PetroTal Advises of Social Disruption Impacting Bretana Operations

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - November 24, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") advises of community social disruption that is impacting the Company's operations in the Bretana oil field. The social unrest situation evolved quickly near the barge loading area of the field. The oil field remains safe and producing; however, protestors are currently blocking access to the dock, preventing the Company from loading oil barges. The civil unrest is being conducted by a group seeking assistance from the Government of Peru.

PetroTal will curtail production to manage its oil tank storage capacity, however, if this situation persists, a full field shut down may be required within a few days due to the lack of excess storage capacity and route to market. PetroTal is in direct communication with the local communities and the government to enact a quick resolution to this situation. As previously announced by PetroTal, implementation of a community social development fund that should be acknowledged and supported by the Peruvian government, will go a long way to providing harmony and equitable social development.

Further updates on developments will be provided as and when they occur.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTC Pink: PTALF) 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. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / James Spinney / Robert Collins
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
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; and the impact of social disruption on the Company's operations, including a potential field shutdown at Bretana. 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. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021, 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/104933


PetroTal Announces Q3 2021 Financial and Operating Results

PetroTal delivers 8% production growth, robust net operating income, continued balance sheet strength, and operational excellence from well 8H performance

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - November 18, 2021) - PetroTal Corp. ("PetroTal" or the "Company") (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) is pleased to announce its financial and operating results for the nine and three months ("Q3") ended September 30, 2021.

Selected financial and operational information is outlined below and should be read in conjunction with the Company's unaudited consolidated financial statements ("Financial Statements"), and management's discussion and analysis ("MD&A") for Q3 2021, which are available on SEDAR at www.sedar.com and on the Company's website at www.PetroTal‐Corp.com. All amounts herein are in United States dollars ("USD") unless otherwise stated.

Key Highlights:

  • Achieved Q3 2021 production of 9,508 barrels of oil per day ("bopd"), within 2% of Q3 2021 guidance and 8% above Q2 2021 production of 8,839 bopd, under constrained production levels;
  • Generated record daily oil production of 16,140 barrels on September 24, 2021, demonstrating PetroTal's ability to handle increased fluid levels, in advance of CPF-2 final commissioning;
  • Attained payback on the recently drilled well ("8H") in approximately 40 days from completion;
  • Commenced drilling well 9H on September 23, 2021, PetroTal's longest reach horizontal well to date. The well is estimated to cost approximately $15.5 million with first production estimated in early December 2021;
  • Q4 2021 production guidance is now revised to approximately 12,500 bopd due to a drilling delay for 9H that required a sidetrack resulting from recalibration and optimization of the new synthetic mud system;
  • Current average production is approximately 11,775 bopd, over the five days ending November 16, 2021;
  • Updated 2021 EBITDA(1) guidance is between $105 - $110 million for 2021, up materially from the original 2021 $90 million budget and includes deferred 9H production into 2022, along with timing delays in the realization of the positive true-up revenue from the Petroperu operated North Peruvian Pipeline ("ONP") sales at the Bayovar Port;
  • Achieved continued net income for the sixth consecutive quarter, $15.0 million in Q3 2021, approximately 32% above Q2 2021 net income of $11.4 million, as a result of higher oil production, higher oil prices and derivative gains;
  • The Company has outlined its intended capital allocation strategy for the next five years and is prioritizing continued field development and debt repayment followed by dividends and or share buybacks thereafter; and,
  • PetroTal continues to play a key role as liaison between the communities and the Peruvian government towards a revised social profit contract that, upon ratification, is expected to lead to overall community support.

(1) For a description of EBITDA, see Reader Advisories - Non-GAAP Measures below.

Q3 2021 Webcast conference call

The Company will be hosting a conference call on November 18, 2021 at 9:00am Houston time. The link for the live webcast is below:

https://webcasting.brrmedia.co.uk/broadcast/6182aaa429c8b82a5a020583

Selected Financial Highlights

Three Months Ended Nine Months Ended
(in thousands USD) Sept 30, 2021 Sept 30, 2020 Sept 30, 2021 Sept 30, 2020
Financial
Crude oil revenues $ 44,781 $ 6,933 $ 119,946 $ 46,591
Royalties (2,604 ) (248 ) (6,658 ) (2,177 )
Net operating income 29,587 2,324 79,234 22,889
Commodity price derivative (income)/loss (293 ) (4,399 ) (18,658 ) 17,757
Net income (loss) 14,970 3,224 57,129 (12,199 )
Basic and diluted net income (loss)(US$/share) 0.02 0.00 0.07 (0.02 )
Capital expenditures 26,114 3,354 55,590 $ 35,982
Operating
Average production (bopd) 9,508 2,444 8,567 5,428
Average sales (bopd) 9,142 2,327 8,856 5,777
Average Brent price ($/bbl) 73.46 43.34 67.76 40.90
Contracted sales price, gross ($/bbl) 71.06 43.15 65.67 42.50
Netback ($/barrel)(1) 35.18 10.86 32.77 14.46
Funds flow provided by (used in) operations(1) 18,648 (5,588 ) 42,742 9,023
Balance sheet
Cash and restricted cash 57,655 9,788
Working capital 56,455 (30,407 )
Total assets 373,261 205,531
Current liabilities 69,785 62,355
Equity 195,572 126,253

 

Note:
(1) Funds flow provided by (used in) operations and netback do not have any standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures for other entities. See "Non-GAAP Measures".

Q3 2021 Selected Operational Highlights

Q3 2021 production guidance under restricted flow conditions early in quarter. Production averaged 9,508 bopd for Q3 2021 compared to guidance of 9,655 bopd and 8% above Q2 2021 production of 8,839 bopd. PetroTal currently has nine producing wells and two water disposal wells.

Commenced production of well 8H on September 4, 2021. The well was drilled and completed at a final cost of $11.8 million, 3% under revised budget, has produced over 400,000 bbls of oil in the first 60 days of production, and paid out in 40 days. The robust performance of the 8H well enabled PetroTal to meet Q3 2021 production guidance with the well delivering 7,700 bopd for 25 days in September 2021. This contributed materially in the quarter to offset the constrained production from pipeline disruptions that impacted PetroTal delivering into the ONP in July and August 2021.

New horizontal well 9H. PetroTal commenced drilling well 9H on September 29, 2021. The drilling operation is progressing well, however challenges encountered with the new mud system, required a sidetrack and a recalibration of the mud formula. The completion date of the well is delayed by approximately three weeks and the well cost increased by $1.7 million to approximately $15.5 million. The revised estimated completion date of the 9H well is now in early December 2021, pushing approximately 170,000 barrels of flush production into January 2022, and resulting in revised guidance for Q4 2021.

Revised Q4 2021 guidance. PetroTal has updated 2021 guidance as shown below, due to the 9H drilling delay and the slightly constrained production levels in November to match with barging availability and continued closure of the ONP. Additionally, capital expenditures will be lower due to COVID-19 limitations relating to worker capacity in the oil field, resulting in deferral of minor infrastructure projects into 2022.

