PetroTal Suspends Dividend Amid Q3 2025 Financial Results

Q3 2025 results: steady cash, softer earnings, and a dividend pause

PetroTal’s third quarter landed broadly as expected operationally, but with two clear headlines for investors: earnings softened and the Board has suspended the quarterly dividend for now. The company kept cash broadly flat at quarter end, continued to move barrels reliably via Brazil, and pushed ahead with erosion control works at Bretana. The near-term task is restoring production capacity after tubing leaks shut in five wells in August.

Headline numbers investors should know

PetroTal averaged 18,414 bopd of production and 18,028 bopd of sales in Q3 2025. Adjusted EBITDA came in at $31.6 million, translating to $19.03 per barrel. Free funds flow was $12.1 million, with capital expenditure rising to $19.7 million as activity stepped up. Net income fell to $3.6 million, down $13.9 million from Q2 2025. Total cash ended the quarter at $141.5 million, with $108.8 million available.

Metric	Q3 2025	Q2 2025	Q3 2024
Average production (bopd)	18,414	21,039	15,203
Average sales (bopd)	18,028	20,578	14,760
Realised sales price, net ($/bbl)	$43.33	$42.78	$58.06
Oil revenue ($000s)	$71,871	$80,110	$78,850
Operating expenses ($/bbl)	$8.34	$9.34	$8.23
Total transportation ($/bbl)	$3.36	$1.09	$2.22
Storage ($/bbl)	$2.76	$0.30	$0.51
Net operating income ($000s)	$44,494	$51,294	$57,233
Adjusted EBITDA ($000s)	$31,568	$44,310	$49,556
Net income ($000s)	$3,599	$17,513	$7,179
Capex ($000s)	$19,682	$17,064	$43,019
Free funds flow ($000s)	$12,098	$27,246	$6,537
Total cash ($000s)	$141,488	$142,102	$133,072
Available cash ($000s)	$108,809	$99,313	$121,328

Why profitability dipped despite stable pricing

Two things did the damage in Q3: downtime and higher logistics costs. Production and sales were lower quarter on quarter after leaks in production tubing forced the shut-in of five wells at Bretana from mid-August. Management responded by mobilising a service rig and started the pulling campaign in late October, with one well already repaired by 10 November.

On costs, the realised price was $43.33 per barrel against average Brent of $66.96. The gap reflects tariffs, fees and differentials of -$23.62 per barrel. Storage rose sharply to $2.76 per barrel in Q3 from $0.30 in Q2, lifting total transportation to $3.36 per barrel. In short, lower volumes plus pricier storage shaved EBITDA and net income.

Brazilian export route keeps barrels moving

Operationally, the marketing machine worked. Around 99% of Q3 sales moved via the Brazilian route, up from 90% in Q2. For a Peruvian heavy crude producer, consistent river export is crucial to avoid inventory build and protect netbacks. The trade-off is exposure to river levels and storage costs, which were visibly higher this quarter.

Dividend suspension: why it happened and why it matters

PetroTal’s Board has suspended the quarterly dividend for the time being. Management’s rationale is simple: preserve liquidity while they finalise the optimal development plan for Bretana and set the 2026 budget. Given net income fell to $3.6 million, capex nudged higher, and there is a multi-year erosion control programme under way, the decision is financially conservative.

Investors looking for income will not love this, but there is a clear capital allocation logic. If fixing wells, protecting the field from erosion, and refining the development sequence can add more value per share than a cash distribution today, the pause is sensible. The key will be transparent milestones and clarity when the dividend could resume.

Bretana field: repairs under way, capacity to be restored

Bretana averaged 17,938 bopd in Q3 2025, up 21% year on year, but below capacity after the tubing leaks. During the first 10 days of November, Bretana produced 14,983 bopd as the workover campaign began. Year to date, the company has produced 6.2 million barrels at an average of 19,594 bopd. The near-term catalyst is straightforward: repairing the remaining shut-in wells and ramping back towards capacity.

Los Angeles field update (Block 131)

At Los Angeles, production averaged 476 bopd in Q3 after a September workover shut in all three wells for about a week. Post-workover, October averaged roughly 560 bopd. Year to date, output sits at an average of 539 bopd with just over 170,000 barrels produced. Technical evaluation is ongoing ahead of the 2026 plan, targeted for mid-January 2026.

Erosion control project: spending now to safeguard value

PetroTal expensed $6.5 million on erosion control in Q3 as construction kicked on with the main piling barge and steel components arriving in August. Work is active on breakwaters #1 and #3 in front of the village of Bretana. Guidance remains unchanged: completion targeted for Q3 2026 with total project costs estimated at $65-75 million. This is not optional spend – it is about protecting field infrastructure and future cash flows.

Cash, liquidity and hedging

Total cash was $141.5 million at quarter end, of which $108.8 million was available. Restricted cash of $32.7 million included about $25 million in escrow tied to the COFIDE/BanBif loan drawn in Q2 2025. The company did not add new hedges in Q3 and has approximately 1.0 million barrels hedged between 1 October 2025 and 30 March 2026 using costless collars with a Brent floor of $65.00 per barrel, a ceiling of $82.50, and a cap of $102.50. As of 3 November, these hedges had a present value of about $2.1 million.

What I’m watching next

• Well repairs at Bretana – each tubing replacement should lift production and EBITDA in short order.
• 2026 budget and Bretana development plan in January – clarity on capex pace, drilling inventory, and timing is key to the dividend debate.
• Route mix and unit costs – reliance on Brazil kept sales flowing, but watch storage and transportation normalising from Q3’s elevated levels.
• Erosion control milestones – spend cadence versus the $65-75 million envelope and any impacts on operating disruption.
• Free funds flow trajectory –