PetroTal Announces Approval of Environmental Impact Assessment to Develop the Bretaña Oil Field and Signs Pipeline Contract with PetroPeru

Calgary and HoustonMay 29, 2019—PetroTal Corp. (“PetroTal” or the “Company”) (TSX-V: TAL and AIM: PTAL), a development and production company focused on oil assets in Peru, is pleased to announce the Company has received approval of the Environmental Impact Assessment (“EIA”) to fully develop the Bretaña oil field in Block 95.  The Company also signed a contract with PetroPeru for access to the existing pipeline for transport of crude oil to commercial markets.

The approval of the EIA sets the stage for PetroTal to continue with the full field development of the Bretaña oil field, and allows the Company to fully develop its reserves. The EIA provides the authorization to drill future development wells and install needed production equipment and facilities. The EIA also sets forth the work needed to return the field to its original condition at the end of the license contract, including the safe and environmentally responsible removal of facilities and reforestation of the affected lands.

Additionally, the Company signed a contract with PetroPeru, the State owned oil company, who operates the North Peruvian Pipeline (“ONP”) to deliver oil to the Pacific coast via the pipeline.  The contract is important to efficiently access commercial markets for the Company’s production.  PetroTal currently sends oil to multiple markets via barges and trucks, however the use of the pipeline mitigates potential production constraints. The Company plans to access the ONP once it reaches 5,000 barrels of oil per day (“BOPD”) by mid year.

Manolo Zuniga, President and Chief Executive Officer, said:

“I personally congratulate the team in Lima who have worked diligently over the past year and a half to finalize this permit to develop the field and execute the ONP contract. It is a testament to the professional staff we have and the regard for safe and efficient operations that brought this to the finish line. Additionally, we want to thank each and every person who reviewed and commented at various levels of the government along the way. It is clear that our team here at PetroTal, most of whom are Peruvian, are working in the best interest of every stakeholder, from the government to employees, to shareholders, and the communities in which we work. PetroTal has a commitment to environmentally safe and efficient development of the assets that we have been tasked to develop. Furthermore, to sign the contract for use of the pipeline allows us to continue ramping production for the next several months. We have been working diligently to sign this agreement before bringing total Bretaña field production to 5,000 BOPD by mid-year, both of which are key milestones for PetroTal.”

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐listed (TSX‐V: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's development asset is the Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing and exploiting the Bretaña oil field. More information on the Company can be found at www.PetroTal‐Corp.com.

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com

T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T : (713) 609-9101

Mark Antelme / Jimmy Lea
Celicourt Communications
petrotal@celicourt.uk
T : 44 207 520 9261

James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494

John Prior / Emily Morris / George Price
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to PetroTal’s business strategy, objectives, strength and focus and the impact of the declaration of commerciality in respect of the Bretaña oil field. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. In addition, statements relating to expected production, reserves, resources, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves and resources described can be profitably produced in the future. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions, availability of required equipment and services and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in the Company’s annual information form for the year ended December 31, 2017 and management’s discussion and analysis for the three and nine months ended September 30, 2018, which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


PetroTal Announces Fiscal Year-end Financial Results and Operations Update

Calgary, Alberta and Houston, Texas April 24, 2019—PetroTal Corp. (“PetroTal” or the “Company”) (TSX-V: TAL and AIM: PTAL) is pleased to provide a summary of its 2018 year-end financial and operating results.

Selected financial, reserves and operational information is outlined below and should be read in conjunction with the Company’s audited consolidated financial statements (“Financial Statements”), management’s discussion and analysis (“MD&A”) and annual information form (“AIF”) for the year ended December 31, 2018, which are available on SEDAR at www.sedar.com and the Company’s website at www.PetroTal-Corp.com. Reserves numbers presented herein were derived from an independent reserves report (the “NSAI Report”) prepared by Netherland, Sewell & Associates, Inc. (“NSAI”) effective December 31, 2018. All figures referred to in this press release are denominated in U.S. dollars.