2021 Guidance Summary New Previous Variance
Realized 2021 Brent Price ($/bbl) $71.80/bbl $67.30/bbl $4.50
2021 Production Range (bopd) 9,500 - 10,500 10,000 - 11,000 (500)
Q4 2021 Production (bopd) 12,500 - 13,500 16,000 - 16,500 (3,000) - (3,500)
2021 Exit Production (bopd) 15,000 - 16,000 17,000 - 18,000 (2,000)
Oil Wells Commenced 4 4 0
Oil Wells Completed 3 3 0
Net operating income $120 - $125 million $155 - $160 million ($30 - $35 million)
EBITDA $105 - $110 million $140 - $145 million ($30 - $35 million)
CAPEX $92.0 million $100 million ($8 million)

 

Sales and marketing update. One Brazilian export was concluded in Q3 2021 for approximately 226,000 barrels. The sale was processed during record low river levels, which constrained the barging activity in the quarter and delayed additional cargos. PetroTal anticipates an additional 300,000 - 350,000 barrels to be sold via the Brazilian route in Q4 2021. Access to the Brazil export route plays a key role in keeping production volumes stable during disruptions in ONP service.

CPF-2 entering final stages of completion. CPF-2 is in the final weeks of completion of the crude processing facility, along with increased water disposal system, and expects commissioning in mid January 2022.

Q3 2021 Selected Financial and Corporate Highlights

Continued strong liquidity position. PetroTal's overall liquidity position continues to be strong with a $57.7 million ($26.7 million restricted) ending total cash position at September 30, 2021 compared to $79.5 million ($25.4 million restricted) at June 30, 2021. Accounts receivable and payables increased in Q3 2021 to $26.0 and $40.6 million, respectively, from $20.1 and $38.6 million, respectively, in Q2 2021. Given PetroTal had additional capital spending intensity in Q3 2021 over Q2 2021, and payable balances remained relatively flat, this demonstrates that the Company used less vendor financing in Q3 2021 compared to previous quarters. PetroTal reported net debt of approximately $53.2 million for bond covenant purposes which corresponded to a 0.54x Net Debt to EBITDA ratio as at September 30, 2021, significantly below the bond covenant maximum.

Realized revenue. Strong Brent levels in Q3 2021 resulted in revenue after differentials and transportation fees of $44.8 million ($53.24/bbl), an increase of 5% over $42.8 million ($53.20/bbl) in Q2 2021.

Continued robust Net Operating Income ("NOI"). PetroTal generated $29.6 million ($35.18/bbl) of NOI in the quarter, flat over Q2 2021, due to higher realized Brent prices and increased oil production, offset by higher diluent and barging costs.

Operating costs. Operating costs increased quarter over quarter to $12.6 million ($14.97/bbl) for Q3 2021 from $10.8 million ($13.45/bbl) in Q2 2021 due to increased barging storage costs from the temporary pipeline pump station closure. In addition, diluent and diesel costs continued to increase in conjunction with Brent oil price.

Capital expenditures ("CAPEX"). Capital expenditures for Q3 2021 totaled $26.1 million, up 17% from Q2 2021 of $22.1 million as a result of additional drilling activity. Approximately 70% of Q3 2021 capital expenditures were drilling related as the Company drilled and completed well 8H, implementing the latest autonomous inflow control device technology for its completion. Necessary modifications to the water disposal system were completed in Q3 2021 and the field can now actively dispose of approximately 80,000-100,000 barrels of water per day with direct line connections to disposal wells now in place. Year to date capital expenditures were $55.6 million, approximately $20 million below guidance due to well 9H having a delayed start from additional water disposal optimization work in Q2 2021, and certain other minor infrastructure projects deferred into Q4 2021 and Q1 2022. Q4 2021 has a revised estimated Capex of approximately $36 million compared to previous guidance of $44 million.

Positive free cash flow generation year to date. PetroTal is pleased to announce it generated $6.0 million in free cash flow for the nine months year to date in 2021 (before changes in working capital and after capex, interest and factoring costs). The Company expects to end 2021 in a free cash flow neutral position pivoting to a substantial and ongoing free cash flow generation profile in 2022 and beyond.

Continued net income. Net income for Q3 2021 was $15.0 million versus $11.4 million in Q2 2021. Based on low depletion charges from $210 million invested in the Bretana asset since 2018, favorable commodity prices and a strong operating cost structure, continued positive earnings are anticipated. This is the sixth straight quarter of net income for PetroTal which positions it well, from a retained earnings perspective, to adopt a robust future return of capital policy.

Derivative asset. As at September 30, 2021, 3.1 million barrels of oil have been sold into the ONP and remain in the pipeline or storage tanks awaiting final sale by Petroperu. This has generated an estimated $38.1 million derivate asset as at September 30, 2021, which will be realized as true-up proceeds when these barrels reach the Bayovar Port and sold by Petroperu.

Hedging update. At September 30, 2021, and from October 2021 until June 2022 PetroTal has approximately 1.5 million barrels hedged corporately, at prices ranging between $60 and $70/bbl Brent. The 2022 hedges represent approximately 25% of H1 2022 forecast production and use put options allowing PetroTal to realize further Brent upside in 2022.

Q3 2021 Other Selected Highlights

Free cash flow(1) allocation intention. Based on continued robust commodity prices, PetroTal anticipates material free cash flow over from Bretana over the next three to five years. The free cash flow allocation strategy most beneficial to shareholders is to first reduce debt when a prudent cash window in mid to late 2022 presents itself. Upon elimination of the Company's debt burden, PetroTal intends to implement a dividend and/or share buyback strategy late in 2022 as cash balances are anticipated to grow substantially.

(1) For a description of free cash flow, see Reader Advisories - Non GAAP Measures below.

ONP pump stations update. PetroTal advises that pump station 5 has not yet resumed operations and pump station 1 has recently been shut down as the Indigenous protests escalate. Currently PetroTal is still able to continue producing due to the availability of the Brazilian sales route, however, if the protests persist beyond November 30, 2021, production will have to be curtailed. Peruvian government representatives are currently discussing a peaceful resolution.

Community relations update. In an effort to facilitate alignment between government and community, PetroTal has taken the initiative and submitted a proposal to the Peruvian Ministry of Energy and Mines as well as PeruPetro, outlining a new proposed Social Fund ("The Fund") which will require a modification of the existing license contract for Block 95. The Fund aims to promote investments so the Loreto Region can once again produce over 100,000 bopd. Highlights are as follows:

  • The Fund will be based on 2.5% of crude oil production, calculated using the same methodology as PeruPetro applies for royalty purposes;
  • A trust will be created to ensure transparent use of the funds into the local communities, for the benefit of all and without discrimination; and,
  • The trust will be audited by an independent agency.

The Fund should entitle PetroTal to:

  • A 10 year increase to the license term;
  • Fewer social disruptions for smoother production operations; and,
  • Better alignment on long term production goals, growth, and development plans by the Peruvian government, communities, and PetroTal shareholders.

