PetroTal Announces Completion of US$18 million Equity Placing and Appointment of Broker

Financial and Operations Update

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - June 18, 2020) -  PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that its £14.1 million placing, as announced on June 12, 2020 ("Placing"), has now been completed and trading on AIM in the 141,203,891 new Common Shares, issued pursuant to the Placing ("Placing Shares") will commence this morning. All monetary amounts in this release are in United States dollars, unless otherwise indicated.

Financial and Operational Update

Further to the announcement of June 12, 2020 (the "Announcement") concerning the three year arrangement with PETROPERU S.A. ("Petroperu") the Company provides a further update on the current financial and operational status of the Company.

Contingent liability

Petroperu and the Company have agreed to structure the contingent liability due to Petroperu under the Bretana field oil sales contract ("Oil Sales Contract") and oil swap contracts with Petroperu (together, the "Contracts") into a liability to Petroperu to be paid by PetroTal over a three year period.

At May 31, 2020, approximately 2.1 million barrels ("mmbbls") of oil produced by PetroTal and sold to PetroPeru under the Contracts were either in the pipeline or storage tanks.

The amount of this contingent liability to Petroperu will be definitively determined when the security arrangements for PetroTal's obligations are finalized, expected to be within the next 30 days. Based on current Brent oil prices, the liability is expected to be approximately $26 million, as determined by the difference between the current Brent oil price and the previously booked sales prices for the 2.1 mmbbls that PetroTal has sold to Petroperu up to May 31, 2020. PetroTal will be required to make equal monthly payments, for 36 months, to Petroperu based on the amount of the liability so determined.

The above-mentioned liability could be adjusted as PetroTal benefits from the higher forecast oil prices in the second half of 2020 and into 2021, when the underlying barrels are physically sold by Petroperu. The eventual sale by Petroperu of PetroTal's oil at currently forecasted Brent prices would see the liability drop by $7 million to approximately $19 million. A recent Platt's article showcases this possibility, when it reported that Petroperu has finalized arrangements to sell to BP 420,000 barrels of Bretana oil on July 10, 2020, based on the immediately prevailing 10-day average Brent price, less a quality differential of approximately 3.5%. The liability adjustment is further showcased by the fact that the remaining oil is not expected to be sold by Petroperu until October 2020 and into early 2021, when we expect higher Brent oil prices.

Sales terms

Under the original terms of the Oil Sales Contract, invoices submitted to Petroperu for oil sales were payable 180 days after submission which, at the time, reflected the time estimated for the oil to transit the Northern Oil Pipeline ("ONP") and be sold by Petroperu. The amendment to the invoice terms to 240 days reflects an updated estimate of this transit time.

To support the Company's liquidity, all prior invoices submitted by PetroTal under the Oil Sales Contract have been factored, at a nominal cost, through local Peruvian banks utilizing a facility arranged by Petroperu. As per the terms of a typical factoring facility, at the end of the 240 day period Petroperu will pay the due amount to the local Peruvian banks. PetroTal will continue to factor future invoices on the same terms. The extension of the invoice terms from 180 to 240 days is not expected to have any impact on the timing of PetroTal's cash flows from oil sales.

Trade Payables

To ensure all suppliers were fully aligned with the Company's development strategy, the Company insisted they provide attractive payment terms for their services. This has allowed the Company to execute on time and budget from day one and expects to continue doing so.

The Company has accounts payable and accrued liabilities of approximately $49 million, excluding the contingent liability to Petroperu. Of this amount, $33.7 million represents accounts payable, with 47% of the amount not due until subsequent quarters, up to Q2 2021. Accruals for various projects underway total $10.8 million with expected due dates ranging from Q3 2020 to Q2 2021. The balance of $4.7 million is value-added tax ("VAT") that will be offset against VAT collected on subsequent oil sales. Most of the amounts owed relate to the Company's drilling program in late 2019 and early 2020, along with construction of the central processing facilities at Bretana.

The current amount owing to our suppliers is approximately $18 million. In coordination with our suppliers, $6.6 million of this amount is expected to be paid by the end of June to facilitate the re-opening of the Bretana oil field in early July 2020.

Cash

As referred to in the Announcement, taking into account the collection of oil sales invoices related to oil sales in March, April and May, 2020 in the next few weeks and the net proceeds of the Placing, PetroTal will have cash of approximately $28 million; leaving the business well funded to continue the development of the Bretana oil field, albeit at a slower pace. The credit facility mentioned in the Announcement will further position the Company to complete Bretana's development and secure the required hedging strategy.

Bretana oil field

While the Bretana oil field remains shut in, operating costs at the field are minimal at approximately $0.1 million per month. The Company is confident in its ability to ramp up activity at Bretana, ahead of the planned reopening in July, to ensure the oil field will return to normal operating status.

Bretana production and development

At the time of the shut in of the Bretana oil field in early May, the Company was producing approximately 11,433 barrels of oil per day ("bopd") from seven wells. Comparatively, in Q1 2020, PetroTal produced 9,688 bopd, up 25% from 7,767 bopd in Q4 2019. From April 1, 2020 to May 3, 2020, when the oilfield was shut in due to the Peruvian government Covid-19 health directive, average production was 11,465 bopd. Due to the field shut down, average first half production will be 6,934 bopd.

When the field reopens, the Company expects that the production level attained at the time of field shut down will be achieved, following a short period of production evaluation.

Subject to the Brent oil price remaining at or above approximately $40 per barrel, the Company plans to drill another production well in Q4 2020 and anticipates average production of 9,100 bopd for 2020, inclusive of 11,190 during the second half of 2020.

Other capital projects, including further expansion of the central processing facilities and drilling an additional water disposal well, are currently deferred.

Appointment of Broker

The Company is pleased to announce the appointment of Auctus Advisors LLP as Joint Broker with immediate effect. Stifel Nicolaus Europe Limited remains as Joint Broker and Strand Hanson as Nominated & Financial Adviser.