2018 HIGHLIGHTS

  • Commenced operation of Bretaña oil field assets, bringing the field on production in five months;
  • Completed the Long-Term Testing facility installation and initiated production, 25 percent under budget;
  • Full field oil production facilities brought online in October 2018;
  • Declared commercialty in the Bretaña field in November 2018;
  • 176,000 barrels (“bbl”) of oil produced during 2018, and approximately 280,000 barrels to date;
  • Proved (“1P”) Reserves estimated at approximately 17.9 million(1) bbl of oil gross;
  • Proved + Probable (“2P”) Reserves estimated at approximately 39.4 million(1) bbl of oil gross;
  • Proved + Probable + Possible (“3P”) Reserves estimated at approximately 78.7 million(1) bbl of oil gross;
  • Pre-tax NPV-10 of approximately $535 million for 2P Reserves and $1.25 billion for 3P Reserves; and
  • 2P Reserves NPV-10 increase of 90%.

Note:

  1. Reserves include a total of approximately 2,963.6 Mbbl (3P) of oil for surface facility use across all categories (960.7 Mbbl (1P) and 1,818.2 Mbbl (2P)). See “Summary of Oil Reserves and Net Present Values as of December 31, 2018” for a summary of Company reserves, which exclude these amounts.

OPERATIONS UPDATE

The Company’s objective of developing the Bretaña oil field on a modular basis and putting the field online by year-end 2018 was accomplished ahead of schedule and under budget.  Although the Company initially estimated the process to bring the field online would take 10-12 months and approximately $24 million in capital costs, it was accomplished in five months for a total capital cost of approximately $18 million.  In October, the field’s first phase oil production facilities were installed on time and within budget.  The Company was able to declare commerciality in Bretaña with the achievement of sustained production operations.  PetroTal successfully completed a secondary listing on the AIM Market of the London Stock Exchange, with first trading on December 24, 2018.  The year-end oil reserves, which were previously announced on April 11, 2019, are summarized in the charts below.

 

2018 YEAR-END RESERVES SUMMARY

The summary below sets forth PetroTal’s reserves as at December 31, 2018, as presented in the NSAI Report. The figures in the following tables have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and the reserve definitions contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). In addition to the summary information disclosed in this press release, more detailed information is included in the AIF.

The reserves estimated by NSAI on the charts below exclude up to three million barrels that are expected to be used for power generation in the field.

Company

Heavy Oil Reserves(2)

(Mbbl)(1)

Future Net Revenue

Before Income Taxes (USM$)(4)(5)(6)

Category Gross Net Discounted at 0% Discounted at 5% Discounted at 10% Discounted at 15% Discounted at 20%
Proved Developed Producing

Proved Undeveloped

1,559.0

15,378.5

1,559.0

15,378.5

75,696.3

202,879.9

61,506.5

143,618.9

51,624.6

99,380.2

44,472.9

66,606.6

39,112.0

42,129.6

Total Proved 16,937.5 16,937.5 278,576.2 205,125.4 151,004.8 111,079.5 81,241.6
Probable Undeveloped 20,597.8 20,597.8 772,240.6 523,525.2 384,528.6 299,631.9 243,749.6
Proved + Probable 37,535.4 37,535.4 1,050,816.8 728,650.6 535,533.4 410,711.4 324,991.2
Possible Undeveloped 38,278.9 38,278.9 1,684,251.1 1,060,626.2 718,814.0 516,783.2 389,791.8
Proved + Probable + Possible 75,814.2 75,814.2 2,735,067.9 1,789,276.8 1,254,347.5 927,494.6 714,783.0

Notes:

  1. Totals may not add because of rounding. Mbbl are thousands of barrels.
  2. PetroTal owns a 100 percent company gross interest and a 100 percent company net interest in these properties. Company reserves exclude a total of approximately 2,963.6 Mbbl (3P) of oil for surface facility use across all categories (960.7 Mbbl (1P) and 1,818.2 Mbbl (2P)).
  3. Net reserves do not include deductions for royalty expenses for net oil volumes; government royalties are included in property and mineral taxes.
  4. Based on NSAI’s December 31, 2018 escalated price forecast. See “Summary of Pricing and Inflation Rate Assumptions – Forecast Prices and Costs”.
  5. It should not be assumed that the undiscounted or discounted net present value of future net revenue attributable to the Company’s reserves estimated by NSAI represent the fair market value of those reserves.
  6. All future net revenues are estimated using forecast prices and cost assumptions, arising from the anticipated development and production of reserves, after the deduction of royalties, operating costs, development costs and abandonment and reclamation costs but before consideration of indirect costs such as administrative, overhead and other miscellaneous expenses. There is no assurance that the forecast prices and costs assumptions will be attained, and variances could be material. The recovery and reserve estimates of the Company’s reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.  Actual reserves may be greater than or less than the estimates provided herein.

SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS – FORECAST PRICES AND COSTS

The forecast cost and price assumptions assume increases in wellhead selling prices and include inflation with respect to future operating and capital costs. Crude oil benchmark reference pricing, inflation and exchange rates utilized by NSAI as at December 31, 2018 were as follows:

Period Ending Oil Price (US$/BBL)
12-31-2019 63.88
12-31-2020 68.20
12-31-2021 70.98
12-31-2022 73.35
12-31-2023 75.40
12-31-2024 77.35
12-31-2025 79.40
12-31-2026 81.61

Thereafter, escalated 2 percent on January 1 of each year.

Future Development Costs

The following information sets forth development costs deducted in the estimation of PetroTal’s future net revenue attributable to the reserve categories noted below:

  • Proved $178.0 million
  • Proved + Probable $251.1 million
  • Proved + Probable + Possible $368.8 million

The future development costs are estimates of capital expenditures required in the future for PetroTal to convert the corresponding reserves to proved developed producing reserves.

In 2019, the Company drilled and completed a second oil producing well at Bretaña, the BN 95-2-2-2XD, on time and within budget.  The well came online at approximately 2,250 bbl of oil per day (“BOPD”) in a vertical completion in the Vivian formation.  The well, which reached total depth on April 9, 2019, was completed as an oil producer in the Vivian formation in the northern portion of the Bretaña structure.  The well was brought online at an initial rate of approximately 2,250 barrels of oil per day (“BOPD”). This is an early production rate and more detailed production data will be announced in due course.  The team also spud a third oil development well, the BN-95-3H, which will be a horizontal producer in the Vivian formation, and which is expected to come online in mid-June.

Manolo Zuniga, PetroTal’s President and Chief Executive Officer, stated:

“We are executing on multiple fronts and in 2018 we accomplished many milestones that will set the Company up for future success and growth.  Our operations team has been hitting on all cylinders, bringing the field online early, either on or under budget, and moving into commercial production at year end.  Our reserves report showed a significant increase in present value across all reserve categories.  With our 2P pre-tax NPV-10 at approximately $535 million, we have grown the value to our stakeholders by 90 percent.”

“To date in 2019 we have drilled and completed the second producing oil well at Bretaña, having come online only one week ago at 2,250 BOPD.  This rate was over the course of five days and we will provide more detail on the well and its production when we have sustained production data, to allow for a better stabilized rate.  We have moved on with the spud of the third oil producing well which we expect to be online in mid-June.  The original producer is still producing approximately 800 BOPD, in line with our internal expectations due to normal declines expected as water is produced from the aquifer that is the main drive mechanism for the Vivian formation.”

NEAR AND MEDIUM-TERM OBJECTIVES

  • Drill and complete up to four wells to materially contribute to production totals in 2019;
  • Install phase two production facilities in the field with oil production capacity of 10,000 BOPD;
  • Secure farm-out partner and drill high impact Osheki exploration well on Block 107;
  • Continue Bretaña development drilling and install future phases of production facilities; and
  • Look for strategic and synergistic acquisitions to expand the Company’s asset base in Peru.

FINANCIAL HIGHLIGHTS

The following table summarizes key financial highlights associated with the Company’s financial performance for the years ended December 31, 2018 and 2017. See the Financial Statements and MD&A for further details.

December 31, 2018
US$000s
December 31, 2017 US$000s
Net Revenues 9,994 -
Net Loss (4,621) (2,754)
Total Assets 96,097 98,766
Total Liabilities 18,570 16,723
Total Shareholders’ Equity 77,527 82,043

OTHER COMPANY UPDATES

Charles Fetzner, VP of Asset Development, resigned from the Company for personal family reasons effective as of April 18, 2019.  Mr. Fetzner was a founder of PetroTal LLC, the original private company, in December 2015 and was part of the new management team following the completion of PetroTal’s go-public transaction on December 18, 2017.

