PetroTal upbeat as it takes over Peru's block 131

(Sharecast News) - PetroTal announced the completion of its acquisition of a 100% working interest in Peru's block 131 on Monday, following its agreement to purchase CEPSA Peruana, the Peruvian business unit of Compañía Española de Petróleos (CEPSA). The AIM-traded firm said the transaction, which it first announced back in May, would significantly enhance its portfolio with high-quality light oil assets and infrastructure.

It said the Los Angeles field in block 131 had averaged production of 817 barrels per day of 45-degrees API light oil from January to September this year.

Existing facilities were capable of handling up to 5,500 daily barrels, providing a foundation for production growth and operational efficiencies.

The acquisition included two million barrels of proved recoverable reserves and 4.2 million barrels of proved plus probable reserves, with additional resource potential in unproduced zones.

PetroTal said it saw strategic opportunities in blending the light oil from block 131 with its heavier Bretaña crude, potentially improving pricing terms for sales to the Iquitos refinery.

The Los Angeles field had been in operation since its discovery by CEPSA in 2013, with cumulative production reaching 7.8 million barrels.

It said the block was under an exploration and production licence valid until 2038, with royalty rates scaling based on production volumes.

"The acquisition of block 131 represents an important milestone for PetroTal, and a pivotal step in the company's growth strategy," said president and chief executive officer Manuel Pablo Zúñiga-Pflücker.

"Importantly, block 131 diversifies our production base within Peru, establishing a new platform for future production and reserves growth.

"PetroTal's technical team has already identified numerous synergies between the block 131 assets and our existing operations at block 95."

Zúñiga-Pflücker added that, similar to the strategy already successfully employed at Bretaña, the company planned to apply modern drilling techniques at the Los Angeles field, which had "significant" unutilised facility capacity.

"We are currently finalizing our development plan for the assets and look forward to providing more details at the appropriate time."

At 1114 GMT, shares in PetroTal Corporation were down 0.22% at 35.67p.

Reporting by Josh White for Sharecast.com.