Total voting rights

Following admission of the Placing Shares to trading on AIM, the Company will have 814,555,701 Common Shares in issue and there are no shares held in treasury. For the purposes of the Disclosure Guidance and Transparency Rules, the total number of voting rights in the Company is calculated as the number of outstanding Common Shares, less the Common Shares not able to be voted on due to restrictions applicable to certain holders which results in a total voting rights figure of 812,822,411 Common Shares. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru. 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 the Bretaña oil field.

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

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

Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : +44 (0) 208 434 2643

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

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

Auctus Advisors LLP (Joint Broker)
Jonathan Wright / Rupert Holdsworth Hunt / Harry Baker
T: +44 (0) 7711 627449

READER ADVISORIES
FORWARD‐LOOKING STATEMENTS: This press release contains 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; the Company's ability to resume operations in accordance with developing public health efforts to contain COVID-19; additional cost reductions; and liability under the Swap Contract and Sales Contract and the settlement of such liability. 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. 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 volatility, price differentials and the actual prices received for products, 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. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2018 and management's discussion and analysis for the three and nine months ended September 30, 2019 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 temporary shut down of operations, the anticipated resumption of operations, storage capacity, cost reductions, pipeline transportation arrangements, liability under the Swap Contract and Sales Contract 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 approved by management as of the date of this press release and was included 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.

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.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/58101


PetroTal Announces 2019 Year-End Financial and Operating Results

Record levels of oil production, cash flow and income

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - June 15, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce its financial and operating results for the year and the three months ("Q4") ended December 31, 2019.

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, 2019, 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, 2019. All amounts herein are in United States dollars ("USD") unless otherwise stated.

2019 HIGHLIGHTS

The Company reached several key operational and financial achievements during 2019 as described below:

Q4 Highlights

  • Drilled and completed the Company's first horizontal well (4H), having a 500 meter lateral and utilizing autonomous inflow control device ("AICD") valves to maximize oil production;
  • Drilled and completed the 5H well, the longest horizontal well drilled in Peru. The well reached the target Vivian formation at a vertical depth of 2,696 meters and then with an 863 meter horizontal section inside the main productive oil reservoir;
  •  Commissioning of the new $31.6 million Central Production Facility ("CPF") commenced on December 22, 2019 with the successful hydrostatic test of the new 20,000 barrel oil storage tank;
  • Earned net income of $18.2 million ($0.03 per share basic) compared to a net loss of $2.2 million in Q4 2018;
  • Higher operating net back of $28.6 million compared to $2.3 million in Q4 2018;
  • For Q4 2019 the Company recognized funds flow generated of $22.2 million, as compared to utilization of negative $1.9 million in Q4 2018;
  • Achieved a record quarterly oil production of 7,767 bopd, an increase of 670% over Q4 2018 (1,158 bopd), and an increase of 63% over Q3 2019 (4,760 bopd);
  • Q4 2019 sales volumes averaged 9,509 bopd compared to 1,199 bopd in Q4 2018; and,
  • Capital expenditures were $26.9 million in Q4 2019 compared to $4.4 million in Q4 2018.

2019 Operational Highlights

  • At December 31, 2019, six producing wells and one water disposal were operating, inclusive of the initial water disposal that was converted to an oil producer;
  • The Company invested $88.4 million to drill five producing oil wells, a water disposal well and build production facilities, nearly a three fold increase from capital expenditures of $23.2 million in 2018;
  • The Company achieved an exit rate production of 13,300 bopd at the end of 2019 with the Q4 average being 7,767 bopd. PetroTal produced a total of 1.5 million barrels of oil in 2019, representing average oil production of 4,131 bopd, an increase of 431% from the average production of 958 bopd realized in 2018;
  • NSAI Report shows increases in all reserve categories:
  • Proved ("1P") reserves of 21.5 million barrels ("mmbbl"), an increase of 20% from the 17.9 mmbbl recorded at the end of 2018;
  • Proved plus Probable ("2P") reserves of 47.7 mmbbl, an increase of 21% from the 39.4 mmbbl recorded at the end of 2018; and,
  • Proved plus Probable and Possible ("3P") reserves of 84.8 mmbbl, an increase of 8% from the 78.7 mmbbl recorded at the end of 2018;
  •  Net Present Value (before tax, discounted at 10%) ("NPV-10") represents $434 million ($20.19/bbl) for 1P reserves, $1.1 billion ($23.02/bbl) for 2P reserves and $1.9 billion ($22.11/bbl) for 3P reserves; and,
  • Original oil in place ("OOIP") estimates for each category of reserves also increased, with the 2P estimate increasing from 329 mmbbl to 364 mmbbl.

2019 Financial Highlights

  • Generated revenue of $77 million ($52.32/bbl) compared to $10 million ($59.10/bbl) in 2018;
  • Royalties to the Peruvian government were $3.4 million (4% of revenue) during 2019 compared to $0.5 million (5% of revenue) for 2018;
  • Generated funds from operations of $51.9 million compared to $30 thousand in 2018, as a result of the significant increase in revenue generation;
  • Operating and transportation costs, were $31.9 million ($21.68/bbl) for 2019 compared to $4.9 million ($27.60/bbl) for 2018, an improvement of 22% on a per barrel basis;
  • Net operating income (netback) in 2019 was $41.4 million ($28.09/bbl) compared to $5.1 million ($28.72/bbl) in 2018;
  • Cash flow generated was $29.7 million compared to negative $3.4 million in 2018. Cash flow represents netback inclusive of G&A costs, realized gain (losses) on commodity contracts and all other cash transactions; and,
  • At December 31, 2019, the Company had cash of $21.1 million, compared to $26.3 million at the end of 2018.

