HOUSTON: In a significant expansion of its operations, PetroTal Corp. has announced the successful execution of an agreement to acquire CEPSA Peruana, S.A.C., thereby securing a 100% working interest in the Los Angeles field within Peru’s Block 131.
The $5.0 million cash deal marks PetroTal’s first acquisition since its Peruvian debut in 2017 and represents a major milestone in the company’s growth strategy.
Manuel Pablo Zuniga-Pflucker, President and CEO of PetroTal, expressed enthusiasm about the acquisition, stating, “This transaction not only complements our existing operations but also propels us towards immediate development plans and potential production enhancements.” The acquisition is expected to contribute an additional 900 barrels of oil per day (bopd) to PetroTal’s current production, with prospects for further expansion.
The assets involved in the acquisition are currently yielding approximately 900 bopd from the Cretaceous Cushabatay sand formation. With robust aquifer support, these wells boast a low decline rate and high-quality light crude oil. PetroTal’s management has outlined a strategic plan to capitalize on the assets’ potential, including the identification of new drilling locations, cost-effective operational adjustments, and chemical cost reductions.
The Los Angeles field, discovered in 2013, has produced around 7.6 million barrels to date. The field’s assets are under a concession agreement valid until 2037, with a royalty rate that adjusts based on production levels. All produced crude is sold to the state-owned Petroperu and transported to the Iquitos refinery, strategically passing by PetroTal’s Bretana oil field.
The completion of the acquisition hinges on regulatory approvals and other conditions, with a projected effective date of January 1, 2024. PetroTal has engaged Evercore Group LLC as its financial advisor and Stikeman Elliott LLP as legal counsel for the transaction.
This move by PetroTal is poised to enhance its operational footprint in Peru, offering synergies with the Iquitos refinery and the potential for improved netbacks due to a lighter oil mix. The company eagerly anticipates further developments as it integrates Block 131 into its portfolio.