In addition to The Fund, PetroTal is also promoting that one fifth of the Canon, which is equivalent to approximately 18.75% of the value of the production that goes to the Loreto Region, be redistributed to the producing districts. To accomplish this, the current Canon distribution law for the Loreto Region will need to be updated. The outcome will allow the respective local municipalities, where production originates, to receive much higher amounts of Canon allowing them to increase their budgets at least tenfold.

Updated Corporate Presentation. Please see PetroTal's website for an updated version.

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

"We are pleased to report another strong quarter from both technical and financial perspectives. During the quarter, our operational team delivered a near record setting well in 8H allowing PetroTal to achieve a record daily field production high of 16,140 bopd, a level previously unseen at PetroTal. We also demonstrated operational excellence by testing our facilities at full capacity of fluid volumes with great results. The 9H drill is proceeding nicely with continued learning and operational calibration for the synthetic mud system. From a commercial perspective, we continue to successfully navigate social headwinds demonstrating leadership with initiatives that are proving valuable in H2 2021 and should provide a lasting and more stable alignment between the Government and communities."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) 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 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 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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / James Spinney / Robert Collins
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
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, including the Company's five year plan and the anticipated benefits thereof; future consolidation activity and organic growth; future intentions with respect to debt reduction and return of capital to shareholders, including dividends and share buybacks; drilling, completions, workovers 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; the ability of the Company to achieve near term production targets; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup; startup plans for oil and water treatment infrastructure, including the timing of startup plans and the impact of delays thereon; oil production levels, including average production and exit production in 2021; the 2021 capital program and budget, including drilling plans; expectations regarding accrued drilling costs on deferred wells and allocation of flush production benefits; the timing of river embankment erosion work; COVID-19 surveillance and control process; hedging program, the terms thereof, and the Company's expectations regarding its hedged positions; cargo loading and shipments, including the timing of loading and shipping and expectations regarding sales from cargo shipments; the Company's expectations regarding net operating income, netbacks and free cash flow; the Company's long-term sustainability objectives and targets, and the timing thereof; the Company's proposals for continuous investment in the energy sector and collaboration with local communities; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. Without limitation of the foregoing, future dividend payments, if any, and the level thereof, is uncertain, as the Company's dividend policy and the funds available for the payment of dividends from time to time is dependent upon, among other things, free cash flow financial requirements for the Company's operations and the execution of its growth strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of PetroTal to pay dividends will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness. 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, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 MD&A and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as EBITDA, netback, funds flow provided by (used in) operations and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. EBITDA is calculated as consolidated net income (loss) before interest and financing expenses, income taxes, depletion, depreciation and amortization adjusted for certain non-cash, extraordinary and non-recurring items primarily relating to unrealized gains and losses on financial instruments and impairment losses. PetroTal utilizes EBITDA as a measure of operational performance and cash flow generating capability. EBITDA impacts the level and extent of funding for capital projects investments. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Funds flow provided by operations, is a non-GAAP measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital. A reconciliation from cash provided by operating activities to funds flow provided by operations is included in the MD&A.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's five year plan, debt reduction, dividends and share buybacks; prospective results of operations, production and production capacity, 2021 capital program and budget, free cash flow, liquidity 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 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/104110


PetroTal Announces Exercise of Investor Warrants and Total Voting Rights

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - October 26, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") announces that it received a notice to exercise 2,352,941 Investor Warrants over 2,352,941 Common Shares at a price of 16 pence per Common Share from an investor in relation to the Investor Warrants issued as part of the fundraising announced by the Company on June 12, 2020.

Accordingly, PetroTal has received £376,420 for the warrant exercise, and has issued 2,352,941 new Common Shares ("Warrant Shares") to the investors. Subsequent to the warrant exercise, the Company will have 66,749,055 Investor Warrants outstanding.

Application will be made for admission of the 2,352,941 Warrant Shares, which will rank pari passu with existing Common Shares, to trading on AIM ("Admission"). It is expected that the Admission will become effective, and trading will commence at 8.00 am on October 29, 2021.

Following Admission, the Company will have 825,667,172 Common Shares issued and there are no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) 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. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; continued operation of the ONP and PetroTal's access thereto, the Company's expectations regarding netbacks and free cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

RESERVES DISCLOSURE: The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell Associates, Inc., a qualified independent reserves evaluator, with an effective date of December 31, 2020 (the "NSAI Reserves Report"). The NSAI Reserves Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51 101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"). The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Volumes of reserves have been presented based on the Company's total working interest. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each category. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

TYPE CURVES: Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve, based on methodology that is analogous to wells with similar geological features. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells. Additional details on well performance and management's type curves are available in the presentation on PetroTal's website at www.petrotal-corp.com.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as operating netback and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures. Please refer to the most recent management's discussion and analysis for additional information relating to non-GAAP measures.

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 well payout production, 2021 capital program and budget, free cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/100822


PetroTal Issues Equity Vested Through PSU Plan and TVR

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - October 15, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") announces that the Company has issued an aggregate of 3,103,716 Common Shares to employees (including 1,645,267 shares to a person discharging managerial responsibilities ("PDMR's") pursuant to the obligation to annually issue vested performance share units ("PSUs")) to acquire Common Shares under the Company's performance and restricted share unit plan, as approved by the TSX Venture Exchange on December 12, 2019.

Further details regarding the PSU plan are set out in the management information circular of the Company dated May 19, 2021 which is available on SEDAR at www.sedar.com.

Admission to Trading on AIM/TSXV and Total Voting Rights

Application will be made to the London Stock Exchange for the admission of 3,103,716 Common Shares to trading on AIM ("Admission") and to the TSXV for listing of 3,103,716 Common Shares for trading on the facilities of the TSXV. It is expected that Admission will become effective at 8.00 a.m. on or around October 21, 2021. Following Admission, the Company will have 823,309,231 Common Shares issued and there are no shares held in treasury. For purposes of the Disclosure Guidance and Transparency Rules, the total number of voting rights in the Company is 823,309,231 Common Shares. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) 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. In early 2020, PetroTal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; continued operation of the ONP and PetroTal's access thereto, the Company's expectations regarding netbacks and free cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

RESERVES DISCLOSURE: The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell Associates, Inc., a qualified independent reserves evaluator, with an effective date of December 31, 2020 (the "NSAI Reserves Report"). The NSAI Reserves Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51 101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Volumes of reserves have been presented based on the Company's total working interest. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each category. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

TYPE CURVES: Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve, based on methodology that is analogous to wells with similar geological features. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells. Additional details on well performance and management's type curves are available in the presentation on PetroTal's website at www.petrotal-corp.com.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as operating netback and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures. Please refer to the most recent management's discussion and analysis for additional information relating to non-GAAP measures.