2019 Other Highlights

  •  On November 4, 2019, the Company announced the addition of Mr. Douglas Urch, as Executive Vice President and Chief Financial Officer of the Company;
  • On December 12, 2019, the Company's board of directors declared its inaugural dividend of $0.9 million to shareholders of record on December 20, 2019; and,
  • On December 19, 2019, Ms. Eleanor Barker and Dr. Roger Tucker were appointed as Independent Non-Executive Directors.

The following table summarizes key financial and operating highlights associated with the Company's performance for the years ended December 31, 2019 and 2018. See the Financial Statements, MD&A and AIF for further details.

December 31 December 31
Results at a glance 2019 2018
Financial
Crude oil revenues 77,024 10,487
Royalties (3,394 ) (493 )
Commodity price derivatives loss 367 -
Net operating income 41,719 5,096
Net income (loss) 20,152 (4,621 )
Basic and diluted (US$/share) 0.03 (0.01 )
Funds generated from operations 51,061 30
Capital expenditures 88,763 23,207
Operating    
Average production (bopd) 4,131 958
Average sales (bopd) 4,033 964
Average Brent oil price (US$/barrel) 64.31 63.84
Average realized price (US$/barrel) 52.32 59.10
Netback (US$/barrel) 28.09 28.72
Cash flow 29,692 (3,362 )
Balance sheet    
Cash 21,101 26,259
Working Capital (11,762 ) 26,053
Total assets 194,181 96,097
Current liabilities 59,286 9,582
Equity 121,057 77,527

 

Q4-19
$/bbl
FY 2019
$/bbl
Q4-18
$/bbl
FY 2018
$/bbl
SALES:   Average Production (bopd) 7,767 4,131 1,158 958
Bbls Sold 874,802 1,472,042 110,287 177,465
Average Brent price ($/bbl) 63.26 64.31 63.84 63.84
Quarterly Difference Variation price (%) -17.0% -18.6% -12.1% -7.4%
Average sold (bopd) 9,509 4,033 1,199 964
Oil revenue $52.49 $45,916 $52.32 $77,024 $56.09 $6,186 $59.10 $10,487
Less:Royalties $2.07 $1,813 $2.31 $3,394 $3.04 $336 $2.78 $493
Operating expense $6.91 $6,047 $9.73 $14,319 $22.82 $2,516 $19.73 $3,501
Transportation expense $11.09 $9,702 $11.95 $17,592 $9.32 $1,028 $7.87 $1,397
Derivative loss (income) -$0.24 ($213) $0.25 $367 $0.00 $0 $0.00 $0
NET OPERATING INCOME $32.65 $28,566 $28.09 $41,352 $20.91 $2,306 $28.72 $5,096
Netback as % of Revenue 62.2% 53.7% 37.3% 48.6%
G & A $6.91 $6,048 $7.33 $10,789 $36.95 $4,075 $44.18 $7,840
Accretion expense $0.14 $126 $0.28 $416 $0.81 $89 $3.48 $618
Finance expense $0.27 $238 $0.31 $455 $0.00 $0 $0.00 $0
CASH FLOW $22,154 $29,692 ($1,858) ($3,362)
Deferred income taxes $0.05 $45 $0.06 $86 -$7.18 ($792) -$4.46 ($792)
Depletion and depreciation $4.30 $3,760 $5.79 $8,528 $7.39 $815 $7.91 $1,404
Impairment and foreign exchange $0.14 $126 $0.63 $927 $2.75 $303 $3.65 $647
Net Income (loss) $18,223 $20,152 ($2,184) ($4,621)

 

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:

"As a Company, we achieved a great deal in 2019. We set ourselves a number of ambitious targets at the beginning of the year and were able to meet or exceed all of them. We were also able to generate significant value for our shareholders by increasing our production by 431% year-on-year. Our ability to deliver an exit rate of 13,300 bopd for 2019 is a testament to the expertise and hard work of PetroTal's workforce during the period."

Whilst we are currently focusing on balance sheet strength and liquidity, in light of the difficult trading environment, we remain well placed to deliver value for all our stakeholders. In closing, I would like to thank PetroTal's shareholders, directors, employees and contractors for their continued support. We look forward to announcing further developments as the year progresses."

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: 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 flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018 and in early 2020, became the second largest crude oil producer in Peru. 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 the Bretaña oil field.

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

Manuel Pablo Zuniga-Pflucker
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101

Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 208 434 2643

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

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains 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; construction of production facilities; 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 Company's ability to resume operations in accordance with developing public health efforts to contain COVID-19. 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 volatility, price differentials and the actual prices received for products, 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. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the 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, temporary shut down of operations, the anticipated resumption of operations, storage capacity, cost reductions 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 approved by management as of the date of this press release and was included 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.

PRESENTATION OF OIL AND GAS INFORMATION: The reserves information herein sets forth PetroTal's reserves as at December 31, 2019, as presented in the independent reserves report prepared by NSAI, 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 announcement and the press release dated February 18, 2020, more detailed information is included in the AIF. This press release contains metrics commonly used in the oil and natural gas industry, such as operating netbacks (calculated on a per unit basis as oil revenues less royalties and barging, pipeline and lifting costs). 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. The term original oil in place (OOIP) is equivalent to total petroleum initially in place ("TPIIP"). TPIIP, as defined in the Canadian Oil and Gas Evaluation Handbook, is that quantity of petroleum that is estimated to exist in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. A portion of the TPIIP is considered undiscovered and there is no certainty that any portion of such undiscovered resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of such undiscovered resources. With respect to the portion of the TPIIP that is considered discovered resources, there is no certainty that it will be commercially viable to produce any portion of such discovered resources. A significant portion of the estimated volumes of TPIIP will never be recovered.

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.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/57939


PetroTal Announces Proposed Placing to Raise £14.1 Million

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE: (A) A PROSPECTUS OR OFFERING MEMORANDUM; (B) AN ADMISSION DOCUMENT PREPARED IN ACCORDANCE WITH THE AIM RULES; OR (C) AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF PETROTAL CORP. IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (REGULATION 596/2014/EU). UPON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

CAPITALISED TERMS ARE AS DEFINED AT THE END OF THIS ANNOUNCEMENT.

