How much cash does PetroTal really make, and what is a share of it worth?

The words on this page

Real cash (true cash)

What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.

Required return

The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.

Well life (reserve life)

How long the wells keep producing. After the life you choose, nothing is counted. Netherland, Sewell and Associates evaluated 110.2 million barrels of proved plus probable reserves at 31 December 2025 (66.4 million proved). Against 2025 production of 19,473 bopd that is about 15.5 years on 2P and 9.3 years proved; at the much lower 2026 guidance rate the 2P barrels would stretch past 25 years. The model default uses 15 years.

What a share is worth

Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.

Where the default growth comes from

PetroTal's 2026 budget guides to 11,750 to 12,250 bopd, roughly 38 per cent below 2025's 19,473, with drilling paused until October 2026, so the growth dial starts at minus 4 per cent, the most pessimistic default in this model.

The arithmetic, step by step

1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
4. Turn it into a share value. Add up the shrunk cash; take off net debt of US$−68M; take off the US$43M cost of cleaning up the wells if that switch is on; divide by 920.33M shares.
5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

• Only five years of history are used. PetroTal's first oil at Bretana came in mid 2018 and the 2019 to 2020 startup years were distorted by COVID shut-ins and river blockades, so the model starts at 2021, the first year at real scale. Operating cash flow, interest and fees paid, lease payments and capital spending for every year were hand-checked on 1 September 2026 against the audited annual reporting packages and matched to the thousand of dollars.
• Country risk is real and should be priced. The field sits in a remote part of Peru, production has been interrupted before by river blockades and social conflict with local communities, and the company's own 2026 budget cites legal, political and economic instability in Peru as a risk.
• Shipping depends on the river. Oil leaves Bretana by barge, dry season low water restricts movement and forces production cuts, and the riverbank erosion control project protecting the field is behind schedule after a contractor termination in March 2026.
• This is a one-field company: Bretana was 12,190 of 12,557 bopd of group production in Q2 2026, so anything that touches that field touches everything.
• 2026 guidance of 11,750 to 12,250 bopd is about 38 per cent below 2025. Drilling is paused until October 2026, the dividend was suspended for 2026, and the projection defaults reflect a shrinking near term.
• Interest is the interest and fees paid line from financing activities in the cash flow statements; it is nearly zero in 2024 because the bonds were repaid in early 2023 and new local facilities were only drawn late in the year.
• Net debt by year is aggregated data that counts lease liabilities as debt. Today's figure instead uses the company's own Q2 2026 measure: US$37.5 million of total debt against US$105.4 million of unrestricted cash, a net cash position of about US$67.9 million. A further US$31.5 million of restricted cash and roughly US$66 million of lease liabilities sit outside that number.
• Acquisitions are near zero by design: growth has been drilled, not bought. The only entry is US$1.7 million of cash for the Ucawa asset purchase in 2024.
• Capital spending is the additions to property, plant and equipment plus exploration assets per the audited investing sections; investing working-capital movements are excluded by convention. That matters most in 2025, when US$40.3 million of cash went out settling 2024's accrued drilling bills, so total investing outflows were US$115.9 million against the US$75.6 million of additions shown.
• Diluted weighted share counts for 2024 and 2025 are rounded aggregator figures; earlier years come from the audited statements. There is no analyst consensus target on the aggregator for TAL.
• The decommissioning liability of US$42.8 million is the discounted balance at 31 December 2025; the undiscounted estimate is US$71.4 million, mostly due 2037 to 2041.

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.