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 well payout production, 2021 capital program and budget, free cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/99760


PetroTal Announces Q3 2021 Operations and Liquidity Update

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - October 13, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") announces an operations and liquidity update for Q3 2021, and updates on the ongoing community protests at pump station 5. All amounts herein are in United States dollars ("USD") unless otherwise stated.

Highlights:

  • Q3 2021 production averaged 9,508 barrels of oil per day ("bopd"), within 2% of previous guidance;
  • Q3 2021 exit production (last 7 day average in quarter) was 15,131 bopd, an increase of 89% over Q2 2021;
  • October 1 to October 11, 2021, average production of 14,218 bopd;
  • Well 8H has achieved payout in under 40 days on its $11.8 million capital cost, with continued robust average production of 7,485 bopd in Q4 2021 to date;
  • Well 7D continues to deliver strong production above 1,300 bopd, having achieved two times payout to date;
  • Well 9H drilling continues without delays, with first oil estimated in mid November 2021;
  • Water disposal maintenance efforts were completed and will have long term field optimization benefits;
  • Brazil route to market sales option proving viable, with PetroTal executing an export of 226,000 barrels in Q3 2021;
  • Strong liquidity position maintained, with total liquidity of $58 million as at September 30, 2021; and,
  • PetroTal taking proactive initiatives to resolve recent pump station 5 disputes between the local community and government.

Q3 2021 Production

PetroTal averaged oil production of 9,508 bopd for Q3 2021. This was within 2% of revised Q3 2021 guidance of 9,697 and an 8% increase over Q2 2021 average production of 8,839 bopd. PetroTal exited Q3 2021 producing 15,131 bopd, an 89% increase over exit Q2 2021 production of 8,009 bopd. Q4 2021 production to date is 14,218 bopd, inclusive of approximately 5.4% of usual downtime.

Well 8H Update

Well 8H continues to perform at exceptional levels. During the first 11 days of October, 8H has averaged 7,485 bopd. As of October 11, 2021, the 8H well has produced over 290,000 barrels at an estimated $45/bbl netback and has now achieved payout on its $11.8 million capital cost.

Well 7D Update

Well 7D continues to exceed management expectations from a deviated drilling perspective. 7D is still averaging more than 1,300 bopd. Since commencement of production in early May 2021, 7D has produced approximately 400,000 barrels and has generated cash flow approximately double its capital cost since coming online five months ago.

Well 9H Update

Well 9H has reached its third week of drilling, is executing to plan, and trending slightly ahead of completion schedule with production commencement expected in the last half of November 2021.

CPF-2 On Track

The final crude processing phase for CPF-2 will be commissioned and operational by mid November 2021. It is expected to be fully operational by mid January, 2022. No additional COVID-19 delays have materially impacted the field since previously announced in late summer.

Brazil Route Proving Valuable

PetroTal executed an oil shipment through Brazil in Q3, 2021 for 226,000 barrels. PetroTal estimates it may ship two cargos via the Atlantic route in Q4 2021.

Strong Q3 2021 Exit Liquidity

At September 30, 2021, PetroTal had a cash position of approximately $58 million, of which $31 million is unrestricted, $20 million is dedicated to accretive acquisitions and $7 million is posted as collateral for commodity price hedges. The $16 million reduction in overall liquidity was due to increased spending related to the planned capex program and a net increase in accounts receivable.

At September 30, 2021, accounts receivable from current oil sales, including VAT, were $22 million, and accounts payable were approximately $37 million. Pursuant to contractual terms with suppliers, approximately $3.7 million (11%) of the accounts payable balance is due after Q4 2021. Ongoing payments will be managed from expected oil field revenues and internal cash resources. The Company maintains access to an additional $25 million from the bond issue for potential acquisitions and development drilling.

Community Protest Update

Protests at pump station 5 have shut down the Northern Peruvian Pipeline ("ONP") and operations on October 5, 2021. Since then, PetroTal has been involved with both the government and communities to help resolve the issue peacefully.

PetroTal supports the struggle of the indigenous community and continues to promote a peaceful and long-lasting resolution in the very near future, especially given the new Government's public commitment to all the communities of the Loreto Region where the Company operates.

In the meantime, PetroTal continues to produce at normal rates, delivering oil to Station 1 plus exports through Brazil, and expects to have sufficient oil storage to maintain operations during the disruption at Petroperu's pipeline.

Updated Corporate Presentation. Please see PetroTal's website for an updated version.

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

"On behalf of PetroTal, I would like to thank all our employees and contractors for another outstanding quarter. We are continuously reminded that alignment between the government, communities, and PetroTal ensures an efficient continuance of PetroTal's value proposition. PetroTal continues to support negotiations between local communities and government social profit initiatives. We are optimistic all stakeholders will find resolutions in short order."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTC Pink: PTALF) 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. In early 2020, PetroTal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; resumption of operation of the ONP and the timing thereof; PetroTal's access to exports routes through Brazil; the Company's expectations regarding netbacks and cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

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 ("NI 51 101"). All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as netback that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production and well payout production, 2021 capital program and budget, cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/99425


PetroTal Announces Exercise of Investor and Performance Warrants and Total Voting Rights

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - October 8, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") announces that it received a notice to exercise 1,000,000 Investor Warrants over 1,000,000 Common Shares at a price of 16 pence per Common Share from an investor in relation to the Investor Warrants issued on June 12, 2020 as part of the fundraising announced on June 12, 2020.

In addition, PetroTal received notice to exercise 668,650 Performance Warrants at a price of $0.1869 USD per Common Share.

Accordingly, PetroTal received 160,000 GBP and 124,970 USD, respectively, for both of the Warrant Exercises, and issued a total of 1,668,650 new Common Shares ("Warrant Shares") to the investors. Subsequent to both warrant exercises, the Company will have 69,101,946 Investor Warrants and 25,081,350 Performance Warrants outstanding.

Application will be made for admission of the 1,668,650 Warrant Shares, which will rank pari passu with existing Common Shares, to trading on AIM ("Admission"). It is expected that Admission will become effective, and trading will commence at 8.00 am on October 13, 2021.

Following Admission, the Company will have 820,205,515 Common Shares issued and there are no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTC Pink: PTALF) 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. In early 2020, PetroTal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; continued operation of the ONP and PetroTal's access thereto, the Company's expectations regarding netbacks and free cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

RESERVES DISCLOSURE: The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell Associates, Inc., a qualified independent reserves evaluator, with an effective date of December 31, 2020 (the "NSAI Reserves Report"). The NSAI Reserves Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51 101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Volumes of reserves have been presented based on the Company's total working interest. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each category. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

TYPE CURVES: Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve, based on methodology that is analogous to wells with similar geological features. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells. Additional details on well performance and management's type curves are available in the presentation on PetroTal's website at www.petrotal-corp.com.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as operating netback and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures. Please refer to the most recent management's discussion and analysis for additional information relating to non-GAAP measures.