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - June 12, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company"), the Peruvian focused E&P company, is pleased to announce a placing of 141.2 million Placing Units at a price of 10p per unit to raise gross proceeds of £14.1 million (approximately US$18 million). Each Placing Unit will be comprised of one new Common Share and one half of one Warrant.

Placing highlights

  • The Placing was significantly oversubscribed.
  • The Company intends to use the net proceeds of the Placing for ongoing development of the Bretana oilfield and to enhance working capital. In particular, the net proceeds will be deployed by the Company in connection with the proposed reopening of the Bretana oilfield which is anticipated to occur in July.
  • With a stronger balance sheet, PetroTal will be able to finalize a credit facility for day-to-day operations and structure derivatives to minimize the impact of future oil price fluctuations.
  • Auctus Advisors is acting as sole bookrunner on the Placing. Strand Hanson is acting as Nominated and Financial Adviser to the Company.

Background to and reasons for the Placing

As recently announced, PetroTal has entered into a financial arrangement with PETROPERU S.A. ("Petroperu") relating to the contingent liability due to Petroperu which will see the entire contingent liability resolved on a one-time basis and see the obligation paid evenly over a three year period, at an annual interest rate of 6.5%.

Meanwhile, however, the Bretana oil field remains shut down awaiting opening of the Northern Oil Pipeline ("ONP") by Petroperu. PetroTal is coordinating with Petroperu to reopen the Bretana oil field in July 2020, with the expectation that the ONP restarts pumping oil very shortly thereafter. Both PetroTal and Petroperu will fully abide by the health directives issued by the Peruvian government in order to safely restart operations during the ongoing Covid-19 pandemic.

In this period of uncertainty in the context of the Covid-19 pandemic, the Directors consider that strengthening its balance sheet with additional working capital is a prudent action.

Details of the Placing

The Company will raise gross proceeds of £14.1 million pursuant to the Placing. The Placing will result in the issue of a total of 141,203,891 new Common Shares and 70,601,945 Warrants. The Placing Shares will represent approximately 17.3 per cent. of the Enlarged Share Capital.

The Placing Price represents a discount of approximately 11 per cent. to the closing mid-market price per existing Common Share of 11.25 pence on June 11, 2020, being the last practicable trading day prior to release of this announcement.

The Placing Shares will, when issued, be subject to the Articles and By Laws, be credited as fully paid and non-assessable and rank equally in all respects with each other and with the Existing Common Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Common Shares after the date of issue of the Placing Shares.

Warrants

Each Placing Unit will comprise one Placing Share and one half of one Warrant.

A whole Warrant (comprised of two half Warrants) will have an exercise price of 16p per Common Share, which equates to a 60% premium above the Placing Price, and will be capable of being exercised at any time from and after the date of Admission until the third anniversary of Admission. The Warrants can only be exercised for cash.

The Warrant exercise price and the number of shares issuable upon exercise of the Warrants will be adjusted in certain circumstances, including if the Company effects a subdivision or consolidation of its Common Shares, declares a dividend or distribution, or there is a reorganisation of its Common Shares.

Related Party Transaction

As at June 11, 2020, Meridian Capital International Fund ("Meridian") held approximately 11.8 per cent. of the Existing Share Capital and, as such, is considered to be a related party of the Company as defined by the AIM Rules.

Meridian is participating in the Placing for an amount of £7.5 million and this participation constitutes a related party transaction pursuant to AIM Rule 13 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Following completion of the Placing, Meridian and its linked parties will hold 19.42 per cent. of the Enlarged Share Capital.

The Directors, other than Mr. Gavin Wilson, who represents Meridian on the Board, having consulted with the Company's nominated adviser, Strand Hanson Limited, consider that the terms of the participation by Meridian are fair and reasonable insofar as the shareholders of the Company are concerned. In its consideration and approval of the Placing, the Directors determined that it was exempt from the formal valuation and minority approval requirements of MI 61-101 on the basis that the fair market value of the Placing to Meridian did not exceed 25% of the market capitalization of PetroTal, in accordance with Sections 5.5 and 5.7 of MI 61-101.

The terms of the Warrants issued to Meridian will provide that, subject to certain exceptions, Meridian shall not exercise any Warrants where such exercise would result in Merdian's beneficial ownership, direction or control of the issued and outstanding Common Shares at the time of exercise exceeding 19.99%.

Placing Agreement

The Company and Auctus have entered into the Placing Agreement pursuant to which (a) the Company has appointed Auctus as the Company's agent to use its reasonable endeavours to procure subscribers for the Placing Units at the Placing Price. The Placing is not underwritten. The Company has agreed to pay Auctus certain commissions in connection with the Placing.

The Placing is conditional on, amongst other things, Admission of the Placing Shares occurring on or before 8.00 a.m. on June 18, 2020 (or such later time and/or date as the Company and Auctus may agree, being not later than 8.00 a.m. on June 26, 2020).

The Placing Agreement contains certain customary warranties given by the Company concerning the accuracy of the information in this Announcement as well as other matters relating to the Group and its business. The Placing Agreement is terminable by Auctus in certain circumstances prior to Admission, including for force majeure or in the event of a material adverse change to the business of the Company or the Group. The Company has also agreed to provide a market standard indemnity and undertakings to Auctus.

Admission

Application will be made to: (a) the London Stock Exchange for Admission of the Placing Shares to trading on AIM; and (b) the TSXV for listing of the Placing Shares for trading on the facilities of the TSXV.

It is expected that Admission will become effective at 8.00 a.m. on June 18, 2020 (or such later date as the Company and Auctus may agree, being not later than 8.00 a.m. on June 26, 2020) and that dealings in the Placing Shares will also commence at that time.

The Warrants will not be admitted to trading on AIM or listed for trading on the facilities of the TSXV.

