PetroTal Announces Voting Results of Shareholders' Meeting

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - September 10, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") announces that all resolutions were duly passed by Shareholders at the Company's Annual General and Special Meeting held on September 9, 2020.

Resolution 9 related to authorizing the Board of Directors, at its discretion, to proceed with a potential consolidation of the Common Shares on the basis of a ratio of between four and eight pre-consolidation Common Shares for each one post-consolidation Common Share (the "Consolidation"). The Consolidation is subject to approval of the TSX Venture Exchange (the "TSXV"), which if received and the Board of Directors determines to proceed, the Consolidation will occur at a time determined by the Board and announced by a press release of the Company. The Company believes that the Consolidation, if implemented, will promote increased liquidity and reduced volatility in the trading of the Shares.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru with more than 10,000 bopd of production. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the reopening of the Bretana oil field and resumption of oil production therefrom; the effect and implementation of the Decree; and the ongoing effects of COVID-19 on the Company and its employees. All statements other than statements of historical fact may be forward‐looking statements. Forward‐looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to: expectations and assumptions concerning the reopening of existing infrastructure, its ability to deliver production and the anticipated capital expenditures associated therewith; successful implementation of the Decree; prevailing commodity prices and actual prices received for PetroTal's products; the availability and performance of drilling rigs, facilities, pipelines, inventory and barge storage capacity, other oilfield services and skilled labour; royalty regimes; exchange rates; the application of regulatory and licensing requirements; current legislation; the success of future drilling and development activities; and general economic conditions. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for the three and six months ended June 30, 2020 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/63521


PetroTal Provides Update on the Bretana Oil Field

Peruvian government announces Supreme Decree to increase funding to communities

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - September 9, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") expects and is ready to reopen the Bretana oil field as soon as the ongoing discussions between the communities and the Government of Peru have been ratified, which is expected in the next few days as reported by Government officials. PetroTal commends the efforts of all parties to reach a negotiated settlement that will ultimately benefit the communities, the Peruvian government, and all operating companies, including PetroTal.

On August 28, 2020, the Government of Peru announced a Supreme Decree ("Decree") approving the financial Gap Closure Plan within a number of provinces in northeast Peru, including Loreto, the area where PetroTal operates the Bretana oil field. PetroTal welcomes the announcement that the Decree provides for a six year financial commitment of approximately US$1.7 billion (6 billion soles) to the communities, of which US$46 million (162 million soles) will be designated for economic development of the localities over the next four months, by the Peruvian government. The Decree specifically addresses the local community participation criteria and takes steps to ensure that the funding process is properly monitored to ensure maximum benefit to the communities. The published Decree can be found at https://www.gob.pe/institucion/pcm/normas-legales/1124063-145-2020-pcm.

Since the announcement of the Decree, which PetroTal strongly supports, government and municipality representatives have been consulting with the community representatives on the Decree. After meeting with the Bretana community in the coming days, it is expected that PetroTal will restart oil production shortly thereafter.

In order to fully support the collective efforts of the communities and the government to reach an acceptable funding solution, PetroTal remains awaiting government agreements. PetroTal acknowledges the efforts at all levels of the Peruvian government to resolve the recent social disruption and to ensure a long term solution is in place to minimize future disruptions. Equally, the Company acknowledges the support received from the Bretana community.

Further updates on the reopening of the Bretana field and export of oil into the pipeline will be provided as and when appropriate.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru with more than 10,000 bopd of production. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the reopening of the Bretana oil field and resumption of oil production therefrom; the effect and implementation of the Decree; and the ongoing effects of Covid-19 on the Company and its employees. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to: expectations and assumptions concerning the reopening of existing infrastructure, its ability to deliver production and the anticipated capital expenditures associated therewith; successful implementation of the Decree; prevailing commodity prices and actual prices received for PetroTal's products; the availability and performance of drilling rigs, facilities, pipelines, inventory and barge storage capacity, other oilfield services and skilled labour; royalty regimes; exchange rates; the application of regulatory and licensing requirements; current legislation; the success of future drilling and development activities; and general economic conditions. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for the three and six months ended June 30, 2020 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/63466


PetroTal Announces Second Quarter 2020 Financial and Operating Results

Swift and effective cost reductions delivered savings that offset the oil field being shut in for most of Q2 2020, resulting in being operationally cash flow positive

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - August 17, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce its financial and operating results for the six and three months ended June 30, 2020 ("Q2 2020").

