Centaurus Energy Inc. (CTA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. And welcome to the Centaurus Energy second quarter earnings conference call. [Operator Instructions] This call is being recorded on August 31, 2022. Mr. Tawil, you may now begin your conference.

Thank you very much, operator. Good morning, everybody, and welcome to Centaurus Energy's Second Quarter 2022 Earnings Call. In the second quarter, we report our first quarter of results without the operational activities of Coiron Amargo Sur Este consolidated into our performance. As expected, in mid-August, the company received its second semiannual payment under the Coiron Amargo Sur Este royalty stream. As we've previously detailed, the company will continue to receive fixed-rate payments semiannually based off of the production of the concession, which is in development, reaching a total amount of $17 million net to Centaurus over time. As we reported in May, since the close of the second quarter, the company has embarked on a multi-well workover program in conjunction with our partner, REFINAR S.A., in the Puesto Morales concession in the province of Rio Negro. Concurrently with the workover campaign, Centaurus has independently started a 10-well pulling program. Although the activities are still ongoing, our total output today is materially higher than at the end of the second quarter. We are looking to continue the previously announced activities, and the leadership of the company is looking for other ways to increase production and profitability. In contrast to the progress of the company, the government of Argentina recently has been in major flux. Within 2 weeks in the month of July, the country saw its Minister of Economy changed twice. The country's new and current Minister of Economy, Sergio Massa, was the previous presidential candidate and is considered pro-markets within the leftist coalition. Nevertheless, his job is a tough one, namely, he is tasked with achieving stability and trying to regain credibility in a market where inflation is expected to hit 90% year-over-year. In case that wasn't enough, the current Vice President and previous President, Cristina Kirchner, is under criminal legal pressure again with a federal prosecutor seeking a 12-year prison sentence for the alleged corruption. As usual, macro matters on the ground in Argentina are challenging. However, more importantly for Centaurus, the price of oil continues to be relatively elevated. And as we've previously stated, we expect that the price of oil in the open market will remain above $100 for some time to come. I will now turn to a review of the financial statements and the financial performance for the second quarter. With the exit from Coiron Amargo Sur Este and the settlement of the Curamhuele-related liabilities, the company now has a positive book value for the first time in many years. Our cash balance and current assets remain at healthy levels. In light of the company's slimmer asset base and production capacity, the company is focused on driving operating expenditures lower and increasing revenue through increased production. And operator, with that, I'd like to go ahead and turn the call over for questions.

[Operator Instructions] Mr. Tawil, it seems there are no questions. Please, go ahead.

Sure. I'd like to wait another couple of seconds just to make sure that the number -- the numerous participants on the call are not being ignored. Okay, operator. It seems we've given them sufficient time. I appreciate your joining our second quarter earnings call. On behalf of management and Board of Directors of Centaurus Energy, I thank you for participating in the call. And we look forward to speaking with you after the close of the third quarter. Thank you very much and have a nice day.

Thank you. Ladies and gentlemen, this concludes your conference for today. We thank you for participating and ask that you please disconnect your lines.