Without prior written approval of the TSXV and compliance with all applicable Canadian securities laws, the Placing Shares, Warrants and Common Shares issuable on the exercise of Warrants may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of TSXV or otherwise in Canada or to or for the benefit of a Canadian resident until the date that is four months and a day after the date of issuance.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares and Warrants have not been, nor will they be, registered or qualified for distribution, as applicable under or offered in compliance with the securities laws of any state, province or territory of United States, Australia, New Zealand, Canada, Japan or South Africa. Accordingly, the Placing Units may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, New Zealand, Canada, Japan or South Africa or any other jurisdiction outside the United Kingdom.

Manolo Zuniga, President and Chief Executive Officer, commented:

"In light of the recent fall in global oil prices and the temporary shut in of the Bretana oil field, we have sought to preserve liquidity and are taking the opportunity to strengthen the Company's balance sheet via this fundraise.

The Placing and the arrangement announced with Petroperu today will give PetroTal greater financial strength and sufficient flexibility to prepare for the reopening of the Bretana field, which is expected to occur in July. Additionally, the Petroperu arrangement and support by the Peruvian government, demonstrates that Peru provides an excellent investment climate.

I would like to thank our investors for their continued support, as seen with the Placing being oversubscribed, and I look forward to keeping the market appraised on developments at Bretana over the coming months."

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: 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 flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest oil producer in Peru. 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 the Bretaña oil field.

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

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

Auctus Advisors LLP (Sole Bookrunner to the Placing)
Jonathan Wright / Rupert Holdsworth Hunt / Harry Baker
Tel: +44 (0) 7711 627449

Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T: 44 (0) 208 434 2643

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

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

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

FURTHER INFORMATION

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

Admission the admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules
AIM the market of that name operated by the London Stock Exchange
AIM Rules the AIM Rules for Companies published by the London Stock Exchange as they may be amended and replaced from time to time
Articles the articles of amalgamation of the Company (as amended from time to time)
Auctus or Auctus Advisors Auctus Advisors LLP, sole bookrunner to the Placing
By Laws the by-laws of the Company adopted on December 18, 2017 (as amended from time to time)
Common Shares common shares in the capital of the Company
Company or PetroTal PetroTal Corp., a public company incorporated under the laws of Alberta with corporate access number 2020869455 and whose registered office is at c/o Stikeman Elliott LLP Suite 4300, 888 3rd Street S.W., Calgary Alberta T2P 5C5
Directors the directors of the Company
Enlarged Share Capital together, the Existing Common Shares and the Placing Shares
Existing Common Shares the 673,351,810 Common Shares in issue at the date of this Announcement
London Stock Exchange London Stock Exchange plc
Meridian Meridian Capital International Fund
Petroperu PETROPERU S.A.
Placees those persons who subscribe for Placing Shares and/or acquire Sale Shares pursuant to the Placing
Placing the placing of the Placing Units at the Placing Price by Auctus as agent for and on behalf of the Company pursuant to the terms and conditions of the Placing Agreement
Placing Price 10 pence per Placing Unit
Placing Agreement the conditional placing agreement dated June 12, 2020 relating to the Placing and entered into between the Company and Auctus
Placing Shares the 141,203,891 new Common Shares to be issued to Placees pursuant to the Placing
Placing Unit One Placing Share and one half of one Placing Warrant to be subscribed for as a unit by the Placees at the Placing Price
Strand Hanson Strand Hanson Limited, the Company's Nominated and Financial Adviser
TSXV TSX Venture Exchange
United States or US the United States of America, its territories and possessions, any state of the United States and the District of Columbia and all other areas subject to its jurisdiction
£ or Sterling pounds sterling, the basic currency of the United Kingdom
US$ United States dollar, the legal currency of the United States
Warrants warrants to subscribe for new Common Shares

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains 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; the Company's ability to resume operations in accordance with developing public health efforts to contain COVID-19; the financial arrangement with Petroperu relating to certain contingent liabilities; and the Placing, including with respect to size, timing and use of proceeds. 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. 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 volatility, price differentials and the actual prices received for products, 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. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2018 and management's discussion and analysis for the nine months ended September 30, 2019 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 temporary shut down of operations, adequacy of financial resources during the shut down, the anticipated resumption of operations, the settlement of the contingent liability with Petroperu, working capital, balance sheet strength, the Placing 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 approved by management as of the date of this press release and was included 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.

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.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/57766


Proposed Placing to Raise £14.1 Million

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE: (A) A PROSPECTUS OR OFFERING MEMORANDUM; (B) AN ADMISSION DOCUMENT PREPARED IN ACCORDANCE WITH THE AIM RULES; OR (C) AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF PETROTAL CORP. IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (REGULATION 596/2014/EU). UPON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

CAPITALISED TERMS ARE AS DEFINED AT THE END OF THIS ANNOUNCEMENT.

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - June 12, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company"), the Peruvian focused E&P company, is pleased to announce a placing of 141.2 million Placing Units at a price of 10p per unit to raise gross proceeds of £14.1 million (approximately US$18 million). Each Placing Unit will be comprised of one new Common Share and one half of one Warrant.

Placing highlights

  • The Placing was significantly oversubscribed.
  • The Company intends to use the net proceeds of the Placing for ongoing development of the Bretana oilfield and to enhance working capital. In particular, the net proceeds will be deployed by the Company in connection with the proposed reopening of the Bretana oilfield which is anticipated to occur in July.
  • With a stronger balance sheet, PetroTal will be able to finalize a credit facility for day-to-day operations and structure derivatives to minimize the impact of future oil price fluctuations.
  • Auctus Advisors is acting as sole bookrunner on the Placing. Strand Hanson is acting as Nominated and Financial Adviser to the Company.

Background to and reasons for the Placing

As recently announced, PetroTal has entered into a financial arrangement with PETROPERU S.A. ("Petroperu") relating to the contingent liability due to Petroperu which will see the entire contingent liability resolved on a one-time basis and see the obligation paid evenly over a three year period, at an annual interest rate of 6.5%.

