PetroTal Advises of Gran Tierra Ownership Reduction

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 25, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") advises that, as announced by Gran Tierra Energy Inc. ("GTEI") on January 20, 2021, Gran Tierra Resources Limited ("GTRL") has sold an aggregate of 109,006,250 common shares in the Company ("Common Shares"). The Company understands that multiple entities purchased the shares sold by GTRL and that, following the sale, GTRL continues to hold 137,093,750 Common Shares, representing 16.8% of PetroTal's issued and outstanding Common Shares. PetroTal was not a party to the agreements and did not receive any proceeds from the sale transactions.

The Company has 816,167,379 Common Shares in issue and there are no shares held in treasury. For purposes of the Disclosure Guidance and Transparency Rules, the total number of voting rights (TVR) in the Company is 816,167,379. 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.

PetroTal and GTEI are parties to a Relationship Agreement dated December 17, 2018, in accordance with the Company's AIM admission process. The Relationship Agreement primarily covered that, as long as GTEI owned more than a 20% ownership of PetroTal, PetroTal and GTEI maintain business independence, arms' length relationships and that GTEI's voting rights were restricted to 30%, notwithstanding if the actual ownership was higher. As a result of the share sale transaction, the Relationship Agreement will automatically terminate in 56 days.

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 Bretana 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 Bretana 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

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, the termination of the Relationship Agreement. 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.

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/72713


PetroTal Announces Completion of Arrangement with Petroperu, and Two Year Extension of Oil Sales Contract

Update on Third-Party Sale of Shares

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 19, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that it has executed final agreements with PETROPERU S.A. ("Petroperu") to complete the restructuring (the "Arrangement") of the contingent liability referenced in PetroTal's June 12, 2020 press release and to extend the oil sales contract with Petroperu ("Oil Sales Contract") for an additional two years.

Highlights

  • Oil sales to Petroperu under the Oil Sales Contract for deliveries through the Northern Oil Pipeline ("ONP") have been extended for an additional two years beyond December 23, 2020;
  • At PetroTal's expense, Petroperu will place commodity price hedges on all oil sold through the ONP, after the oil is delivered by PetroTal to Pump Station # 1 at Saramuro, which will substantially limit PetroTal's exposure to the impact of oil price fluctuations in the period until Petroperu ultimately sells the oil from the Bayovar port;
  • The amount of the contingent liability at November 30, 2020 was $16.6 million. PetroTal will pay this amount to Petroperu over three years in equal monthly installments, with interest at an annual rate of 6.12%. The amount can be prepaid at any time, without penalty and is expected to be prepaid following successful completion of the contemplated bond issue announced on January 12, 2021;
  • Based on the current Brent oil price forward curve, when the physical oil sales are arranged by Petroperu, which is expected over the next six months, this will result in PetroTal receiving payments from Petroperu totalling approximately $26.1 million; and,
  • The Company continues to develop an alternative export route through to the Atlantic, based on the success of the first 106,000 barrel pilot in December 2020, and PetroTal has now arranged a second 200,000 barrel pilot in February 2021, FOB Bretana.

Arrangement

Pursuant to the Arrangement, PetroTal and Petroperu have agreed to resolve the entire contingent liability that arose due to the significant reduction in oil prices in early 2020, on a one‐time basis that will result in the obligation being paid evenly over a three year period, together with interest at an annual rate of 6.12%. From the total of 2.4 million barrels of oil that gave rise to the contingent liability, approximately 575,000 barrels were sold between July and November 2020, and the remaining 1.8 million barrels of oil are either in the pipeline or storage tanks.

Based on the average oil price for November 2020, the contingent liability was $16.6 million. The actual liability or asset value will be determined based on the future Brent oil price when the remaining 1.8 million barrels of oil are sold. For reference, assuming the physical oil sales are completed by Petroperu over the next six months based on the current Brent forward curve, PetroTal will receive payment from Petroperu of approximately $26.1 million.

As part of the security package, the production facilities of PetroTal at Bretana have been pledged to Petroperu as security under the Arrangement and additional security will be pledged pursuant to a trust agreement that is expected to be finalized within 30 days. Along with the contractual monthly repayments, PetroTal may make additional pre‐payments to facilitate an earlier payout, without penalty and PetroTal expects to prepay the Arrangement following successful completion of the contemplated bond issue announced on January 12, 2021. Once Petroperu has been repaid in full, the security arrangements will terminate, and all pledged production facilities and other security will be released back to PetroTal.