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 2020, which are available on SEDAR at www.sedar.com and the Company's website at www.PetroTal‐Corp.com. All amounts herein are in United States dollars ("US$") unless otherwise stated.

Q2 2020 HIGHLIGHTS

RESULTS AT A GLANCE

Six Months
Ended

June 30, 2020
Six Months
Ended

June 30, 2019
Three Months
Ended

June 30, 2020
Three Months
Ended

March 31, 2020
Three Months Ended
June 30, 2019
Financial
Crude oil revenues 51,607 12,628 9,839 41,768 8,099
Royalties (1,929) (644) (123) (1,806) (430)
Net operating income 20,565 4,201 2,756 17,809 3,355
Commodity price derivatives income (loss) (1) (22,156) - 18,264 (40,420) -
Net income (loss) (15,423) (1,090) 16,029 (31,452) 520
Basic and diluted net income (loss) (US$/share) (0.02) (0.00) 0.02 (0.05) 0.00
Capital expenditures 32,628 34,639 8,756 23,872 24,868
Operating
Average production (bopd) (2) 6,936 1,963 4,185 9,686 3,010
Average sales (bopd) 7,521 1,230 4,729 10,313 1,533
Average Brent oil price (US$/barrel) 39.67 66.06 29.19 50.14 68.95
Average realized price (US$/barrel) 37.70 56.74 22.87 44.51 58.05
Netback (US$/barrel) 15.02 18.88 6.40 18.98 24.05
Funds flow from operations 15,987 1,048 869 15,118 1,776
Balance sheet
Cash 20,379 7,373 33,128
Working Capital (31,845) (61,025) 17,776
Total assets 216,899 194,274 145,833
Current liabilities 76,932 89,914 32,380
Equity 122,789 90,029 100,158

 

(1) On June 12, 2020, the Company announced that the non-cash contingent derivative liability will be paid over a three-year period.
(2) The field was shut in on May 7, 2020; for the 37 producing days in Q2 2020, production averaged 11,500 bopd.

Q2 2020 Operational Highlights

  • The 6H well commenced operations on April 10, 2020 producing approximately 5,750 barrels of oil per day ("bopd") initially, with average production of approximately 4,329 bopd for the first 30 production days during April. The 6H well was completed on time and under the original $12.6 million budget;
  • On May 7, 2020, the health department of the Peruvian government issued a directive for COVID-19 prevention in certain high risk areas. As a result of the directive:
    • PetroPeru temporarily shut down pipeline operations;
    • Operations at the Bretana oil field were temporarily shut in due to storage capacity limitations. The Bretana oil field was producing approximately 11,500 bopd prior to being shut in;
    • The oil field shutdown triggered significant reductions in operating and transportation costs;
    • The Company proactively reduced its general and administrative costs, inclusive of an average 20% compensation reduction for management and directors; and,
  • In light of global market uncertainty, postponed the drilling of a second water disposal well, delayed completion of CPF-2 facilities, and postponed drilling of the BN 95-7H horizontal well.