Meanwhile, however, the Bretana oil field remains shut down awaiting opening of the Northern Oil Pipeline ("ONP") by Petroperu. PetroTal is coordinating with Petroperu to reopen the Bretana oil field in July 2020, with the expectation that the ONP restarts pumping oil very shortly thereafter. Both PetroTal and Petroperu will fully abide by the health directives issued by the Peruvian government in order to safely restart operations during the ongoing Covid-19 pandemic.

In this period of uncertainty in the context of the Covid-19 pandemic, the Directors consider that strengthening its balance sheet with additional working capital is a prudent action.

Details of the Placing

The Company will raise gross proceeds of £14.1 million pursuant to the Placing. The Placing will result in the issue of a total of 141,203,891 new Common Shares and 70,601,945 Warrants. The Placing Shares will represent approximately 17.3 per cent. of the Enlarged Share Capital.

The Placing Price represents a discount of approximately 11 per cent. to the closing mid-market price per existing Common Share of 11.25 pence on June 11, 2020, being the last practicable trading day prior to release of this announcement.

The Placing Shares will, when issued, be subject to the Articles and By Laws, be credited as fully paid and non-assessable and rank equally in all respects with each other and with the Existing Common Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Common Shares after the date of issue of the Placing Shares.

Warrants

Each Placing Unit will comprise one Placing Share and one half of one Warrant.

A whole Warrant (comprised of two half Warrants) will have an exercise price of 16p per Common Share, which equates to a 60% premium above the Placing Price, and will be capable of being exercised at any time from and after the date of Admission until the third anniversary of Admission. The Warrants can only be exercised for cash.

The Warrant exercise price and the number of shares issuable upon exercise of the Warrants will be adjusted in certain circumstances, including if the Company effects a subdivision or consolidation of its Common Shares, declares a dividend or distribution, or there is a reorganisation of its Common Shares.

Related Party Transaction

As at June 11, 2020, Meridian Capital International Fund ("Meridian") held approximately 11.8 per cent. of the Existing Share Capital and, as such, is considered to be a related party of the Company as defined by the AIM Rules.

Meridian is participating in the Placing for an amount of £7.5 million and this participation constitutes a related party transaction pursuant to AIM Rule 13 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Following completion of the Placing, Meridian and its linked parties will hold 19.42 per cent. of the Enlarged Share Capital.

The Directors, other than Mr. Gavin Wilson, who represents Meridian on the Board, having consulted with the Company's nominated adviser, Strand Hanson Limited, consider that the terms of the participation by Meridian are fair and reasonable insofar as the shareholders of the Company are concerned. In its consideration and approval of the Placing, the Directors determined that it was exempt from the formal valuation and minority approval requirements of MI 61-101 on the basis that the fair market value of the Placing to Meridian did not exceed 25% of the market capitalization of PetroTal, in accordance with Sections 5.5 and 5.7 of MI 61-101.

The terms of the Warrants issued to Meridian will provide that, subject to certain exceptions, Meridian shall not exercise any Warrants where such exercise would result in Merdian's beneficial ownership, direction or control of the issued and outstanding Common Shares at the time of exercise exceeding 19.99%.

Placing Agreement

The Company and Auctus have entered into the Placing Agreement pursuant to which (a) the Company has appointed Auctus as the Company's agent to use its reasonable endeavours to procure subscribers for the Placing Units at the Placing Price. The Placing is not underwritten. The Company has agreed to pay Auctus certain commissions in connection with the Placing.

The Placing is conditional on, amongst other things, Admission of the Placing Shares occurring on or before 8.00 a.m. on June 18, 2020 (or such later time and/or date as the Company and Auctus may agree, being not later than 8.00 a.m. on June 26, 2020).

The Placing Agreement contains certain customary warranties given by the Company concerning the accuracy of the information in this Announcement as well as other matters relating to the Group and its business. The Placing Agreement is terminable by Auctus in certain circumstances prior to Admission, including for force majeure or in the event of a material adverse change to the business of the Company or the Group. The Company has also agreed to provide a market standard indemnity and undertakings to Auctus.

Admission

Application will be made to: (a) the London Stock Exchange for Admission of the Placing Shares to trading on AIM; and (b) the TSXV for listing of the Placing Shares for trading on the facilities of the TSXV.

It is expected that Admission will become effective at 8.00 a.m. on June 18, 2020 (or such later date as the Company and Auctus may agree, being not later than 8.00 a.m. on June 26, 2020) and that dealings in the Placing Shares will also commence at that time.

The Warrants will not be admitted to trading on AIM or listed for trading on the facilities of the TSXV.

Without prior written approval of the TSXV and compliance with all applicable Canadian securities laws, the Placing Shares, Warrants and Common Shares issuable on the exercise of Warrants may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of TSXV or otherwise in Canada or to or for the benefit of a Canadian resident until the date that is four months and a day after the date of issuance.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares and Warrants have not been, nor will they be, registered or qualified for distribution, as applicable under or offered in compliance with the securities laws of any state, province or territory of United States, Australia, New Zealand, Canada, Japan or South Africa. Accordingly, the Placing Units may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, New Zealand, Canada, Japan or South Africa or any other jurisdiction outside the United Kingdom.

Manolo Zuniga, President and Chief Executive Officer, commented:

"In light of the recent fall in global oil prices and the temporary shut in of the Bretana oil field, we have sought to preserve liquidity and are taking the opportunity to strengthen the Company's balance sheet via this fundraise.

The Placing and the arrangement announced with Petroperu today will give PetroTal greater financial strength and sufficient flexibility to prepare for the reopening of the Bretana field, which is expected to occur in July. Additionally, the Petroperu arrangement and support by the Peruvian government, demonstrates that Peru provides an excellent investment climate.

I would like to thank our investors for their continued support, as seen with the Placing being oversubscribed, and I look forward to keeping the market appraised on developments at Bretana over the coming months."