As noted above, PetroTal is expected to 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, which is expected to occur by the end of Q2 2021.

Amendments to the Oil Sales Contract

In order to solidify the long‐term operating and commercial relationship between PetroTal and Petroperu, the parties have amended certain terms of the Oil Sales Contract. The key changes are:

  • Extension of the term for an additional two years, effective from December 23, 2020;
  • 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;
  • 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 sold 8 to 12 months later, then PetroTal will recapture the difference as revenue, and if the actual differential is higher than $6 per barrel then PetroTal will pay the difference. As a reference, the first cargo of Bretana oil was sold in July 2020 with a differential of $1.39 per barrel to Brent and, a second cargo (of three oil blends), was sold in November 2020 with a differential of $4.25 per barrel to Brent. As the basis for ongoing price determination, the differential for each subsequent physical sale by Petroperu will be utilized for prevailing invoices;
  • 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;
  • Petroperu will hedge future sales of the Bretana oil sold into the ONP to limit price exposure, at the Company's expense; and,
  • Once Petroperu has been repaid in full and the securities are released, PetroTal will fund an escrow reserve account with a pledge in favor of Petroperu for $2.5 million (to be increased up to $6 million by monthly installments of $0.55 million) to secure the financial costs associated to the hedge and future price differential.

Update on Third-Party Sale of Shares

On December 14, 2020, the Company announced that it had been informed by Gran Tierra Resources Ltd. ("GTRL"), a control person of PetroTal, that GTRL had entered into a private purchase and sale agreement with Remus Horizons PCC Limited ("Remus") in respect of the purchase by Remus of 218,012,500 common shares of PetroTal currently held by GTRL.

On January 18, 2021, GTRL informed PetroTal that the purchase and sale agreement has been terminated. PetroTal was not a party to the agreement and would not have received any proceeds from the transaction had it been completed.

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

"PetroTal is pleased to finalize this agreement with Petroperu that effectively deals with the legacy contingent liability and ensures that PetroTal is substantially protected against future oil price volatility through hedging arrangements. Petroperu's pipeline and refinery network are important elements of PetroTal's ongoing Bretana oil field development, and the Company embraces the strong working relationship it has with Petroperu. In addition to the Company's recently announced successful pilot oil export through Brazil, this agreement with Petroperu that ensures future oil sales into the ONP, along with settlement of the contingent liability, significantly enhances PetroTal's operations."

Updated Corporate Presentation

As announced on January 12, 2021, an updated corporate presentation is now available on the Company's website at www.petrotal‐corp.com.

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 Bretana 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 Bretana 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

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 settlement of the contingent liability with Petroperu pursuant to the Arrangement and the timing thereof; the pledge of additional security pursuant to the Arrangement; and future oil sales and price hedging under the Oil Sales Agreement. 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, 2019 and management's discussion and analysis for the year ended December 31, 2019 and for the three and nine months ended September 30, 2020 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 liability or entitlements under the Arrangement, including the final amount and settlement thereof, oil sales and hedging arrangements under the Oil 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.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in 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.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/72333


PetroTal Announces Contemplated $100 Million Bond Issue and Operations Update

Funds anticipated to be primarily invested to expand development of the Bretana oil field and prepay 100% of Petroperu's restructured debt

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 12, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that it has mandated Pareto Securities AS to arrange a series of fixed income investor virtual meetings commencing January 14, 2021.

Subject to, inter alia, market conditions, a new USD 100 million senior secured three year bond issue (the "Bond Issue") may follow. The proceeds of the potential Bond Issue will be used to settle in full the cumulative oil price difference liability owed to Petroperu (approximately USD 16.6 million - as previously announced); to finance the ongoing development of PetroTal's flagship Bretana oil field in Northern Peru; to provide funds to support the Company's hedging program; and to finance potential synergistic acquisitions.

Further details will be provided as and when appropriate.

