PetroTal Announces Grant of Performance Share Units

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 26, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") announces the annual grant of performance share units ("PSUs") to officers and employees of the Company.

PetroTal granted an aggregate of 14,205,198 PSUs, of which 7,463,529 are to officers of the Company in accordance with the provisions of the Company's PSU plan. The PSUs to the officers will vest three years from the date of grant and each PSU will entitle the holder to acquire, for nil cost, between zero and two common shares of the Company ("Shares"), subject to the achievement of performance conditions relating to the Company's total shareholder return, net asset value and certain production and operational milestones. The remaining PSUs vest annually, on an equal basis, over the next three years. The Corporate Governance and Compensation Committee of the Board is charged with overseeing the PSU plan.

Summary of PSU grants to officers

 Manuel Pablo Zuniga-Pflucker, President and CEO   3,243,929
 Douglas Urch, Executive Vice President and CFO   2,296,471
 Estuardo Alvarez-Calderon, Vice President, Exploration and Development   1,923,129

 

Further details regarding the PSU plan are set out in the management information circular of the Company dated July 29, 2020, which is available on SEDAR at www.sedar.com.

Following this grant, the Company has a total of 23,516,953 PSUs outstanding.

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 below:

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; drilling, water and completion activities and the anticipated costs and results of such activities; the ability of the Company to achieve drilling success consistent with management's expectations; anticipated future production and revenue; future development and growth prospects; and the timing of release of the AIF. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price 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, 2020 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.

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.

Corporate Logo

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/75544


PetroTal Announces 2020 Year-End Oil Reserves

7% increase in 2P Reserves to 51.0 million barrels
and 25% increase in 3P Reserves to 106.1 million barrels

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 24, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company"), a Peruvian focused E&P company, is pleased to announce the results of its 2020 year-end reserve evaluation by Netherland, Sewell & Associates, Inc. ("NSAI") for the Bretaña oil field, operated 100% by PetroTal. All currency amounts are in United States dollars (unless otherwise stated) and comparisons refer to December 31, 2019.

HIGHLIGHTS:

  • Proved ("1P") reserves increased by 4% to 22.3 million barrels ("mmbbl") from 21.5 mmbbl, Proved plus Probable ("2P") reserves increased by 7% to 51.0 mmbbl from 47.7 mmbbl and Proved plus Probable and Possible ("3P") reserves increased by 25% to 106.1 mmbbl from 84.8 mmbbl;
  • Relative to 2020 oil production of 2.1 mmbbl, reserve replacement was 38% in 1P reserves and 157% in 2P reserves; Bretaña's reserve life index ("RLI") for 1P and 2P reserves is now 6.4 years and 14.6 years, respectively;
  • Original oil in place ("OOIP") estimates for 1P, 2P, and 3P reserve categories were unchanged from 2019 at 235, 364, and 579 mmbbls, respectively;
  • NSAI attributes a corresponding 2P recovery factor of 15.0%, increased from 13.6% at year-end 2019 due to performance of the existing wells;
  • A 19% decrease in total 2P operating costs resulting in an undiscounted saving of $232 million driven by further calibration and optimization to the Company's actual cost structure;
  • Net Present Value (before tax, discounted at 10%) (NPV-10) is calculated at $317 million ($14.21/bbl) for 1P reserves, $830 million ($16.27/bbl) for 2P reserves;
  • The 2021 development program combined with all future development and abandonment costs, represent total finding and development costs of $11.52/bbl for 1P reserves, $4.96/bbl for 2P reserves and $3.16/bbl for 3P reserves; and,
  • On a 2P basis, this represents a recycle ratio of 4.7 times, based on the total $4.96/bbl finding and development cost relative to a netback of $23.40/bbl (assumed at $50.00/bbl Brent oil price).

2020 Year-end Reserves Summary

The summary below sets forth PetroTal's reserves as at December 31, 2020, as presented in the independent reserves report prepared by NSAI, a qualified reserves evaluator. The figures in the following tables have been prepared in accordance with the standards contained in the most recent publication of 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, more detailed information will be included in PetroTal's annual information form for the year ended December 31, 2020 (the "AIF") to be filed on SEDAR (www.sedar.com) and posted on PetroTal's website (www.petrotal-corp.com) in April 2021.

Six Year Crude Oil Price Forecast - NSAI Report

Year-End Forecast: 2021 2022 2023 2024 2025 2026
Brent (USD$/bbl) - January 1, 2021 $49.42 $52.85 $56.04 $57.87 $59.00 $60.15
Brent (USD$/bbl) - January 1, 2020 $67.94 $70.06 $71.66 $73.27 $74.57 $76.22

 

The oil price projections used by NSAI are based upon an average of December 31, 2020 and 2019 forecasts of Brent Crude futures prices prepared by qualified reserves evaluators: GLJ Petroleum Consultants Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Limited.