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 well payout production, 2021 capital program and budget, free cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/98985


PetroTal Announces the 30 Day Initial Production Rate for Well 8H at over 7,700 bopd

PetroTal updates on 2022 hedging, and social initiatives

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - October 5, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") is pleased to announce the 30-day initial production rate of over 7,700 barrels of oil per day ("bopd") for well BN-8H ("8H"). All amounts herein are in United States dollars ("USD") unless otherwise stated.

Significant 30 day initial production rate for well 8H

  • Well 8H delivered over 7,700 bopd average production during its first 30 days of operation, with the most recent rate at 7,575 bopd;
  • As of October 3, 2021, during its first 30 days of operation, the well has produced 231,000 bbls;
  • Well 8H is outperforming management expectations; and,
  • Based on the 8H well's ongoing performance and an expected $45/bbl oil netback, the 8H well should pay out in approximately 45 days, overall.

Backstopping 2022 cash flow with additional hedging

  • PetroTal is also pleased to announce it has entered into additional put options with strike prices of $70/bbl Brent oil for approximately 25% of the H1 2022 management production profile.

Government and local community alignment update

  • PetroTal continues to play a key role in bridging communication efforts between the government and local residents by promoting some of their key initiatives directly into the community; and,
  • In order to create alignment with all stakeholders, PetroTal's efforts include local labor allocation, financial support to develop sustainable projects, and intellectual resources to execute on those local projects.

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

"Well 8H is an example of a fantastic well performing at the most opportune time of the year, and it has also provided a wealth of reservoir data. We aim to continue delivering this type of operational quality in the future. PetroTal is also pleased to represent an important liaison in ongoing community and government social agenda matters, promoting some of their key initiatives such as Social Profitability under a fair and just distribution of the central and regional government's fiscal share."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) 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. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; continued operation of the ONP and PetroTal's access thereto, the Company's expectations regarding netbacks and free cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

RESERVES DISCLOSURE: The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell Associates, Inc., a qualified independent reserves evaluator, with an effective date of December 31, 2020 (the "NSAI Reserves Report"). The NSAI Reserves Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51 101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Volumes of reserves have been presented based on the Company's total working interest. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each category. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

TYPE CURVES: Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve, based on methodology that is analogous to wells with similar geological features. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells. Additional details on well performance and management's type curves are available in the presentation on PetroTal's website at www.petrotal-corp.com.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as operating netback and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures. Please refer to the most recent management's discussion and analysis for additional information relating to non-GAAP measures.

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 well payout production, 2021 capital program and budget, free cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/98569


PetroTal Announces Drilling Commencement of Well BN-9H and Continued Robust Field Production over 15,000 bopd

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - September 29, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") is pleased to announce it has commenced drilling development well BN-9H ("9H"), the Company's next horizontal well, and continued robust field production in excess of 15,000 barrels of oil per day ("bopd"). All amounts herein are in United States dollars ("USD") unless otherwise stated.

Well 9H drilling commencement

PetroTal recently commenced drilling the 9H well, PetroTal's fifth horizontal well drilled by the Company, and the tenth oil producer.

  • This will be PetroTal's longest reach horizontal well to date;
  • The well cost is approximately $13.9 million and is the first to be drilled with a synthetic mud system;
  • Drilling and completion should be finished in the second half of November 2021; and
  • The well is expected to contribute materially to exit 2021 production.

Bretana field continues to achieve robust field production

  • Bretana's average field production for the ten days ended September 27, 2021 was 15,494 bopd;
  • Demonstrates success of the revised water disposal strategy, allowing full water disposal into the two disposal wells;
  • Using an $80/bbl Brent oil price and PetroTal's estimated EBITDA netback of approximately $47/bbl, annualized earnings before interest, taxes, depreciation and amortization ("EBITDA") at 15,000 bopd would be approximately $255 million; and
  • This expected significant EBITDA growth will easily allow PetroTal to complete the remaining Bretana development wells, retire the bond obligations early and examine ways to return value to shareholders, in due course.

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

"We are entering the fourth quarter in the strongest position PetroTal has seen, from both an operational and financial perspective. The recent rise in Brent oil prices has created an environment for substantial returns on invested capital and we look to continue our momentum into Q4 2021, and beyond. PetroTal is showing it is well positioned as a dynamic emerging market play, given our strategic investment in Peru's Bretana field, that is delivering strong results."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) 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. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; continued operation of the ONP and PetroTal's access thereto, the Company's expectations regarding netbacks and free cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

RESERVES DISCLOSURE: The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell Associates, Inc., a qualified independent reserves evaluator, with an effective date of December 31, 2020 (the "NSAI Reserves Report"). The NSAI Reserves Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51 101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Volumes of reserves have been presented based on the Company's total working interest. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each category. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

TYPE CURVES: Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve, based on methodology that is analogous to wells with similar geological features. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells. Additional details on well performance and management's type curves are available in the presentation on PetroTal's website at www.petrotal-corp.com.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as operating netback and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures. Please refer to the most recent management's discussion and analysis for additional information relating to non-GAAP measures.

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 well payout production, 2021 capital program and budget, free cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/97946


PetroTal Announces Completion of 8H Horizontal Well with Record Production of Nearly 8,000 Barrels of Oil per Day

Bretana oil field production surpasses 2019 highwater mark

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - September 15, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") has completed the BN-8H ("8H") well, PetroTal's fourth horizontal well in the Bretana oil field.

Bretana field achieves record production of approximately 15,400 bopd

PetroTal commenced production of its fourth horizontal well 8H on September 4, 2021 with unrestricted flow rates of approximately 7,600 barrels of oil per day ("bopd") over a ten-day period. Selected highlights are as follows:

  • Initial 8H production rates of 7,500 - 8,000 bopd; and,
  • Total current field production is now approximately 15,400 bopd, a record production level for PetroTal.

Completion of well 8H below budget

  • The 8H well cost came in 3% under budget, at US$11.8 million;
  • 8H estimated payout of 8-10 weeks production based on current Brent oil strip, assuming unrestricted rates;
  • Well 8H targeted oil sand intersected 4 meters higher than prognosed; and,
  • The horizontal section of the 8H well was completed with autonomous inflow control device technology ("AICD"), which will better control water influx.

North Peruvian Pipeline ("ONP") Update

PetroTal was able to achieve record field production rates at Bretana due to the ONP being operational again, allowing the Company to unload the approximately 140,000 barrels of oil stored in barges at Pump Station No.1. The ability to store oil in barges combined with back-to-back exports to Brazil and deliveries at the Iquitos Refinery have proven PetroTal's ability to manage ONP disruptions.