Q2 2020 Financial Highlights

  • Revenue decreased to $9.8 million ($22.87/bbl) compared to $41.8 million ($44.51/bbl) in Q1 2020, due to the global oil price collapse and the COVID-19 pandemic, which led to the field being shut in on May 7, 2020. The average Brent oil price dropped by 42% to $29.19/bbl from $50.14/bbl for Q1 2020;
  • Royalties to the Peruvian government were $0.1 million (1.3% of revenue) compared to $1.8 million (4.3% of revenue) for Q1 2020;
  • Cash flow from operations was $0.9 million compared to $15.1 million in Q1 2020;
  • Operating costs were $2.4 million ($5.67/bbl), a reduction from $6.0 million ($6.42/bbl) for Q1 2020;
  • Transportation costs were $4.5 million ($10.50/bbl) compared to $16.1 million ($17.18/bbl) for Q1 2020, reflecting the variable cost nature associated with lower production;
  • The Company had cash of $20.4 million at the end of Q2 2020 compared to $7.4 million at the end of Q1 2020;
  • Net operating income was $2.8 million ($6.40/bbl) compared to net operating income of $17.8 million ($18.98/bbl) in Q1 2020;
  • The Company has a contingent derivative liability relating to oil sold to PetroPeru, and the timing difference between when PetroPeru provides an initial payment for the oil and when the final settlement price is calculated. As at March 31, 2020, this liability was $40.4 million, as a result of the fall in oil prices in that quarter. As at June 30, 2020, this amount was reduced to $22.2 million, reflecting the rise in oil prices during the most recent quarter. The amount of the ultimate actual liability will be crystallized when the oil is actually sold by PetroPeru, which is expected to occur in Q3 and Q4;
  • During May 2020, the Company received financial support related to the COVID-19 economic impact totaling $3.2 million. The Peruvian government sponsored a stimulus program that provided $2.9 million (to be repaid over three years, with repayment commencing after one year for a two year period, at an annual interest at 1.12%) and the US government provided $0.3 million under the Paycheck Protection Program (no repayment is required);
  • On June 12, 2020, the Company announced that the contingent liability pertaining to the Brent oil price reduction had been structured into a three-year payment arrangement ("Arrangement") with PetroPeru (the "Parties"):
    • The amount of this contingent liability to PetroPeru will be definitively determined when the security arrangements for PetroTal's obligations are finalized, which is expected to be by the end of August 2020. Based on current Brent oil prices, the liability is expected to be lower than $22 million;
    • The Arrangement allows PetroTal to settle the obligations to PetroPeru now while still allowing the Company to benefit from higher oil prices forecasted by the Brent forward strip pricing curve, when the physical oil sales occur;
    • The Parties have agreed to extend the one-year Oil Sales Contract to three years upon expiry of the current term on December 23, 2020;
    • The Parties established a framework to ensure that future oil sales under the Oil Sales Contract have adequate hedge protection to avoid future downside losses;
    • The Parties have agreed to further amendments to the Oil Sales Contract for lower pipeline tariffs and fees during the period of low oil prices; and,
  • On June 18, 2020, the Company completed an equity issue, raising gross proceeds of approximately $18 million. The Company intends to use the net proceeds for the ongoing development of the Bretana oilfield and for general corporate purposes.

June 30, 2020 Subsequent Events

  • Bretana oil production recommenced on July 15, 2020 and achieved over 12,000 bopd when all seven wells were online. Oil deliveries commenced initially to the Iquitos refinery, where approximately 40,000 barrels were delivered during July 2020. Oil was also barged to the Saramuro Pump Station ready for delivery into the Northern Oil Pipeline ("ONP") for recommencement of its operations. Approximately 40,000 barrels were delivered to Saramuro in July 2020. To manage the Company's inventory and barge storage capacity, production at that time was reduced to approximately 8,000 bopd until such time as the ONP is back to full capacity;
  • As disclosed in the Company's announcement on August 10, 2020, on August 9, 2020, as a preemptive measure, the Bretana oil field was shut down due to civil unrest against the government outside the field camp that resulted in a violent confrontation between protestors, intending to occupy the Bretana facilities, and the police. The civil unrest has been conducted by the same group that, the prior week, took over PetroPeru's pump station No.5 at Saramiriza, seeking government assistance against the COVID-19 crisis. The field closure is expected to last until the inquiry into the incident is completed. The inquiry is progressing and favorable discussions between the Government of Peru and the communities has resulted in the protestors allowing operations at the ONP to restart this week. The Company expects that it will be able to recommence oil production at Bretana by the end of August 2020; and,
  • On June 25, 2020, PetroTal entered a commodity swap transaction with an international bank and commodity broker to hedge 460,000 barrels of crude oil at $40.58 per barrel. This transaction had a termination date of July 17, 2020 to coincide with a physical oil sale of a similar amount.

Liquidity Update

At August 17, 2020, PetroTal has cash resources of $13.5 million, with accounts payable and accrued liabilities of approximately $37 million, a reduction of $12 million from the end of Q2 2020. Ongoing payments will be managed from expected oil field revenues and internal cash resources. Pursuant to contractual terms with our suppliers, approximately 23% of the amount are not due until into 2021.

Updated Corporate Presentation

PetroTal is pleased to announce that on August 19, 2020, an updated corporate presentation will be available on the Company's website at www.petrotal-corp.com.

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

"In the face of a difficult macro environment, I am very pleased with PetroTal's performance during the second quarter of the year. A number of the steps we took to preserve the Company's liquidity began to yield results, which enabled us to deliver a break-even quarter.

"Whilst it is disappointing that we had to shut in the Bretana oil field post period end, it is a testament to the team as to how quickly we were able to get production back up and running prior to this shutdown, quickly achieving over 12,000 bopd when all seven wells commenced production. First and foremost, we are a Peruvian led and operated oil company whose mission and vision is in tune with the local communities, so we look forward to working with all our stakeholders to get production at the field up and running as soon as practically possible."