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: 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 flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest oil producer in Peru. 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 the Bretaña oil field.

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

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

Auctus Advisors LLP (Sole Bookrunner to the Placing)
Jonathan Wright / Rupert Holdsworth Hunt / Harry Baker
Tel: +44 (0) 7711 627449

Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T: 44 (0) 208 434 2643

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

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

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

FURTHER INFORMATION

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

Admission the admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules
AIM the market of that name operated by the London Stock Exchange
AIM Rules the AIM Rules for Companies published by the London Stock Exchange as they may be amended and replaced from time to time
Articles the articles of amalgamation of the Company (as amended from time to time)
Auctus or Auctus Advisors Auctus Advisors LLP, sole bookrunner to the Placing
By Laws the by-laws of the Company adopted on December 18, 2017 (as amended from time to time)
Common Shares common shares in the capital of the Company
Company or PetroTal PetroTal Corp., a public company incorporated under the laws of Alberta with corporate access number 2020869455 and whose registered office is at c/o Stikeman Elliott LLP Suite 4300, 888 3rd Street S.W., Calgary Alberta T2P 5C5
Directors the directors of the Company
Enlarged Share Capital together, the Existing Common Shares and the Placing Shares
Existing Common Shares the 673,351,810 Common Shares in issue at the date of this Announcement
London Stock Exchange London Stock Exchange plc
Meridian Meridian Capital International Fund
Petroperu PETROPERU S.A.
Placees those persons who subscribe for Placing Shares and/or acquire Sale Shares pursuant to the Placing
Placing the placing of the Placing Units at the Placing Price by Auctus as agent for and on behalf of the Company pursuant to the terms and conditions of the Placing Agreement
Placing Price 10 pence per Placing Unit
Placing Agreement the conditional placing agreement dated June 12, 2020 relating to the Placing and entered into between the Company and Auctus
Placing Shares the 141,203,891 new Common Shares to be issued to Placees pursuant to the Placing
Placing Unit One Placing Share and one half of one Placing Warrant to be subscribed for as a unit by the Placees at the Placing Price
Strand Hanson Strand Hanson Limited, the Company's Nominated and Financial Adviser
TSXV TSX Venture Exchange
United States or US the United States of America, its territories and possessions, any state of the United States and the District of Columbia and all other areas subject to its jurisdiction
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READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains 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; the Company's ability to resume operations in accordance with developing public health efforts to contain COVID-19; the financial arrangement with Petroperu relating to certain contingent liabilities; and the Placing, including with respect to size, timing and use of proceeds. 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. 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 volatility, price differentials and the actual prices received for products, 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. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2018 and management's discussion and analysis for the nine months ended September 30, 2019 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 temporary shut down of operations, adequacy of financial resources during the shut down, the anticipated resumption of operations, the settlement of the contingent liability with Petroperu, working capital, balance sheet strength, the Placing 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 approved by management as of the date of this press release and was included 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.

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.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/57766


PetroTal Announces Three-Year Arrangement with Petroperu

Oil Sales Contract terms enhanced and extended to three years

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - June 12, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that it has entered into an arrangement with PETROPERU S.A. (“Petroperu”).  

The arrangement will result in the Company’s liability to Petroperu in relation to the recent oil price movements being payable over a three year period, rather than at the point of sale of the oil.  The arrangement has been structured to minimize the impact of the recent oil price decline on the Company’s cash flows and forward plans, whilst allowing the Company to benefit from any future increase in oil prices when physical oil sales occur.  As announced on May 7, 2020, the liability relates to the oil price differential between the date that oil enters the Northern Oil Pipeline (“ONP”) and the current oil price (and, ultimately, the physical oil sales price).

Additionally, PetroTal announces an extension of the oil sales contract with Petroperu dated December 23, 2019 (“Oil Sales Contract”) from one year to three years on enhanced terms.  All monetary amounts in this release are in United States dollars.

Highlights

  • The contingent liability announced on May 7, 2020 has been structured into a three-year payment arrangement (“Arrangement”) with Petroperu at an interest rate of 6.5% ;
  • The contingent liability at the end of May is estimated to be approximately $43 million;
  • The Arrangement allows PetroTal to settle the obligations to Petroperu now while still allowing the Company to benefit from higher oil prices forecasted by the Brent forward strip pricing curve when the physical oil sales occur;
  • PetroTal and Petroperu (the “Parties”) have agreed to extend the one-year Oil Sales Contract to three years upon expiry of the current term on December 23, 2020;
  • The Parties will establish a framework to ensure that future oil sales under the Oil Sales Contract have adequate hedge protection to avoid future downside losses; 
  • The Parties have agreed to further amendments to the Oil Sales Contract for lower pipeline tariffs and fees during the period of low oil prices; and,
  • PetroTal is coordinating with Petroperu to reopen the Bretana oil field in early July.

Arrangement

Pursuant to the terms of the Oil Sales Contract and the oil swap contract referenced in PetroTal’s May 7, 2020 announcement, a contingent liability arose due to the significant reduction in oil prices in early 2020.  The purchaser of the oil, Petroperu, has agreed to resolve this entire contingent liability on a one-time basis that would see the obligation paid evenly over a three year period, at an annual interest rate of 6.5%.  At May 31, 2020, 2.1 million barrels of oil are either in the pipeline or storage tanks, and based on the average oil price for May 2020, the contingent liability is approximately $43 million. At March 31, 2020, there were 1.8 million barrels of oil in the pipeline or storage tanks.  The actual liability will be determined based on the future Brent oil price when the oil is sold.  For reference, based on the average Brent oil price of approximately $40/bbl for June to date, the contingent liability is approximately $26 million.  The Arrangement will allow PetroTal to continue to benefit from the higher oil prices forecasted by the Brent forward strip pricing curve when the physical oil sales occur while allowing PetroTal to invest in the Bretana oil field development.  