Mr. Zuniga commented “We wish Chuck and his family the best and we fully understand his desire to spend time with his family at this time.  Chuck was an integral part of our transition from a private company to public entity.  Mr. Estuardo Alvarez-Calderon, VP of Exploration and Production, will assume Chuck’s responsibilities which include the important Osheki farm-in process.  Again, we wish the Fetzner family the best.”

As previously announced on September 14, 2018 and October 31, 2018, the Corporation has issued an aggregate of 4,008,333 performance share units (“PSUs”) to certain officers of the Company.  The original terms of the PSUs provided for vested in equal tranches over three years. The Board of Directors has amended the terms of the PSUs to provide that the PSUs awarded to executives will vest three years from the date of issuance.  The Board believes the change to the vesting terms will strengthen the link between executive compensation and long-term shareholder value.

ABOUT PETROTAL

PetroTal is a publicly-traded, dual-listed (TSX-V: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's development asset is the Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing and exploiting the Bretaña oil field.  More information on the Company can be found at www.PetroTal-Corp.com.

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com

T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com

T: (713) 609-9101

Mark Antelme / Henry Lerwill
Celicourt Communications (Financial PR)
petrotal@celicourt.uk
T: 44 (0) 207 520 9261

James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494

John Prior / Emily Morris / George Price
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

 

READER ADVISORIES 

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal’s business strategy, objectives, strength and focus, including developing the Bretaña oil field on a modular basis; drilling and completion activities and the results of such activities; construction of production facilities; securing a farm-out partner in Osheki; future acquisitions; the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production and revenue; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future.

Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside,  prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in AIF and MD&A, which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about PetroTal’s prospective results of operations, production, NPV-10, future net revenue, future development costs and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about PetroTal’s anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


PetroTal Brings Second Oil Well Online and Spuds Third Well in Bretaña Field

Calgary, Alberta and Houston, TexasApril 23, 2019—PetroTal Corp. (“PetroTal” or the “Company”) (TSX-V: TAL and AIM: PTAL) is pleased to announce that the Company has placed a second oil well, the BN 95-2-2-2XD oil development well, on production through long term test facilities at the Bretaña field and spud a third well, the BN 95-3H oil well.

The Company’s second well, which reached total depth on April 9, 2019, was completed as an oil producer in the Vivian formation in the northern portion of the Bretaña structure.  The well was brought online at an initial rate of approximately 2,250 barrels of oil per day (“BOPD”). This is an early production rate and more detailed production data will be announced in due course.

The Company has also spud the BN 95-3H well the northern portion of the Bretaña field, which will be completed as a horizontal producer in the Vivian formation.  This well is expected to take 60 days to drill, complete and be brought online.

The Company’s first discovery well, which came online in mid-2018, is producing an average of 800 BOPD.

Manolo Zuniga, President and Chief Executive Officer, commented:

“We are pleased that the second oil well has come online as planned.  The initial rate is an early production rate, however. Once the well has had time to stabilize, we will provide additional information to stakeholders.  With the first two wells online the field has exceeded 3,000 BOPD.  The Company’s third oil well was spud on April 20, 2019.  This well will also target the northern part of the field which will give us additional data points to continue defining the reservoir.”

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T: (713) 609-9101

Mark Antelme / Henry Lerwill
Celicourt Communications (Financial PR)
petrotal@celicourt.uk
T: 44 (0) 207 520 9261

James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494

John Prior / Emily Morris / George Price
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

READER ADVISORIES 

 

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal’s business strategy, objectives, strength and focus; drilling and completion activities and the results and timing of such activities; the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production and revenue; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in the Company’s annual information form for the year ended December 31, 2017 and management’s discussion and analysis for the three and nine months ended September 30, 2018 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

 

OIL AND GAS INFORMATION: References in this press release to production test rates, initial test production rates, and other short-term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the Company cautions that the test results should be considered to be preliminary.