Year-End Crude Oil Reserves (mmbbl)

CATEGORY 2020 2019 Change
Proved
Developed Producing 12.0 11.2 +7%
Undeveloped 10.3 10.3 0%
Total Proved 22.3 21.5 +4%
Probable 28.7 26.2 +10%
Total Proved plus Probable 51.0 47.7 +7%
Possible 55.1 37.1 +49%
Total Proved plus Probable & Possible 106.1 84.8 +25%

 

Represents gross and net barrels since PetroTal owns a 100% working interest and a 100% net revenue interest in these properties. Royalties are paid from sales proceeds.

Year-End Net Present Value at 10% - Before Tax ($ millions)

CATEGORY 2020 2019 Change
Proved
Developed Producing $135 $202 -33%
Undeveloped $182 $232 -22%
Total Proved $317 $434 -27%
Probable $513 $665 -23%
Total Proved plus Probable $830 $1,098 -24%
Possible $891 $777 +15%
Total Proved plus Probable & Possible $1,721 $1,875 -8%

 

Using the December 31, 2019 NSAI price deck on the December 31, 2020 NSAI reserves, holding all other assumptions constant, the year-end net present values (before tax) discounted at 10% would increase by the following approximate amounts: 1P - $250 million, 2P - $480 million, 3P - $780 million.

Year-End Net Present Value at 10% - After Tax ($ millions)

CATEGORY 2020 2019 Change
Proved
Developed Producing $134 $137 -2%
Undeveloped $137 $158 -13%
Total Proved $271 $295 -8%
Probable $350 $452 -23%
Total Proved plus Probable $621 $746 -17%
Possible $607 $529 15%
Total Proved plus Probable & Possible $1,228 $1,275 -4%

 

Year-End Reserves Value per Share - After tax

CATEGORY Dec. 31, 2020 Dec. 31, 2019
Reserves per share US$/sh CAD$/sh GBP/sh US$/sh CAD$/sh GBP/sh
Proved $0.33 $0.43 0.24 $0.44 $0.59 0.33
Proved plus Probable $0.76 $0.98 0.56 $1.11 $1.48 0.84
Proved plus Probable & Possible $1.50 $1.93 1.10 $1.90 $2.53 1.43

 

Represents NPV-10 (after tax) divided by the number of common shares issued as of December 31 of each respective year and excludes other balance sheet items at the relevant date. Canadian share prices are converted at the respective year end foreign exchange conversion rates. Common share count as at December 31, 2020 totaling 816.2 million shares and as at December 31, 2019 totaling 672.2 million shares.

Reserve Life Index

CATEGORY Dec. 31, 2020 (1) Dec. 31, 2019 (3)
Proved 6.4 years 7.7 years
Proved plus Probable 14.6 years 17.0 years
Proved plus Probable & Possible (2) 30.3 years 30.3 years

 

(1) Based on 2020 year-end reserves divided by annualized Q1 2020 production of approximately 9,686 bopd.
(2) The license for Block 95 expires in 2041.
(3) Based on 2019 year-end reserves divided by annualized Q4 2019 production of approximately 7,757 bopd.

Future Development Costs

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

CATEGORY ($ million) 2020 2019 Change
Proved
Developed Producing $15 $16 -6%
Undeveloped $104 $108 -4%
Total Proved $119 $124 -4%
Probable $75 $70 +7%
Total Proved plus Probable $193 $194 -1%
Possible $104 $105 -1%
Total Proved plus Probable & Possible $297 $299 -1%

 

Future development costs ($/bbl) 2020 2019 Change
Proved $11.52 $12.04 -4%
Proved plus Probable $4.96 $5.32 -7%
Proved plus Probable & Possible $3.16 $4.06 -22%

 

The future development and abandonment costs are estimates of the future capital expenditures required to convert the corresponding reserves to proved developed producing ("PDP") reserves. Future development per barrel is determined using the future development capital divided by the 1P, 2P, or 3P reserves, less cumulative PDP.