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) and (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the Company's ability to operate in accordance with developing public health efforts to contain COVID-19; the timing of filing the Interim Filings. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e. g. , operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form and management's discussion and analysis for the year ended December 31, 2019 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/62014


PetroTal Announces Closure of Bretana Oil Field due to Social Disruption

To Focus on the Team's Safety, only Key PetroTal Personnel Remain on Location to Restart Operations when Appropriate

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - August 10, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") advises that as a preemptive measure it has shut down the Bretana Oil Field due to civil unrest outside the oil field camp. The civil unrest has been conducted by the same group that the prior week took over Petroperu's Pump Station No.5 at Saramiriza seeking Government assistance against the COVID-19 crisis. The field closure is expected to last until the inquiry into the incident is completed.

As a result of the attack at Pump Station No.5, PetroTal had requested enhanced security at the Bretana field from Peru's National Police. The police had dispatched about 40 officers to act in a preventive manner to discourage any violence from the protesters, and a local prosecutor from nearby Requena came along to be able to report on any disturbances. Charges are expected to be laid against those protesters that acted unlawfully during the protest.

In the late hours of August 8, 2020 and into the early hours of August 9, 2020, an armed group of protesters, mostly from areas outside of Bretana, confronted the national police force. As a result, and during the ensuing struggle, about a dozen injuries amongst the police and protesters were reported. Unfortunately, there were also three other injured protestors that later died from their injuries. PetroTal is cooperating fully with the authorities as they conduct their review of this unfortunate incident.

For safety reasons, all non-essential personnel have been evacuated from the oil field pursuant to the normal rotation schedule, with a key group remaining on hand to commence production when it's appropriate, at which time the remaining crew will be brought back into the field under the appropriate COVID-19 protocol.

It is important to highlight that the protests were against the Government of Peru, as PetroTal is known as a Peruvian led and operated oil company whose mission and vision is in tune with the local communities struggle to be empowered to manage their fair share of the Government's oil contracts take. PetroTal has consistently promoted that Government and community revenue sharing should happen under full transparency.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru with more than 10,000 bopd of production. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the AGM; and the Consolidation. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the timely receipt of all required Shareholder, TSXV and regulatory approvals. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for the three months ended March 31, 2020 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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PetroTal Announces Details Regarding Annual General and Special Meeting

Virtual Meeting to be Held on September 9, 2020

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - August 4, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce that a management information circular (the "Circular") and other materials in respect of its annual general and special meeting (the "Meeting") of holders ("Shareholders") of its common shares ("Shares") have been filed on the Company's profile on SEDAR at www.sedar.com. The Meeting will be held solely by means of remote communication by webcast at http://www.gowebcasting.com/10771 and by telephone at Canada/USA Toll Free: 1-800-319-4610 International Toll: +1-604-638-5340 on September 9, 2020 at 10:00 a.m. (Calgary time).

At the Meeting, Shareholders will be asked to consider for approval, among other things, a resolution authorizing the Board of Directors, at its discretion, to proceed with a potential consolidation of the Shares on the basis of a ratio of between four and eight pre-consolidation Shares for each one post-consolidation Share (the "Consolidation").

The Consolidation is subject to approval of the TSX Venture Exchange (the "TSXV") and Shareholders at the Meeting. If these approvals are received and the Board of Directors determines to proceed, the Consolidation will occur at a time determined by the Board and announced by a press release of the Company. The Company believes that the Consolidation, if implemented, will promote increased liquidity and reduced volatility in the trading of the Shares.

The Company currently has 814,555,701 issued and outstanding Shares. In the event that the Consolidation is completed, for example, on a four for one basis, the Company would have approximately 203,638,925 Shares outstanding following the Consolidation. In addition, the exercise price and number of Shares issuable upon the exercise of any convertible securities would be proportionally adjusted upon the implementation of the Consolidation.

Further details on the reasoning for the Consolidation and the other matters to be considered at the Meeting are contained in the Circular.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru with more than 10,000 bopd of production. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the AGM; and the Consolidation. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the timely receipt of all required Shareholder, TSXV and regulatory approvals. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for the three months ended March 31, 2020 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/61056


PetroTal Announces Restart of Production at Bretana Oil Field

Initial production rates of over 12,000 bopd

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - July 27, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to provide an update on operations at the Bretana oil field which, as previously indicated, recommenced in mid-July.