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

"The initial flow rates from well 8H are very exciting and echo the profile of the prolific 5H horizontal well. Similarly, the clean sands of the 8H well reflect what we have observed in the recently drilled 7D well and the cores obtained in the 3WD water disposal well. It is also rewarding that we have now achieved a new record field production level of 15,400 bopd. The flush production seen from 8H is being monetized into some of the highest Brent oil price markets we have seen all year, providing a significant cash flow impact. Over the next few weeks, we expect to commence drilling the next horizontal well ("BN-9H") in our 2021 campaign. On behalf of PetroTal, I would like to take this opportunity to thank Prime Minister Guido Bellido and the Minister of Energy and Mines, Ivan Merino Aguirre, for responding to the ONP communities' concerns with in-person negotiations to resolve the matter quickly and peacefully that allowed us to achieve this new record production."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) 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. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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; oil production levels, well payout production and the ability of the Company to achieve near term production targets; anticipated future production and revenue; continued operation of the ONP and PetroTal's access thereto, the Company's expectations regarding netbacks and free cash flow; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 most recent management's discussion and analysis and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

RESERVES DISCLOSURE: The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell Associates, Inc., a qualified independent reserves evaluator, with an effective date of December 31, 2020 (the "NSAI Reserves Report"). The NSAI Reserves Report has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51 101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Volumes of reserves have been presented based on the Company's total working interest. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each category. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

TYPE CURVES: Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve, based on methodology that is analogous to wells with similar geological features. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells. Additional details on well performance and management's type curves are available in the presentation on PetroTal's website at www.petrotal-corp.com.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as operating netback and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures. Please refer to the most recent management's discussion and analysis for additional information relating to non-GAAP measures.

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 well payout production, 2021 capital program and budget, free cash flow 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/96552


PetroTal Announces Q2 2021 Financial and Operating Results

PetroTal completes 8th producing well, increases water disposal capacity, and outperforms Q2 2021 production guidance under restricted flow conditions

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - August 26, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce its financial and operating results for the six ("H1") and three months ("Q2") ended June 30, 2021.

Selected financial and operational information is outlined below and should be read in conjunction with the Company's unaudited consolidated financial statements ("Financial Statements"), and management's discussion and analysis ("MD&A") for Q2 2021, which are available on SEDAR at www.sedar.com and on the Company's website at www.PetroTal‐Corp.com. All amounts herein are in United States dollars ("USD") unless otherwise stated.

Highlights:

  • Outperformed Q2 2021 production guidance by 2% and Q1 2021 production by 21%, delivering 8,839 bopd under constrained production conditions, as previously described in the Company's July 20, 2021 RNS;
  • Generated a significant increase in revenue of $42.8 million ($53.20/bbl) in Q2 2021 versus $32.4 million ($41.91/bbl) in Q1 2021;
  • Achieved record netback and net operating income in Q2 2021 of $36.88/bbl and $29.7 million, respectively;
  • Operating and direct transportation costs in Q2 2021 were $10.8 million ($13.45/bbl) as compared to $10.6 million ($13.78/bbl) in Q1 2021;
  • Generated free cash flow(1), before leverage and working capital adjustments, in Q2 2021 of $2.4 million and in H1 2021 of $11.5 million, a record for the Company;
  • Strong liquidity position, building total cash quarter over quarter to over $79.5 million as at June 30, 2021 up 5% from March 31, 2021. $25.4 million of total cash is restricted;
  • Net income of $11.4 million for the quarter, demonstrating an efficient operating cost structure, attractive capital base, and supportive fiscal terms;
  • All Q2 2021 bond covenants met with substantial headroom. The Company exited Q2 2021 with a 0.41x leverage ratio which included $40.6 million of net debt calculated per the bond indenture;
  • Continued to de-risk commodity price exposure that brings the total corporate hedge percentage to 44% for the remaining four months of 2021 forecast production, protecting prices of $60/bbl Brent;
  • Necessary modifications to the water disposal system are ongoing. The field can now actively dispose of approximately 80,000 barrels of water per day ("bwpd") and 100,000 bwpd when the modifications are completed in September;
  • Achieved payback on well 7D, approximately 2.5 months post completion;
  • Current constrained production is 8,513 bopd (last seven-day average to August 20, 2021). Unrestrained production is expected to be restored in September;
  • Revised H2 2021 production guidance as a result of a rescheduled and deferred drilling program stemming initially from the COVID-19 protocol's impact and from the water disposal well drilling delays. The 2021 average production range is now guided at 10,000 to 11,000 bopd (from 11,000 - 12,000 bopd). Exit December 2021 production has been slightly revised down to 17,000 - 18,000 bopd (from 18,000 - 19,000 bopd), as the impact of the BN-10H well won't be incorporated until early next year;
  • Updated 2021 EBITDA(1) guidance is between $140 - $145 million for 2021, up materially from the original 2021 $90 million budget;
  • Successfully drilled BN-8H subsequent to the quarter end which is now being completed, and expected to be on time and under budget;
  • Demonstrated importance of an expanded oil marketing strategy with two scheduled Brazilian cargos contracted subsequent to the quarter end;
  • Enhanced the Company's long-term sustainability vision by establishing distinct objectives and performance measurements; and,
  • Advanced government and community relations, ratifying the process of social profit share in nearby communities around PetroTal's oil operations.(1) For a description of EBITDA and free cash flow, see Reader Advisories - Non-GAAP Measures below.

     

Q2 2021 Webcast conference call

The Company will be hosting a conference call on August 26, 2021 at 9:00am Houston time. The link for the live webcast is below:

https://webcasting.brrmedia.co.uk/broadcast/6113a8920ddc2b060ef52b06

Selected Financial Highlights

 

Three Months Ended Six Months Ended
(in thousands USD) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Financial
  Crude oil revenues $ 42,809 $ 7,413 $ 75,165 $ 39,658
  Royalties (2,306) (123) (4,054) (1,929)
  Net operating income 29,678 2,756 49,647 20,565
  Commodity price derivative (income)/loss 4,147 (18,264) (18,365) 22,156
  Net income (loss) 11,374 16,029 42,159 (15,423)
  Basic and diluted net income (loss)(US$/share) 0.01 0.02 0.05 (0.02)
  Capital expenditures 22,363 8,756 29,476 $ 32,628
Operating
  Average production (bopd) 8,839 4,185 8,089 6,936
  Average sales (bopd) 8,842 4,729 8,711 7,521
  Average Brent price ($/bbl) 68.83 29.19 64.28 39.67
  Contracted sales price, gross ($/bbl) 66.55 27.30 62.79 42.40
  Netback (US$/barrel) 36.88 6.40 31.49 15.02
  Funds flow provided by (used in) operations 19,627 15,337 24,094 14,611
Balance sheet
  Cash and restricted cash 79,491 20,379
  Working Capital 62,634 (31,845)
  Total assets 359,788 216,899
  Current liabilities 72,639 76,932
  Equity 180,291 122,789

Note:
(1) Funds flow provided by (used in) operations and netback do not have any standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures for other entities. See "Non-GAAP Measures".


Q2 2021 Selected Operational Highlights

Completed the 7D well on April 30, 2021. The well was drilled and completed at a revised final cost of $7.6 million, or 17% below budget. Shortly after completion the well achieved rates in excess of 4,500 bopd, is performing well above type curve expectations, and has achieved payback in 2.5 months.