 

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about PetroTal’s prospective results of operations, production, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about PetroTal’s anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including Canadian Securities Administrators’ National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


PetroTal Announces Year-end 2018 Oil Reserves

New report shows NPV-10 growth of 90% to $535 million for 2P Reserves and $1.25 billion for 3P Reserves

Calgary, Alberta and Houston, Texas – April 11, 2019—PetroTal Corp. (“PetroTal” or the “Company”) (TSX-V: TAL and AIM: PTAL) is pleased to provide a summary of the Company’s 2018 year-end reserves in the Bretaña field in Northern Peru.  Reserves numbers presented herein were derived from an independent reserves report (the “NSAI Report”) prepared by Netherland, Sewell & Associates, Inc. (“NSAI”) effective December 31, 2018. Unless otherwise noted, all figures referred to in this press release are denominated in U.S. Dollars.

2018 Year-end Reserve Highlights

  • Proved (“1P”) Reserves estimated at approximately 17.9 million(1) barrels (“bbl”) of oil gross;
  • Proved + Probable (“2P”) Reserves estimated at approximately 39.4 million(1) bbl of oil gross;
  • Proved + Probable + Possible (“3P”) Reserves estimated at approximately 78.7 million(1) bbl of oil gross;
  • NPV-10 of approximately $535 million for 2P Reserves and $1.25 billion for 3P Reserves; and
  • 2P Reserves NPV-10 increase of 70%.
Note:
1. Reserves include a total of approximately 2,963.6 Mbbl (3P) of oil for surface facility use across all categories (960.7 Mbbl (1P) and 1,818.2 Mbbl (2P)). See “Summary of Oil Reserves and Net Present Values as of December 31, 2018” for a summary of Company reserves, which exclude these amounts.

The Company has certified total 2P reserves of 39.4 million barrels of recoverable oil at the Bretaña field. The net present value of before tax future net revenues discounted at 10 percent (“NPV-10”) of 2P oil reserves is approximately $535 million.  On a 1P Reserves basis, reserves increased by 22% to 17.9 million bbl from 14.7 million bbl gross, with an associated NPV-10 increasing three-fold to $151 million from $38 million.  Additionally, the NPV-10 of the 3P Reserves increased by 58%.

Manolo Zuniga, PetroTal’s President and Chief Executive Officer, stated:

“The increased NPV-10 is a result of lower than expected development costs, partly as a result of using produced oil to power the field.  The lower development costs truly drive the NPV-10 of the project, where we see a major increase from $282 million to $535 million.   Even more important is the NPV-10 of the 3P reserves, estimated at $1.25 billion, which underpins our future value, which could primarily be obtained by increasing the field’s recovery factor.”

2018 Year-end Reserves Summary

The summary below sets forth PetroTal’s reserves as at December 31, 2018, as presented in the NSAI Report.  The figures in the following tables have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and the reserve definitions contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). In addition to the summary information disclosed in this press release, more detailed information will be included in PetroTal’s annual information form for the year ended December 31, 2018 (the “AIF”) to be filed on SEDAR (www.sedar.com) and posted on PetroTal’s website (www.Petrotal-corp.com) in April 2019.

The reserves estimated by NSAI on the charts below exclude up to three million barrels that are expected to be used for power generation in the field.

Summary of Oil Reserves and Net Present Values as of December 31, 2018

Company

Heavy Oil Reserves(2)

(Mbbl)(1)

Future Net Revenue

Before Income Taxes (USM$)(4)(5)(6)

Category Gross Net Discounted at 0% Discounted at 5% Discounted at 10% Discounted at 15% Discounted at 20%
Proved Developed Producing