2020 Year-End Gross Reserves Reconciliation (mmbbl)

Proved Proved plus
Probable
Proved plus
Probable & Possible
December 31, 2019 21.5 47.7 84.8
Technical Revisions 3.8 5.9 24.0
Economic Factors (1.0) (0.6) (0.6)
Production (2.1) (2.1) (2.1)
December 31, 2020 22.3 51.0 106.1

 

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

Considering the challenging conditions 2020 presented, we are extremely happy with the 2020-year end reserve report. The recovery factor improvements in our 2P and 3P categories support our thesis of continued reservoir performance over time matching that of nearby analogous fields with higher recovery factors. With additional time and field data, we expect to see continual recovery improvements. We are also very proud of the hard working operations and commercial teams at PetroTal which were able to demonstrate and justify to our reserve evaluators, a decrease in 2P operating costs by 19%, equating to $232 million, in undiscounted savings over the remaining reserve life. We will continue to run operations prudently with attention to optimization, cost reductions and safety for the benefit of all our stakeholders.

Qualified Person's Statement

Estuardo Alvarez-Calderon, the Company's Vice President, Exploration and Development, who has over 35 years of relevant experience in the oil industry, has approved the technical information contained in this announcement. Mr. Alvarez-Calderon received a Bachelor of Science degree in Geology from the University of Texas at Austin and is registered on the Texas Board of Professional Geoscientists.

The recovery and reserve estimates provided in this news release are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual reserves may eventually prove to be greater than, or less than, the estimates provided herein. In certain of the tables set forth below, the columns may not add due to rounding.

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 below:

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; drilling, water and completion activities and the anticipated costs and results of such activities; the ability of the Company to achieve drilling success consistent with management's expectations; anticipated future production and revenue; future development and growth prospects; and the timing of release of the AIF. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price 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, 2020 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.

OIL AND GAS INFORMATION: This press release contains metrics commonly used in the oil and natural gas industry, such as netback, OOIP, finding and development costs, recycle ratio, reserve life index and net asset value.

"Netback" equals total petroleum sales less quality discount, lifting costs, transportation costs and royalty payments calculated on a bbl basis.

"OOIP" is equivalent to total petroleum initially-in-place ("TPIIP"). TPIIP, as defined in the COGE 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.

"Finding and development costs" are calculated as the sum of field capital plus the change in future development costs for the period divided by the change in reserves that are characterized as development for the period. Finding and development costs take into account reserves revisions during the year on a per boe basis. The aggregate of the exploration and development costs incurred in the financial year and changes during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

"Recycle ratio" is measured by dividing the netback for the applicable period by finding and development cost per boe for the year. The recycle ratio compares netback from existing reserves to the cost of finding new reserves and may not accurately indicate the investment success unless the replacement reserves are of equivalent quality as the produced reserves.

"Reserve life index" is calculated as total Company interest reserves divided by annual production.

"Net asset value" is based on present value of future net revenues discounted at 10% before tax on reserves, net of estimated net debt at year end divided by the basic shares outstanding at year end.

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. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.

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.

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 and abandonment costs, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was 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. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

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

Corporate Logo

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/75307


PetroTal Announces 2021 Capital Budget of US$100 million

Targeting 2021 average oil production between 11,000 and 12,000 bopd, with a 2021 exit range of 18,000 to 19,000 bopd

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 18, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce its 2021 capital program of US$100 million. The program will be fully funded from the recently announced US$100 million bond issue, supplemented with funds generated from operations and existing cash resources.

The drilling focused development program is expected to start in March 2021 and continue through December 2021. The program is designed to enable PetroTal to more than double production from Q1 2021 to Q4 2021, and complete phase two of the highly scalable central processing facility ("CPF-2") in Q3 2021. All amounts are quoted in US dollars.

2021 Capital Program Highlights

  • Drill and complete three horizontal development wells, one deviated production well and a second water disposal well at the Bretana oil field;
  • Complete the second phase of CPF-2 in Q3 2021, taking overall fluid production capacity up to 124,000 barrels per day, sufficient to handle 24,000 barrels of oil per day ("bopd");
  • Target average 2021 oil production between 11,000 and 12,000 bopd with a target 2021 exit range of 18,000 to 19,000 bopd,
  • Generate cash flow ("EBITDA") of approximately $90 million, based on a forecast Brent oil price of $50 per barrel flat;
  • Total 2021 capital expenditures of $100 million, fully funded from proceeds of the recent $100 million bond issue, funds from operations and existing cash resources; and,
  • In addition to ongoing Environmental, Social and Governance ("ESG") initiatives, PetroTal has allocated over $1 million in operating and capital spending for specific community investments.

2021 CAPITAL BUDGET

Based on the successful 2019 and 2020 drilling results, PetroTal will spud five new development wells at Block 95 costing approximately $7 million for the deviated well and between $12- $14 million per horizontal well. Four of these oil wells are expected to be producing in 2021, with the fifth well on production in February 2022. A second water disposal well is planned in May at an estimated cost of $9 million, providing an expected 50,000 barrels of water per day of additional disposal capacity and enabling oil production growth beyond 20,000 bopd.