Highlights

  • PetroTal has implemented stringent testing measures and modified operating procedures to ensure the safety of its workers;
  • The Bretana field restarted operations on July 15th, 2020 and production has returned to pre-shutdown levels of 11,500 barrels of oil per day ("bopd"), exceeding 12,000 bopd when all seven wells are online;
  • Oil deliveries have commenced to the Iquitos refinery and deliveries to the Northern Oil Pipeline ("ONP") at the Saramuro Pump Station are expected to commence in early August 2020; and,
  • Q2 2020 production was approximately 4,180 bopd. Taking into account the field was shut-in since early May 2020, average Q2 2020 production for the period the oil field was producing represented approximately 11,500 bopd.

Bretana Oil Field

On May 7, 2020, PetroTal announced that it had temporarily shut in the Bretana oil field operations in response to a directive issued by the Peruvian government's health department related to COVID-19 prevention, that resulted in the operator of the ONP (Petroperu) having to shut down pipeline operations. The Bretana oil field was producing approximately 11,500 bopd prior to being shut in. PetroTal used this period to perform maintenance operations and effected improvements to the production facilities.

In anticipation of the re-opening of the ONP, Bretana oil production recommenced on July 15, 2020 and achieved over 12,000 bopd when all seven wells were online.

Crude oil production is the basis for royalty calculation purposes by Perupetro, the Peruvian government agency responsible for collecting the royalty payments, and such volumes are reported on its website: https://www.perupetro.com.pe/wps/wcm/connect/corporativo/7318e1ef-aaa2-4c91-8313-7d2090cba5fa/Producci%C3%B3n+l%C3%ADquidos.pdf?MOD=AJPERES&liquidos.

The website reports all crude oil production in Peru, of which the Block 95 reference is the Bretana oil field. The reported crude oil volumes do not include the approximately 4% of natural gasoline blended into the Bretana crude oil to meet the required viscosity specifications, especially those at the ONP; hence oil sales volumes are slightly larger than the crude oil volumes reported by Perupetro.

Oil deliveries have already commenced to the Iquitos refinery and approximately 40,000 barrels are expected be delivered during July 2020.

Oil is being barged to the Saramuro Pump Station ready to be delivered into the ONP immediately at its recommencement of its operations, expected in early August 2020. To manage the Company's inventory and barge storage capacity, Bretana production has been reduced to approximately 8,000 bopd pending the restart of the pipeline.

Workforce and Community Safety

PetroTal has implemented a stringent COVID-19 safety protocol, which has been reviewed and approved by PetroTal's HSE-CSR Board Committee as well as Peru's Health Ministry. PetroTal's protocol includes appropriate distancing, use of facemasks at all times, temperature checks three times a day, rapid tests before entering the field and then in Bretana camp every three days, each person having their own room, constant disinfection of all spaces, and a doctor and two nurses on location to supervise. While the workers from the Bretana community stay at the camp during their rotation, the crew of all oil transport barges do not enter the camp, though they are subjected to the same protocol every time a vessel arrives at Bretana.

Annual General Meeting

PetroTal will hold its annual general and special meeting of shareholders ("AGM") on September 9, 2020. Meeting materials for the AGM will be mailed this week. Further AGM details will be provided in subsequent announcements.

Manolo Zuniga, President and Chief Executive Officer, commented:

"On behalf of PetroTal, I would like to thank the 30 person team that stayed at Bretana during the shut down and ensured all the facilities were properly maintained, which is reflected by how quickly the new 130 person team was able to re-open the oil wells, recommence construction support activities and again reach 12,000 bopd of production. Our commitment is to ensure all stakeholders benefit from the Bretana project, including the local communities that support our Company."

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru with more than 10,000 bopd of production. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; anticipated future production and production capacity; the Company's ability to remain operating in accordance with developing public health efforts to contain COVID-19; future development and growth prospects; and the timing of the AGM. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, inventory and barge storage capacity, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e. g. , operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for the three months ended March 31, 2020 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

FOFI DISCLOSURE: This press release contains future‐oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production, production storage capacity, royalties 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 Canadian Securities Administrators' National Instrument 51‐101 Standards of Disclosure for Oil and Gas Activities.

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

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/60533


PetroTal announces First Quarter 2020 Financial and Operating Results

Average Q1 2020 oil production of 9,686 bopd

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - July 9, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company")  is pleased to announce its financial and operating results for the three months ended March 31, 2020 ("Q1 2020").