Proved Undeveloped

1,559.0

15,378.5

1,559.0

15,378.5

75,696.3

202,879.9

61,506.5

143,618.9

51,624.6

99,380.2

44,472.9

66,606.6

39,112.0

42,129.6

Total Proved 16,937.5 16,937.5 278,576.2 205,125.4 151,004.8 111,079.5 81,241.6
Probable Undeveloped 20,597.8 20,597.8 772,240.6 523,525.2 384,528.6 299,631.9 243,749.6
Proved + Probable 37,535.4 37,535.4 1,050,816.8 728,650.6 535,533.4 410,711.4 324,991.2
Possible Undeveloped 38,278.9 38,278.9 1,684,251.1 1,060,626.2 718,814.0 516,783.2 389,791.8
Proved + Probable + Possible 75,814.2 75,814.2 2,735,067.9 1,789,276.8 1,254,347.5 927,494.6 714,783.0
Notes:
  1. Totals may not add because of rounding. Mbbl are thousands of barrels.
  2. PetroTal owns a 100 percent company gross interest and a 100 percent company net interest in these properties. Company reserves exclude a total of approximately 2,963.6 Mbbl (3P) of oil for surface facility use across all categories (960.7 Mbbl (1P) and 1,818.2 Mbbl (2P)).
  3. Net reserves do not include deductions for royalty expenses for net oil volumes; government royalties are included in property and mineral taxes.
  4. Based on NSAI’s December 31, 2018 escalated price forecast. See “Summary of Pricing and Inflation Rate Assumptions – Forecast Prices and Costs”.
  5. It should not be assumed that the undiscounted or discounted net present value of future net revenue attributable to the Company’s reserves estimated by NSAI represent the fair market value of those reserves.
  6. All future net revenues are estimated using forecast prices and cost assumptions, arising from the anticipated development and production of reserves, after the deduction of royalties, operating costs, development costs and abandonment and reclamation costs but before consideration of indirect costs such as administrative, overhead and other miscellaneous expenses. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of the Company’s reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.  Actual reserves may be greater than or less than the estimates provided herein.
Period Ending Oil Price (US$/BBL)
12-31-2019 63.88
12-31-2020 68.20
12-31-2021 70.98
12-31-2022 73.35
12-31-2023 75.40
12-31-2024 77.35
12-31-2025 79.40
12-31-2026 81.61

Thereafter, escalated 2 percent on January 1 of each year.

Future Development Costs

The following information sets forth development costs deducted in the estimation of PetroTal’s future net revenue attributable to the reserve categories noted below:

Proved                                                      $178.0 million

Proved + Probable                                  $251.1 million

Proved + Probable + Possible              $368.8 million

The future development costs are estimates of capital expenditures required in the future for PetroTal to convert the corresponding reserves to proved developed producing reserves.

About PetroTal

PetroTal is a publicly-traded, dual-listed (TSX-V: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's development asset is the Bretaña field in Peru's Block 95 where oil production was initiated in June 2018. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing and exploiting the Bretaña oil field.

Qualified Person Review

Manuel Pablo Zúñiga-Pflücker, President and CEO, has approved the technical disclosure in this regulatory announcement in his capacity as a qualified person under the AIM Rules. Mr. Zúñiga is a petroleum engineer with over 30 years of industry experience. Mr. Zúñiga holds a Bachelor of Science degree in Mechanical Engineering from the University of Maryland and a Masters of Science degree in Petroleum Engineering from Texas A&M University. Mr. Zúñiga is a member of the Society of Petroleum Engineers.

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T: (713) 609-9101

Mark Antelme / Henry Lerwill
Celicourt Communications (Financial PR)
petrotal@celicourt.uk
T: 44 (0) 207 520 9261

James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494

John Prior / Emily Morris / George Price
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

READER ADVISORIES 

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal’s business strategy, objectives, strength and focus; drilling and completion activities and the results of such activities; the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production and revenue; future development and growth prospects; and the timing of release of the AIF. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside,  prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in the Company’s annual information form for the year ended December 31, 2017 and management’s discussion and analysis for the three and nine months ended September 30, 2018 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: This press release contains oil and gas metrics, including “future development costs”, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies. Such metrics have been included herein to provide readers with additional measures to evaluate the Company’s performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods. Future development costs are calculated as the sum of development capital plus the change in future development costs for the period. 

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about PetroTal’s prospective results of operations, production, NPV-10, future net revenue, future development costs, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about PetroTal’s anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


PetroTal Announces Spud of Second Bretaña Oil Well

Calgary, Alberta and Houston, Texas – February 28, 2019—PetroTal Corp. (“PetroTal” or the “Company”) (TSX-V: TAL and AIM: PTAL) is pleased to announce that the BN 95-2-2-2XD oil development well (the “well”) commenced drilling operations on February 26, 2019.