Bretana Oil Field Update

On January 7, 2021, the Company announced that, coincident with full commencement of Petroperu's Northern Oil Pipeline (ONP) operations, PetroTal's production was approximately 9,500 barrels of oil per day (''bopd'') and was expected to increase as operations returned to a stabilized level. Since January 7, 2021, oil production has increased to an average of 10,025 bopd, with optimization continuing.

Additionally, as PetroTal continues to ensure it has export optionality, the Company has now signed an agreement for a second pilot shipment through Brazil in February 2021, of up to 220,000 barrels of oil. The increased volume of this shipment over the initial pilot export is expected to improve overall economics and lead towards the establishment of regular exports, complementing sales into the ONP and to the Iquitos refinery.

Proceeds from the contemplated Bond Issue will allow PetroTal to resume development drilling at Bretana in March 2021. In anticipation of expected higher oil production, the modular processing equipment for expansion of the second phase of Central Processing Facilities (CPF#2) is complete and is currently en route to Bretana.

Updated Corporate Presentation

The Company announces that an updated presentation is now available on the Company's website at www.petrotal-corp.com.

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 Bretana 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 Bretana 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

Pareto Securities AS
Fixed income sales
T : 47 22 87 87 71

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

This announcement includes inside information.

READER ADVISORIES

NO OFFER: The information contained in this press release is for information purposes only and does not purport to be full or complete or constitute: (a) a prospectus or offering memorandum; or (b) an admission document prepared in accordance with AIM rules. 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. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. The Company does not intend to register any securities referred to herein in the United States or to conduct a public offering of securities in the United States.

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: the Bond Issue being conducted and the successful marketing and closing thereof; the terms of the securities proposed to be issued under the Bond Issue; the use of proceeds of the potential Bond Issue; the Company holding virtual investor meetings and the results thereof; the Company providing further details in respect of the Bond Offering; and PetroTal's business strategy, generally, including development of the Bretana oil field and potential future acquisitions.. 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 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. 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 and management's discussion and analysis for the year ended December 31, 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.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in 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.

NOT FOR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/71821


PetroTal Q4 2020 Operations Update

Current Oil Production at 9,500 bopd with the ONP pipeline fully operational and Brazil export viability confirmed

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 7, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that following the recommencement of operations of Petroperu's Northern Oil Pipeline ("ONP"), oil production at the Bretana oil field is currently at 9,500 barrels per day ("bopd") and expected to reach 10,000 bopd in the next few days. Total oil production for 2020 was 2.08 million barrels (5,675 bopd), as compared to 1.5 million barrels (4,131 bopd) in 2019. All amounts herein are in United States dollars ("US$") unless otherwise stated.

Highlights

  • Total oil produced in 2020 was 2.08 million barrels (5,675 bopd), significantly impacted by the Covid-19 pandemic and ensuing social unrest;
  • 59% of the 2020 oil production was produced during the first four months of the year, before the pandemic forced Petroperu to shut down the ONP in early May 2020;
  • In December 2020, the Company successfully completed a 106,000 barrel FOB Bretana pilot oil export via Brazil, and is preparing for a second pilot of 200,000 barrels during February 2021;
  • The successful initial Brazil export pilot, as well as the storage of produced oil in contracted barges, allowed the Company to produce 590,000 barrels in the fourth quarter ("Q4") of 2020, even with the ONP shut down during the entire quarter;
  • With the ONP now fully operational, production from the Bretana oil field is currently 9,500 bopd and is expected to reach 10,000 bopd in the next few days;
  • As a result of higher oil prices, the Company's contingent derivative liability was reduced to $2.7 million at December 31, 2020; and,
  • At year-end 2020, the Company had cash resources of approximately $9.6 million.

Petroperu Pipeline Operations

Petroperu announced on January 3, 2021 that they had completed their assessment of the pump stations and the ONP, including the area of the ONP that required an inspection, and that the ONP is now fully operational. Pump Station No.1, at Saramuro, started pumping oil towards Pump Station No.5 on December 28, 2020 allowing the Company to unload, before the end of the 2020, 38,000 barrels of the 131,300 barrels of oil stored in six contracted barges at Saramuro, with the remaining 93,300 barrels unloaded during the first week of January. All oil unloaded at Pump Station No.1 is invoiced to Petroperu at the beginning of each following month. The Petroperu announcement can be found at:

(https://www.petroperu.com.pe/petroperu-reinicia-operacion-del-oleoducto-norperuano?pdf=1).