Commenced drilling and coring of the 3WD (water disposal) well. PetroTal commenced drilling and coring of the 3WD well on May 3, 2021, which was completed subsequent to the quarter end on July 9, 2021. The overall operation and coring program on 3WD were a success, with two cores cut allowing for a more thorough oil in place estimate for the 2021 year-end reserves assessment. The completion of the 3WD well also increased water disposal capacity to 80,000 bwpd which provides enough capacity to achieve near term production targets.

Outperformed Q2 2021 production guidance under restricted flow conditions. Production averaged 8,839 bopd for Q2 2021 compared to guidance of 8,655 bopd. This was 2% above guidance, 21% above Q1 2021, and 111% above Q1 2020 levels which were impacted by the COVID-19 pandemic. Current field production is now 8,513 bopd. Production was largely constrained during the quarter and during the period subsequent due to operational delays on one of the water disposal booster pumps, thereby reducing water disposal rates. The water disposal modifications are still being completed and water disposal capacity has returned to an estimated 80,000 bwpd with water now being injected into both the 2WD and 3WD wells. A new 10" pipeline connection to the facility water tanks was also installed to increase water injection rates. When completed, total available water disposal capacity will be 100,000 bwpd.

Revised H2 2021 guidance. Due to the recent drilling delay, that pushes the impact of the BN-10H well to early next year, PetroTal has rescheduled its H2 2021 development drilling plan. As a result, PetroTal is now scheduled to bring two additional wells onstream in 2021 instead of the previously planned three. The third well is now expected onstream in January 2022. Accrued drilling costs on the deferred well will still materially be captured in Q4 2021, with January 2022 now receiving the flush production benefit instead of December 2021. Capital expenditures are still materially on budget at approximately $100 million for 2021.

2021 Guidance Summary New Original Variance
Average 2021 Brent Price ($/bbl) $67.30/bbl $50.00/bbl $17.30/bbl
2021 Production Range (bopd) 10,000 - 11,000 11,000 - 12,000 (0-1,000)
Q3 2021 Production (bopd) 9,500 - 10,000 11,500 - 12,500 (1,500-3,000)
Q4 2021 Production (bopd) 16,000 - 16,500 16,000 - 17,000 (0-500)
2021 Exit Production (bopd) 17,000 - 18,000 18,000 - 19,000 (1,000)
Oil Wells Commenced 4 5 (1)
Oil Wells Completed 3 4 (1)
EBITDA $140 - $145 million $90 million $50-$55 million
EBITDA Netback ($/bbl) $35.50/bbl $21.40/bbl $14.10/bbl

 

Completed drilling of BN-8H on August 18, 2021. The well was successfully drilled to a final depth of 4,200 meters as expected on August 18, 2021. A total of 1,137 meters of 6-1/8" horizontal section was drilled in very well-developed oil reservoir sands of the Vivian formation. Completion operations are currently ongoing on the BN-8H well and is on track for completion in early September. Post completion of BN-8H, the rig will commence drilling the next horizontal development well ("BN-9H") using a synthetic mud system with a larger diameter drill pipe.

CPF-2 commissioning rescheduled. Due to COVID-19 quarantine protocols, contractor personnel were removed from the field which delayed CPF-2 commissioning work. Startup is now rescheduled for late November and early December for the oil and water treatment infrastructure. The rescheduling is not expected to impact the ability for the field to handle new flush production rates.

Sales and Marketing update. The long-term Brazil export contract PetroTal signed in Q1 2021 is playing a key role in ensuring our ability to maintain oil production from any pipeline disruptions. Two ongoing back-to-back exports via Brazil have allowed us to maintain production during a recent social dispute that shut down Petroperu's ONP pump station one near Saramurillo, in late July 2021. The disruption is expected to be resolved shortly with pipeline operations restored thereafter. As part of PetroTal's new diversified marketing strategy, the Company was able to secure two back-to-back ~240,000 bbl cargo shipments to Brazil in Q3 2021 and sold FOB Bretana. Netbacks from these sales are competitive with the ONP, and PetroTal anticipates no sales disruptions due to the ONP closure. We are working diligently with Petroperu and the Peruvian Government, as well as Saramurillo's leaders, to provide assistance, as needed.

Q2 2021 Selected Financial and Corporate Highlights

Significant liquidity and working capital in hand. PetroTal continues to strengthen its liquidity position. Q2 2021 ending cash totaled $79.5 million, up $3.6 million from March 31, 2021 and up $59.1 million from June 30, 2020 due to proceeds from the Q1 2021 bond issuance. Current net working capital (defined as current assets less current liabilities) continues to show a strong position, ending Q2 2021 in a $62.6 million surplus position vs a $68.2 million surplus ending in Q1 2021. At June 30, 2021, accounts payable and accrued liabilities were approximately $38.6 million.

Record Net Operating Income ("NOI"). PetroTal generated a record $29.7 million ($36.88/bbl) of NOI in the quarter, an increase of $26.9 million over Q2 2020 and $9.7 million over Q1 2021, due to higher realized Brent prices and increased oil production.

Lower per barrel operating costs. Operating costs were flat quarter over quarter at $10.8 million for Q2 2021 versus $10.6 million for Q1 2021 despite the price of diluent increasing significantly in conjunction with the Brent oil price. On a per barrel basis, total operational costs were down 2% at $13.45/bbl in Q2 2021 versus $13.78/bbl in Q1 2021.

Strong royalty profile. Royalties for the quarter were $2.3 million or $2.87/bbl versus $1.7 million or $2.26/bbl in Q1 2021. The increase was due to higher realized Brent prices and higher production for Q2 2021.

Capital expenditures ("CAPEX"). Capital expenditures for Q2 2021 totaled $22.4 million, up 215% from Q1 2021 due to active drilling activity for the majority of the quarter versus little activity in Q1 2021. In total, year to date expenditures were $29.5 million which is $16.5 million below guidance due to the rescheduling of various facility and infrastructure projects into H2 2021. The CPF-2 completion and commissioning dates are now expected late in 2021.

Positive free cash flow generation in H1 2021. PetroTal is pleased to announce it generated record free cash flow in H1 2021 (before changes in working capital), with Q2 2021 contributing another $2.4 million to free cash flow in a drilling heavy quarter. H1 2021 funds flow from operations (before working capital adjustments) totaled $40.9 million, and after total capital expenditures of $29.5 million, resulted in a total of $11.5 million of free cash flow in H1 2021. This was due to robust H1 2021 Brent prices, deferred infrastructure projects into H2 2021 and favorable operating costs. PetroTal estimates that it will continue to generate free cash flow in H2 2021.

Continued positive Net Income. Net income for Q2 2021 was $11.4 million versus $16.0 million in Q2 2020 and $30.8 million in Q1 2021. Based on low cumulative capital of approximately $184 million invested in the asset since 2018, favorable commodity prices and a strong operating cost structure, continued positive earnings are anticipated. For Q2 2021, a $4.1 million derivative loss was realized versus $22.5 and $18.3 million derivative gains in Q1 2021 and Q2 2020, respectively.

