with a messy transition posing greater risks [2] Transition of Power - Vice President Delcy Rodríguez has assumed power, and her initial defiance is shifting towards a more cooperative stance with the US, which could lead to a smoother transition and potential downside for oil prices [3] Sanctions and Supply Potential - A smoother transition may increase the likelihood of the US lifting its blockade on sanctioned oil tankers, potentially leading to short-term price declines and easing of sanctions in the future [4] Venezuelan Oil Supply Risks - A chaotic transition could put approximately 900,000 barrels per day (b/d) of supply at risk, primarily affecting exports to China and US refiners [5] - The current forecasts suggest that the loss of this supply could provide some upside, but a well-supplied market limits the potential for significant price increases [5] Long-term Oil Market Outlook - The outlook for the oil market in 2026 remains unchanged, with expectations of a well-supplied market keeping prices low, forecasting Brent to average $57 per barrel [6] - For 2027, there are downside risks to the $62 per barrel forecast if Venezuela's supply increases significantly, contingent on OPEC+ responses [6] Venezuelan Oil Production Context - Venezuela has significant oil reserves but currently produces just over 900,000 b/d, which is less than 1% of global consumption [7] - Production has declined from nearly 3 million b/d in the early 2000s to below 2.4 million b/d by 2015, with further declines since then [7] Investment Needs for Recovery - A recovery in Venezuelan oil production will require substantial investment in infrastructure, which has been neglected for years [9] - Foreign oil companies may be hesitant to invest due to past expropriations and unpaid damages, necessitating a more stable environment for investment [10][11] Heavy Crude Supply Dynamics - Venezuelan heavy crude oil is crucial for US Gulf Coast refiners, with imports dropping from 1.3 million b/d in the early 2000s to less than 150,000 b/d in 2025 [12] - Increased supply from Venezuela could pressure other heavy crude suppliers, particularly Canada, in the long term [13]

Core Insights - PetroTal Corp. reported solid financial results for Q3 2025, with a 21% increase in production compared to the same period last year, driven by healthy river exports and the 2024 development drilling program [5][11] - The company has decided to suspend its quarterly dividend to preserve liquidity while evaluating the optimal development plan for the Bretana field [6] Financial Highlights - Average production for Q3 2025 was 18,414 barrels of oil per day (bopd), while average sales were 18,028 bopd [7] - Total sales for the quarter reached 1,658,621 barrels, with an average Brent price of $66.96 per barrel [9] - Adjusted EBITDA for Q3 2025 was $31.6 million ($19.03 per barrel), and free funds flow was $12.1 million ($7.29 per barrel) [9] - Net income for the quarter was $3.6 million ($2.17 per barrel), a decrease of $13.9 million compared to the prior quarter [9] Operational Updates - The Bretana field produced an average of 17,938 bopd in Q3 2025, with production impacted by leaks in production tubing [11] - The Los Angeles field averaged 476 bopd in Q3 2025, a decline of approximately 50 bopd compared to the prior quarter [12] - The Bretana Erosion Control Project is on schedule, with $6.5 million expensed in Q3 2025, and total project costs estimated between $65-75 million [14] Cash and Liquidity - PetroTal ended Q3 2025 with total cash of $141.5 million, an increase from $133.1 million at the end of Q3 2024 [15] - Available cash as of September 30, 2025, was $108.8 million, down from $121.3 million the previous year [15] - The company maintains coverage on approximately 1.0 million barrels through costless collars with a Brent floor price of $65.00 per barrel [16]

Core Insights - Parex Resources Inc. reported strong financial and operational results for Q3 2025, with a regular dividend declared for Q4 2025 of C$0.385 per share [1][16][6] Financial Performance - The company generated funds flow from operations (FFO) of $105 million, equating to $1.09 per share, and realized a net income of $50 million or $0.52 per share basic [6][7][11] - Average oil and natural gas production was 43,953 boe/d, a 3% increase compared to the previous quarter [6][7] - Operating netback was reported at $34.71/boe, supported by favorable oil price differentials and lower current tax [6][7] - Capital expenditures for the quarter totaled $80 million, primarily focused on activities at LLA-32, LLA-74, LLA-34, and Capachos [6][7] Production and Operational Highlights - October 2025 average production reached 49,300 boe/d, indicating a steady increase in production momentum [6][13] - The company expects to exceed its FY 2025 average production guidance of 43,000 to 47,000 boe/d [11][12] - Production at LLA-32 has ramped up significantly, exceeding three times previous levels, with current production rates over 12,000 boe/d [6][14] - Near-field exploration success at LLA-74 has resulted in a 75% success rate in 2025, with five producing wells [6][14] Future Outlook - The company plans to bring onstream four to six production-adding wells in Q4 2025, alongside drilling the VIM-1 exploration well [14][19] - Management anticipates being at the higher end of the capital expenditure range of $285 to $315 million for 2025, driven by successful follow-up drilling [12][11] - The Guapo-1 exploration well on the VIM-1 block has been spud, targeting gas and condensate, with preliminary results expected by year-end 2025 [19][6]

Core Insights - PetroTal Corp. reported a 21% year-over-year increase in average production, reaching 18,414 barrels of oil per day (bopd) in Q3 2025, despite production challenges at the Bretana field [2][4] - The company paid a quarterly dividend of $0.015 per share, totaling approximately $45 million in returns to shareholders year-to-date [2] - As of September 30, 2025, PetroTal had total cash of $141.5 million, with $108.8 million being unrestricted [2][8] Production and Operations Update - Group production averaged 18,414 bopd in Q3 2025, with 17,938 bopd from the Bretana field and 476 bopd from the Los Angeles field [4] - Bretana field production decreased by approximately 2,600 bopd from the previous quarter but increased by about 2,800 bopd compared to Q3 2024 [4] - Cumulative annual production through September 30 was over 5.7 million barrels, a 21% increase from the first nine months of 2024 [4] Challenges and Remedial Actions - The Bretana field has been producing below capacity since mid-August due to leaks in production tubing, leading to the shut-in of five wells [5] - In response, PetroTal mobilized a service rig to address the issues and plans to restore production by the end of October [5] - Production is expected to ramp up in November and December as shut-in wells are brought back online, with no change to the 2025 annual average production guidance of 20,000-21,000 bopd [5] Cash and Liquidity Position - PetroTal ended Q3 2025 with total cash of $141.5 million, an increase in unrestricted cash from $99.3 million at the end of Q2 2025 [8] - The company had approximately $32.7 million in restricted cash, primarily related to an escrow account for a loan [8] - Accounts payable and receivable were approximately $51.9 million and $56.6 million, respectively, showing a decrease from the previous quarter [9] Hedging and Financial Strategy - PetroTal did not initiate new production hedges during Q3 2025 but maintains hedges on approximately 1 million barrels for the period from October 1, 2025, to March 30, 2026 [10] - The existing hedges have a Brent floor price of $65.00 per barrel and a ceiling of $82.50 per barrel, with a cap of $102.50 per barrel [10] Future Developments - The erosion control project at Bretana is progressing, with construction activities ongoing [6] - The company is preparing to import its owned drilling rig to Peru in Q1 2026, with development drilling expected to resume in Q2 2026 [7]