As security for the Arrangement, the production facilities of PetroTal at Bretana will be pledged under a trust agreement pursuant to which such facilities will be held as security for the benefit of Petroperu. Along with the contractual monthly repayments, PetroTal may make additional pre-payments to facilitate an earlier payout.  Once Petroperu has been repaid in full, the trust agreement will terminate and any security in respect of the facilities shall be released.

PetroTal will continue to benefit from higher projected oil prices when the oil volumes that have been sold to Petroperu under the Oil Sales Contract and the oil swap contract are sold by Petroperu in Q3 and Q4 2020.  

Amendments to the Oil Sales Contract

In order to solidify the long-term operating relationship between PetroTal and Petroperu, the parties have agreed to amend certain terms of the Oil Sales Contract in recognition of the current weak oil price conditions.  The key changes are:

  • Extension of the term to three years from the current one-year term;
  • Given the extended time for Petroperu to realize the export sales, future invoices submitted by PetroTal will be due 240 days from when PetroTal delivers the oil at Saramuro;
  • PetroTal will continue to have the ability to immediately factor future invoices, at a nominal rate, and therefore cash flow is expected to remain largely unaffected by this longer invoice period;
  • Reductions in the pipeline tariff and commercialization fee graduated to correspond to varying levels of Brent oil prices;
  • At current Brent oil price levels with minimum production of 9,000 barrels of oil per day monthly average, the combined fees are expected to drop from $11.00 per barrel to $8.67 per barrel;
  • The initial differential at the time Bretana oil is sold to Petroperu  has been adjusted to $6 per barrel (previously $4 per barrel).  If the actual differential is less than the initial $6 per barrel at the time the oil is physically exported 8 to 12 months later, then PetroTal will recapture the difference as revenue, however if the actual differential is higher than $6 per barrel then PetroTal will pay the difference.  By increasing the initial differential, PetroTal is reducing its future exposure to realized price differential risk; 
  • Future value fluctuation settlements will occur at the date the physical oil is sold by Petroperu; 
  • To minimize the future price differential, Petroperu will use their best efforts to sell the Bretana oil at the best market conditions; and,
  • Both parties have mutually agreed to hedge future sales of the Bretana oil sold into the ONP to limit price exposure, at the Company’s expense.

Pipeline and Bretana Oil Field Shut Down

While the Bretana oil field remains shut down awaiting opening of the ONP by Petroperu, PetroTal is coordinating with Petroperu to reopen the Bretana oil field in early July, with the expectation that the ONP restarts pumping oil very shortly thereafter.  Both PetroTal and Petroperu will fully abide by the health directives issued by the Peruvian government in order to safely restart operations during the ongoing COVID-19 pandemic. 

Financial Update

PetroTal currently has no bank debt and continues its efforts to establish a credit facility that will further enhance liquidity and flexibility for the Company.  Upon collection of oil sales invoices in the next few weeks, PetroTal will have cash of approximately $11 million.  The Company has obligations to its suppliers of approximately $49 million, excluding the contingent liability to Petroperu.  Deferred payment plans are either in place or being discussed with a number of suppliers that will result in the payments being deferred to fit within PetroTal’s cash resources and future cash flow generated.   

Carlos Barrientos Gonzales, General Manager of Petroperu, commented:

“Petroperu appreciates the dedication and investment that PetroTal has made in the development of the Bretana oil field.  Petroperu expects to complete the significant upgrade of the Talara refinery in mid-2021 and the ability to utilize domestic oil production will be an important element.  PetroTal is an important player in Peru’s oil industry and is now an important oil producer in the Country.  The Oil Sales Contract between Petroperu and PetroTal is an important link between our two companies, and I’m pleased that we’ve reached agreement to extend it to three years along with the additional contract enhancements.  In recognition of the significant investment PetroTal has made in the Bretana oil field and production facilities, Petroperu is very comfortable with allowing the contingent liability to be settled over the next three years.  The Bretana oil production coming through the Northern Pipeline also represents an important benefit for the Loreto Region and for the Country”.

Manolo Zuniga, President and Chief Executive Officer, commented:

“PetroTal is pleased to embrace the strong working relationship it has with Petroperu.  Oil production from the Bretana oil field is an important component of Petroperu’s pipeline and refinery network.  Solidifying a three-year arrangement for both settlement of the contingent liability and ensuring future oil sales, significantly enhances PetroTal’s operations.  It also sets the stage for PetroTal to continue the development of the Bretana oil field, as and when oil prices recover.  

Our focus on balance sheet strength and enhancing liquidity will ensure PetroTal has the financial strength for working capital management and the ongoing development of Bretana.  PetroTal appreciates the support of its suppliers and the continued dedication of our employees and contractors.  Together, PetroTal will emerge from the pandemic stronger, in order to rebuild value for shareholders.” 

Eight Capital acted as strategic advisor to PetroTal on the Arrangement with Petroperu.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru.  PetroTal’s flagship asset is its 100% working interest in Bretaña oil field in Peru’s Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest oil producer in Peru.  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 the Bretaña oil field.  

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

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

Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 208 434 2643

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

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains 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; the Company’s ability to resume operations in accordance with developing public health efforts to contain COVID-19; additional cost reductions; and liability under the Swap Contract and Sales Contract and the settlement of such liability.  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.  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 volatility, price differentials and the actual prices received for products, 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.  In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company.  While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company.  Please refer to the risk factors identified in the Company’s annual information form for the year ended December 31, 2018 and management’s discussion and analysis for the three and nine months ended September 30, 2019 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 temporary shut down of operations, the anticipated resumption of operations, storage capacity, cost reductions, pipeline transportation arrangements, liability under the Swap Contract and Sales Contract 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 approved by management as of the date of this press release and was included 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.

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.


[1] TAMEX (Active Interest Rate Market Average Foreign Currency) published by SBS (https://www.sbs.gob.pe/app/stats/TasaDiaria_1.asp)

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/57765