The well is to be completed as a producer in the Vivian formation in the northern portion of the Bretaña structure, progressing the first phase of development of the Bretaña oilfield. The well will be directionally drilled to 3,040 meters total depth and will take up to 45 days to drill and complete. The well is the first in a program of three new producers designed to boost production to over 5,000 barrels of oil per day by mid-year 2019.

In addition to the primary objective of completing the well as an oil producer in the Vivian Formation, the drilling plan includes a deeper exploration section to test a secondary objective in the underlying Chonta formation. The Chonta formation has been a secondary producer of oil in the fields north of Bretaña.

Subsequent to the evaluation of the Chonta formation, the well will be completed as a vertical producer in the Vivian formation and later sidetracked as a horizontal producer when appropriate. This will also allow us to compare this well’s performance with the existing horizontal producer and the two remaining horizontal completions to be drilled in 2019.

Manolo Zuniga, President and Chief Executive Officer, commented:

“Drilling the second oil producer at the Bretaña oil field is an important step forward as the field development gathers momentum. The main focus of the drilling campaign is the Vivian formation, which has a gross thickness of approximately 300 feet with 100 feet of oil column at the crest of the structure. The production and pressure data from the initial vertical completion, complemented with the follow up two horizontal oil wells planned for the field in 2019, will aid Netherland Sewell & Associates, Inc., our independent reserves evaluators, to properly determine the size of the oil pool and potential recovery factor. While the Chonta formation is a deeper pool exploration target, any commercial discovery there will be impactful to the Company. The Chonta formation has produced commercial quantities of light oil from fields to the north of Bretaña, and a discovery would add synergistic reserves to the Bretaña field.”

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T: (713) 609-9101

Mark Antelme / Henry Lerwill
Celicourt Communications (Financial PR)
petrotal@celicourt.uk
T: 44 (0) 207 520 9261

James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494

John Prior / Emily Morris / George Price
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal’s business strategy, objectives, strength and focus; drilling and completion activities and the results of such activities; the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production and revenue; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in the Company’s annual information form for the year ended December 31, 2017 and management’s discussion and analysis for the three and nine months ended September 30, 2018 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: Estimates of production included in this press release are based upon an independent assessment completed by Netherland Sewell & Associates, Inc., a qualified independent reserves evaluator as defined in Canadian Securities Administrators’ National Instrument 51 101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), with an effective date of June 30, 2018 and prepared in accordance with the Canadian Oil and Gas Evaluation Handbook and the standards established by NI 51-101.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about PetroTal’s prospective results of operations, production, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about PetroTal’s anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


PetroTal Announces 2019 Capital Budget and Provides Operations Update

Calgary, Alberta and Houston, TexasFebruary 13, 2019—PetroTal Corp. (“PetroTal or the “Company”) (TSX-V: TAL and AIM: PTAL) is pleased to announce its capital budget for 2019 and provide an operations update. All amounts in this release are quoted in U.S. Dollars.

2019 Capital Budget – Increasing Bretaña Field Production

  • Investment aimed at increasing production to approximately 5,000 barrels of oil per day (“BOPD”) in mid-2019
  • Drilling campaign to include targeting three new oil producing wells
  • Drilling rig mobilized to Bretaña with the first well expected to spud in February 2019
  • Second phase of facilities to further increase oil production capacity to be installed in September/October 2019

Operational Highlights

  • Ongoing commissioning of oil production facilities throughout Q4 2018 as expected
  • Production from first producer stabilized at approximately 1,100 BOPD with over 200,000 barrels of crude oil produced to date
  • Independent evaluation of oil sample demonstrates lighter 19.4 degree API oil and lower oil viscosity

Capital Budget Expenditure

The Board of Directors has approved PetroTal’s capital budget for 2019, with key spending at Block 95 as follows:

  • Drilling of three wells expected to produce oil at an average cost of $12.1 million each
  • Additional processing facilities to be installed in Q3 2019, with an expected total spend in 2019 to approximate $16.0 million, increasing capacity to 10,000 BOPD
  • One water disposal well for approximately $7.0 million
  • Abandonment costs of approximately $2.0 million associated with legacy drilling site approximately 4.5 miles south of the Bretaña drill and production pad

The Company does not intend to spend material amounts of capital in Block 107 as the primary effort there is to secure a joint interest partner, with assistance from GMP FirstEnergy in London.