Completion of CPF-2 in Q3 2021 for an estimated $12 million will boost fluid handling capacity to 124,000 barrels per day, sufficient for approximately 24,000 bopd. The additional investment will bring total investment in CPF-2 to $24 million, approximately $4 million less than the original estimate. Extensions to the loading dock to handle larger oil volumes and optimal integration of CPF-1 and CPF-2 will require $3 million. Commissioning CPF-2 for commencement in Q3 2021 is designed to facilitate our Q4 2021 average oil production target of between 16,000 and 17,000 bopd.

Remaining notable capital investments include injection pumps, electrical infrastructure, and various field and security upgrades. These smaller capital items will complement the expected operational pace and fluids growth profile throughout 2021. In addition, a $1 million workover on the 4H well will commence in March that will result in a higher capacity pump being installed. The 4H well has been shut in since late January due to a transformer failure during the commissioning of the new crude oil power generation plant, thereby causing issues with the original pump. With the enhanced capacity pump, the estimated lost production of approximately 100,000 barrels of oil will be recovered in Q3 2021 and will lead to consistently higher production rates and a higher estimated ultimate recovery for the 4H well.

COMMUNITY RELATIONS

Included in the 2021 operating and capital budget are amounts related to community and social focused projects. Notable items include over $1 million allocated for community upgrades to electricity and water systems, building infrastructure and a commitment to provide diesel at Bretaña for community use. In addition, as part of these corporate social awareness initiatives, PetroTal has delivered certified construction materials for a 200-meter bridge in the community of Urarinas. This will benefit more than 65 families, including 175 children, who will have direct access to their school, and can avoid commuting via boat. As in past years, PetroTal will continue to provide ongoing agricultural and aquaculture training to over 300 local families to promote the local economy. Additionally, as part of our overall COVID-19 protocol we continue assisting the local communities of the Bretana district with medical supplies and testing kits.

BLOCK 107

Approximately $1.8 million will be allocated for continued technical and permitting work at Block 107, representing approximately 2% of the 2021 total capital program.

Capital Budget Summary $ millions
Drilling and Completion $68
Production Facilities $13
Infrastructure and ESG $17
Other - Block 107 $2
Total 2021 Capital Budget $100

 

PRODUCTION GUIDANCE

With this capital program, PetroTal estimates 2021 average production of between 11,000 and 12,000 bopd, an increase from the 2020 average production of 5,675 bopd, and well above the Q4 2020 average production of 6,413 bopd.

The first 2021 development well is expected to be on production in April and increase oil production rates to pre-May 2020 shut-in levels of between 10,500 and 11,500 bopd, inclusive of base reservoir declines. In addition, before the end of June 2021, PetroTal will drill a water disposal well, resulting in H1 2021 average production of 9,000 to 10,000 bopd, equivalent to the Q1 2020 pre COVID-19 rate. Three additional horizontal development wells are expected on production through H2 2021 with the final well of the 2021 program drilled in late 2021 and on production in early February 2022. Production is expected to average between 14,000 and 15,000 bopd in H2 2021.

PRODUCTION AND CAPITAL PROFILE

Q1 Q2 Q3 Q4 2021
New oil wells completed* 0 1 1 2 4
New water disposal wells 0 1 0 0 1
Oil production (bopd) 7,000 - 8,000 10,000 -
11,000
11,500 -12,500 16,000 -17,000 11,000 -12,000
Total CAPEX ($ millions) 15 30 30 25 100

 

*Excludes one horizontal well to commence drilling in December 2021 and be completed in early 2022

CAPITAL PROGRAM FUNDING

The fully subscribed $100 million bond offering, which closed on February 16, 2021, allows PetroTal to kickstart its 2021 capital program in March 2021 and immediately commence near term operations without working capital constraints. The 2021 capital budget has been planned conservatively and is fundable down to an unhedged $44/bbl Brent flat for the remainder of 2021. At $50/bbl Brent flat, the 2021 budget is substantially funded out of cash flow by 2021 year end, allowing PetroTal the flexibility to allocate additional liquidity from the bond issuance to the highest return weighted projects, while maintaining strong credit metrics. With an enhanced risk management focus, PetroTal plans to implement a robust hedging program with an emphasis on protecting the 2021 capital budget and ensuring covenant compliance should oil prices fall materially from current levels. The program may include swaps, puts, and collars over the next twelve months' production.