Derivative Asset. PetroTal continues to recognize a material derivative asset on its balance sheet. At June 30, 2021, the Company recorded a $31.2 million derivative asset and a $1.4 million derivative liability versus a $39.7 million derivative asset at March 31, 2021 and a $22.5 million liability at June 30, 2020. When the Q1 2021 bond proceeds were received the derivative liability was extinguished and hedges were put in place on oil moving through the ONP. The difference between the Brent prices creating the extinguished liability and the prices at hedged strip created the derivative asset that the Company will continue to realize throughout H2 2021 and early 2022, as physical sales at the port of Bayovar occur by Petroperu. To date, the Company has realized a cash gain of $7.1 million in true up revenue with the remainder of production in the ONP secured by hedges to be received over the next 12 months.

Hedging Update. At June 30, 2021 the Company has outstanding corporate hedges on approximately 677,481 bbls in both put and synthetic put structures expiring from July to Dec 2021. On August 23, 2021 the Company layered in additional hedges totaling 304,626 bbls using a put structure with $60/bbl strike prices, bringing the percentage of hedged forecast volumes to 44% for September to December 2021. In partnership with Petroperu, the Company also has approximately 2.24 million barrels hedged in the ONP, with approximately 80% of barrels locked in between $60 and $62/bbl Brent and more recent hedges, totaling approximately 20% of barrels in the ONP, hedged at approximately $70/bbl Brent.

Strong Balance Sheet. PetroTal reported net debt of approximately $22.7 million as at June 30, 2021 as calculated for valuation purposes, which includes balance sheet derivatives and $40.6 million as calculated for bond covenants. For bond covenant purposes, the Q2 2021 net debt to adjusted EBITDA covenant was 0.41x against a maximum ratio of 3.0x leaving substantial buffer room to withstand potential commodity price volatility and / or accretive M&A transactions.

2020 Sustainability Report Long Term Vision

As previously announced, PetroTal's 2020 sustainability report is available on the Company's website. In addition, PetroTal is in the process of finalizing its long term sustainability objectives and targets for 2023, 2025, and 2030. Below, are the key components that summarize the long term vision:

Environmental Commitment - emissions, use of technology, climate impact, waste management, biodiversity, accident prevention.

Shared Values and Alignment - community alignment and commitment, supplier process, talent and community training and development.

Governance - Ethics management, risk management, human rights, inclusion, macroeconomic values.

Health and Safety - safety of employees, suppliers and contractors.

Detailed objectives have been drafted and set by management with measurement and outcomes currently being finalized and approved by the board of directors. Details will be available to investors on the PetroTal website in the coming quarters.

Recent Project Nomination. PetroTal is pleased to announce that it has been recognized as one of three companies in the oil and gas sector for its citizen socio environmental monitoring program (PROMOSAC). The formal document from the Ministry of Energy is now available here:
https://cdn.www.gob.pe/uploads/document/file/2069295/Programa%20de%20Reconocimiento%20CER%20_Julio2021.pdf.pdf

Community Relations Update. On August 10th, 2021, the Minister of Energy and Mines, Ivan Merino Aguirre, met with a delegation of PetroTal management that included Manolo Zuniga, CEO of PetroTal. Management presented various proposals that will promote continued investment in the energy sector and encourage collaboration between the Ministry and Company. The Company renewed its commitment to work directly with local communities in the Puinahua District of Bretana, to promote investment and training to further harmonize relations between operators. In turn, the Ministry offered assurances that social profitability and peace will be applied directly with community leaders from PetroTal's resource operations to avoid intermediaries and thereby reducing potential social conflict. The news article can be found here: https://bit.ly/2VziOgx

In addition, Manolo Zuniga, attended recent anniversary meetings with families and associates impacted by the violent social demonstration that occurred outside Bretana just over a year ago. The Company delegation offered families condolences, support, and assistance for remembrance and respect for the lives that were lost.

Updated Corporate Presentation. Please see PetroTal's website for an updated version.

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

"We are pleased to share our strong second quarter results which demonstrate continued operational success and resilience in the face of challenges. Our Q2 2021 results were strong, contributing to record net operating income, netbacks, and free cash flow in Q2 2021 and H1 2021 which we anticipate will continue in H2 2021. Despite the water disposal bottlenecks and drilling delays we slightly outperformed production guidance in Q2 2021. With the booster pump issue now fixed and new pipeline infrastructure being put in place we will be able to utilize full water disposal capacity. Wells BN-8H and 9H, on production in H2 2021, are anticipated to lift PetroTal's production to record levels. We are also again reminded that our battle with COVID-19 is not to be underestimated, as we experienced some CFP-2 installation delays which, fortunately should not impact the Company's ability to bring on new oil production in H2 2021. The Company continues to allocate appropriate capital to fighting the COVID-19 pandemic and make health and safety a top priority for all our employees and contractors."

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 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 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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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
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, completions, workovers 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; the ability of the Company to achieve near term production targets; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup; startup plans for oil and water treatment infrastructure, including the timing of startup plans and the impact of delays thereon; oil production levels, including average production and exit production in 2021; the 2021 capital program and budget, including drilling plans; expectations regarding accrued drilling costs on deferred wells and allocation of flush production benefits; the timing of river embankment erosion work; COVID-19 surveillance and control process; hedging program, the terms thereof, and the Company's expectations regarding its hedged positions; cargo loading and shipments, including the timing of loading and shipping and expectations regarding sales from cargo shipments; the Company's expectations regarding net operating income, netbacks, liquid net working capital and free cash flow; the Company's long-term sustainability objectives and targets, and the timing thereof; the Company's proposals for continuous investment in the energy sector and collaboration with local communities; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, 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 MD&A and the most recent annual information form which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that the such results should be considered to be preliminary.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in NI 51-101. All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

NON-GAAP MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as EBITDA, EBITDA netback, operating netback, funds flow provided by operations, liquid net working capital and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. EBITDA is calculated as consolidated net income (loss) before interest and financing expenses, income taxes, depletion, depreciation and amortization adjusted for certain non-cash, extraordinary and non-recurring items primarily relating to unrealized gains and losses on financial instruments and impairment losses. PetroTal utilizes EBITDA as a measure of operational performance and cash flow generating capability. EBITDA impacts the level and extent of funding for capital projects investments. EBITDA netback is calculated as EBITDA divided by the number of barrels sold in the period. The Company considers operating and EBITDA netbacks to be a key measure as they demonstrate Company's profitability relative to current commodity prices. Netback is calculated by dividing net operating income by barrels sold in the corresponding period. Funds flow provided by operations, is a non-GAAP measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital. A reconciliation from cash provided by operating activities to funds flow provided by operations is included in the MD&A. Liquid net working capital is a measure that includes cash, receivables, payables and short-term obligations. Free cash flow is operating cash flow before hedging minus maintenance capital expenditures.

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, 2021 capital program and budget, cash flow profile, free cash flow, liquidity 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 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/94443