Manuel Zuniga, President and Chief Executive Officer, commented:

“This capital budget is expected to allow the Company to ramp up production to approximately 5,000 BOPD in mid-2019, in line with expectations.  We have negotiated excellent terms with our rig contractor and other service providers, giving the Company additional operational flexibility as we go into this three well drilling program.

With an expected total of four wells online by the end of 2019, PetroTal will have reached an important inflection point in the development of the Bretaña Field. This will provide the momentum to further increase production to our target of over 10,000 BOPD in 2020.  We continue to monitor commodity prices and retain the flexibility to adjust our budget if required. 

Overall, 2019 is set to be an exciting year for PetroTal and its shareholders. We enter the year with a net liquidity position of approximately $22.0 million, and with the cash flow being generated from our operations, we are well placed for the year ahead.”

Operations Update

As stated above, the well the Company inherited from the previous operator was placed on production in mid-2018 and has accumulated over 200,000 barrels of crude oil production to date.  Current rates, following expected declines, approximate 1,100 BOPD.  Total production and sales in the fourth quarter of 2018, while the well was under Long Term Test, was 106,500 and 110,285 barrels of oil, respectively.  At the request of the local refinery, a second oil sample since acquisition was sent to Bureau Veritas, an international certification agency, for evaluation with the results showing the same 19.4 degree API, an improvement over the 18.5 degree API estimated at acquisition in December 2017, and also lower oil viscosity.

The next expected Bretaña oil producer, which will be the first oil well drilled by the Company, is expected to spud later this month.  The rig and accompanying equipment have been mobilized to the Bretaña oil field and is currently being rigged up.  The well is expected to be online in late March 2019

PetroTal has engaged GMP FirstEnergy’s team in London to assist in the farm-out of Block 107.  Significant interest has been shown in the asset and the Company’s intention is to sign a joint-interest partner in mid-2019 and to begin drilling the Osheki prospect in 2020.  More information on the Osheki prospect can be found in the Company’s December 2018 AIM Admission Document, which is
available on the Company’s website at www.petrotal-corp.com.

ABOUT PETROTAL

PetroTal is a publicly-traded, dual-listed (TSX-V: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal’s development asset is the Bretaña field in Peru’s Block 95 where oil production was initiated in June 2018. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company’s management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing and exploiting the Bretaña oil field.

For further information, please contact:

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@Petrotal-Corp.com
T: (713) 609-9101

Mark Antelme / Henry Lerwill
Celicourt Communications (Financial PR)
petrotal@celicourt.uk
T: 44 (0) 207 520 9261

James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494

John Prior / Emily Morris / George Price
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

 

READER ADVISORIES 

FORWARD-LOOKING STATEMENTS: This press release may contain certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal’s business strategy, objectives, strength and focus; rig mobilization, drilling, water and other activities and the anticipated costs and results of such activities the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production and revenue; drilling plans including the timing of drilling; oil production levels, including average production, exit production in 2019 and estimated ultimate recovery; decline rates; the 2019 drilling program and capital budget; securing a joint partner in respect of the development of Block 107; arrangements with rig contractor and other service providers; future development and growth prospects; and shareholder returns. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, "expect", “plan”, “estimate”, “potential”, “will”, “should”, “continue”, “may”, “objective” and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside,  prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in the Company’s annual information form for the year ended December 31, 2017 and management’s discussion and analysis for the three and nine months ended September 30, 2018 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: Estimates of production and cost of production included in this press release are based upon an independent assessment completed by Netherland Sewell & Associates, Inc., a qualified independent reserves evaluator as defined in Canadian Securities Administrators’ National Instrument 51‑101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), with an effective date of June 30, 2018 and prepared in accordance with the Canadian Oil and Gas Evaluation Handbook and the standards established by NI 51-101.

This press release contains metrics commonly used in the oil and natural gas industry. These terms have been calculated by management and do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare PetroTal’s operations over time. All oil and gas disclosure contained in this press release complies with the requirements of NI 51-101.

References in this press release to production test rates, initial test production rates, and other short-term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the Company cautions that the test results should be considered to be preliminary. 

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about PetroTal’s prospective results of operations, production, operating costs and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about PetroTal’s anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.