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

"We are excited about our early achievements in 2021. As a management team, we overcame many unique challenges in 2020 and we are now positioned stronger than before the pandemic. With the successful placement of our three year bond, we can pivot into a forward leaning position operationally and have the financial confidence to execute what we do best, namely development of the Bretana oil field. We believe our approved 2021 capital budget is balanced and paced appropriately to fit our short and long-term targets. Ongoing operational success and financial discipline will allow the Company to be rewarded in a rising oil price environment. We intend for 2021 to be a year of operational excellence as we continue to demonstrate our repeatable organic growth story to the market. Having additional liquidity will also allow our highly experienced technical team to evaluate further opportunities to the benefit of our stakeholders.

2021 will be a defining year for the Company as we look to double production and realize scale and synergies that compete with the best oil plays in the world. I would like to sincerely thank the entire PetroTal team, the Board, our shareholders, and our new bondholders for their continued support in what is an exciting period for PetroTal."

Qualified Person's Statement

Estuardo Alvarez-Calderon, the Company's Vice President, Exploration and Development, who has over 35 years of relevant experience in the oil industry, has approved the technical information contained in this announcement. Mr. Alvarez-Calderon received a Bachelor of Science degree in Geology from the University of Texas at Austin and is registered on the Texas Board of Professional Geoscientists.

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 $100 million bond issue and the closing thereof; drilling, water and other activities and the anticipated costs and results of such activities; the ability of the Company to achieve drilling success consistent with management's expectations; anticipated future production and revenue; drilling plans including the timing of drilling; oil production levels, including average production and exit production in 2021; decline rates; the 2021 capital program and budget, including drilling plans, the proposed scale-up of CPF-2 and the timing thereof; development of Block 107; commitment to ESG principles; hedging program and the terms thereof; and future development and growth prospects. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e. g. , operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price 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 prospective results of operations, production and production capacity, operating costs, EBITDA, 2021 capital program and budget (including the expectation that such budget will be cash flow funded by 2021 year end), bond offering 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/74815


PetroTal Announces Completion of US$100 Million Senior Secured Bond Issue

Funding will support ongoing Bretana oil field development

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 17, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that on February 16, 2021 it completed the issuance of the US$100 million issue of senior secured bonds, previously announced on February 2, 2021. The new bond issue will be PetroTal's only interest bearing debt and will be used to retire the existing derivative liability with Petroperu, continue development of the Bretana oil field, support the Company's crude oil price hedging strategy, and finance potential acquisitions. Details of the 2021 capital budget will be released on February 18, 2021.

Pareto Securities acted as sole bookrunner and manager of the bond issue.

Douglas Urch, Chief Financial Officer, commented:

"We are pleased to finalize this inaugural US$100 million bond issue for PetroTal. This funding supports the ongoing development of the Bretana oil field, building on the success achieved to date, and that is expected to achieve production of 20,000 barrels of oil per day during H2 2022. The confidence shown by the bond investors supplements the existing equity investment of our shareholders."

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: PetroTal's business strategy, objectives, strength and focus; use of proceeds from the $100 million bond issue, including retiring the existing derivative liability with Petroperu, development of the Bretana oil field, support for price hedging and financing potential acquisitions; oil production levels, including target production of 20,000 barrels of oil per day in H2 2022; and future development and growth prospects. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e. g. , operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price 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.

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.

Corporate Logo

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/74696


PetroTal Announces Successful US$100 Million Bond Issue

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 2, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") announces that it has successfully completed the placement of a 3-year US$100 million senior secured bond (as announced on January 12, 2021) with a fixed coupon of 12% and a borrowing limit of $125 million (the "Bond").

PetroTal intends to use the net proceeds from the Bond to repay all existing outstanding loans (in particular the restructured derivative liability with Petroperu, details of which were announced on January 19, 2021), to finance the continued development of the Bretana oil field, to provide support for crude oil hedging transactions, and to finance potential acquisitions.

The Bond is expected to close on or about February 16, 2021, subject to customary closing conditions.

Pareto Securities acted as sole bookrunner and manager of the bond issue.

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

"PetroTal is pleased with the investor interest in this $100 million inaugural bond offering. This financing significantly enhances PetroTal's liquidity and will immediately lead to a return to development activity at the Bretana oil field, with the next well expected to commence drilling by the end of Q1 2021. Additionally, the bond offering provides PetroTal with capital that enables us to pursue synergistic and accretive transactions to diversify the Company's operations. As promised to our shareholders, all this will allow PetroTal to exit this pandemic crisis stronger than before."

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

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, including the size and terms thereof; the closing of the Bond and the timing thereof; the use of proceeds from the Bond; 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/73389