2020 Oil Production

The Company achieved annual oil production for 2020 of 2.08 million barrels (5,675 bopd), as compared to annual oil production in 2019 of 1.5 million barrels (4,131 bopd). The Bretana oil field was shut in for a total of 121 days as a result of the Peruvian government health department-directed Covid-19 related shut in (71 days) and subsequent social disruption (50 days). Considering the need to also constrain production during this period, PetroTal had to shut in or constrain production for approximately 47% of 2020.

For Q4 2020, PetroTal produced throughout the quarter, although at constrained rates in order to manage market availability to deliver oil to the Iquitos refinery, the ONP, the successful 106,000 barrel pilot Brazilian export, and ultimately store oil in the Company's tanks and contracted barges prior to delivery. Average oil production from the Bretana oil field in Q4 2020 was 6,413 bopd, compared to 2,444 bopd for Q3 2020, and 7,757 bopd for Q4 2019.

At December 31, 2020, PetroTal held 29,700 barrels of oil in its tank inventory and 133,300 barrels of oil in contracted barges, comprising 93,300 barrels awaiting delivery into the ONP at Saramuro and 40,000 barrels on their way to the Iquitos Refinery. The barges have now completed delivery of this oil to the ONP and Iquitos.

Contingent Derivative Liability

At November 30, 2020, the contingent liability was $16.6 million and, upon imminent document approval by Petroperu, will be structured into a three-year payment arrangement. Additional amendments to the sales agreements will, among other things, result in placement of hedges for the 1.8 million barrels of oil in the pipeline network to ensure that the realized price is based on the respective forecasted Brent oil prices to protect from any oil price downside until the barrels are ultimately sold.

As a result of higher oil prices, the Company's contingent derivative liability relating to oil sold to Petroperu was reduced to $2.7 million at December 31, 2020. The contingent liability relates to the timing difference between when Petroperu provides an initial payment for the oil and when the final settlement price is calculated. The amount of the ultimate liability will be crystallized when the oil is sold by Petroperu, which is expected to commence in February 2021, with further cargos until the end of Q2 2021.

Liquidity Update

At December 31, 2020, PetroTal had cash resources of approximately $9.6 million, with accounts payable and accrued liabilities of approximately $44.3 million, an increase of $4.0 million from September 30, 2020. Ongoing payments will be managed from expected oil field revenues and internal cash resources. Pursuant to contractual terms with our suppliers, approximately $12.6 million, (28%) are not due until after Q1 2021.

The Company continues to work towards finalizing a significant credit facility to support the planned capital program and a return to development drilling at the Bretana oil field.

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

"We are pleased to have returned to normalized Bretana oil field operations and reliable pipeline operations. We are also pleased that the initial Brazil export pilot was a success, and we are already preparing for a second pilot of 200,000 barrels during February 2021. This will ultimately benefit all parties and help to encourage continued investment in Peruvian oil field developments. On behalf of PetroTal, I would like to recognize the support of the indigenous communities, Petroperu and the Peruvian government, to ensure that a solid investment proposition exists in Peru and the ongoing investment that benefits Peru. Additionally, I would like to thank our shareholders for their continued support, along with the dedication of the PetroTal team."

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 Bretana 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 with more than 10,000 bopd of production. 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

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; increased oil production volumes due to the reopening of the Bretana oil field and resumption of oil production therefrom; the effects and duration of the Funding Agreement; PetroTal's plans regarding community support, the environmental and corporate governance; and the ongoing effects of Covid-19 on the Company and its employees. 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 reopening of existing infrastructure, its ability to deliver production and the anticipated capital expenditures associated therewith; successful implementation of the Decree; prevailing commodity prices and actual prices received for PetroTal's products; the availability and performance of drilling rigs, facilities, pipelines, inventory and barge storage capacity, other oilfield services and skilled labour; royalty regimes; exchange rates; the application of regulatory and licensing requirements; current legislation; the success of future drilling and development activities; and general economic conditions. 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. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for the three and nine months ended September 30, 2020 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.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/71555