Selected financial, reserves 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 Q1 2020, which are available on SEDAR at www.sedar.com and the Company's website at www.PetroTal‐Corp.com. Reserve numbers presented herein were derived from an independent reserves report (the "NSAI Report") prepared by Netherland, Sewell & Associates, Inc. ("NSAI") effective December 31, 2019. All amounts herein are in United States dollars ("US$") unless otherwise stated.

Q1 2020 HIGHLIGHTS

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

Q1 2020 Operational Highlights

  • Commenced drilling the BN 95-6H horizontal well (the "6H well") on February 17, 2020. The well reached a lateral length of 1,178 meters and was completed using autonomous inflow control device ("AICD") valves that restrict water inflow. The 6H well came online on April 10, 2020 producing approximately 5,750 barrels of oil per day ("bopd") initially, and achieved average production of approximately 4,500 bopd for the first 10 production days during April;
  • The 6H well was completed on time and under the original $12.6 million budget;
  • The Bretaña oil field reached new record quarterly production of 9,686 bopd and sales of 10,313 bopd. This represents a 25% increase from Q4 2019 production of 7,767 bopd;
  • Completed commissioning of the enhanced central production facilities ("CPF-1") bringing overall oil production capacity to between 16,000 bopd and 18,000 bopd;
  • Announced increases in all reserve categories following 2019 year-end reserves evaluation by NSAI:
  • Proved ("1P") reserves of 21.5 million barrels ("mmbbl"), an increase of 20% (17.9 mmbbl at year-end 2018);
  • Proved plus Probable ("2P") reserves of 47.7 mmbbl, an increase of 21% (39.4 mmbbl at year end 2018); and,
  • Proved plus Probable and Possible ("3P") reserves of 84.8 mmbbl, an increase of 8% (78.7 mmbbl at year end 2018);
  • In light of global market uncertainty, postponed the drilling of a second water disposal well, delayed completion of CPF-2 facilities, and postponed drilling of the BN 95-7H horizontal well.

Q1 2020 Financial Highlights

  • Generated revenue of $41.8 million ($44.51/bbl) compared to $50.5 million ($57.71/bbl) in Q4 2019;
  • Royalties to the Peruvian government were $1.8 million (4.3% of revenue) during Q1 2020 compared to $1.8 million (3.6% of revenue) for Q4 2019;
  • Funds flow provided by operations was $15.1 million compared to $21.7 million in Q4 2019;
  • Operating costs were $6.0 million ($6.42/bbl) for Q1 2020 consistent with $6.0 million ($6.91/bbl) for Q4 2019;
  • Transportation costs, were $16.1 million ($17.18/bbl) for Q1 2020 increased from $14.3 million ($16.30/bbl) for Q4 2019, as a result of the new oil sales contract finalized in December 2019;
  • The company had cash of $7.4 million at the end of Q1 2020 compared to $21.1 million at year-end 2019 and $17.8 million at the end of Q1 2019. Current cash (as at July 9, 2020) is $24 million;
  • Net operating income was $17.8 million ($18.98/bbl) in Q1 2020 compared to net operating income of $28.4 million ($32.42/bbl) in Q4 2019; and,
  • Resulting from the significant global oil price reduction, the Company had a contingent derivative liability of $40.8 million at March 31, 2020. The actual liability of the oil price difference determination is expected to be lower due to the projected improvement in oil prices when physical sales occur in Q3 and Q4 2020 (for reference, based on the average Brent oil price of approximately $40/bbl for June 2020, the contingent liability is approximately $25 million).

March 31, 2020 Subsequent Events

  • On May 7, 2020, the health department of the Peruvian government issued a directive for COVID-19 prevention in certain high-risk areas. As a result of the directive:
  • Petroperu temporarily shut down pipeline operations to comply;
  • Operations at the Bretaña oil field were temporarily shut in due to storage capacity limitations. The Bretaña oil field was producing approximately 11,500 bopd prior to being shut in;
  • PetroTal is coordinating with Petroperu to reopen the Bretaña oil field in July 2020;
  • The Company deferred its planned capital expenditure for 2020;
  • The oil field shutdown triggered significant reductions in operating and transportation costs; and,
  • The Company proactively reduced its general and administrative costs, inclusive of an average 20% compensation reduction for management and directors.
  • During May 2020, the Company received government-sponsored financial support related to the Covid-19 economic impact totaling $3.2 million. The Peruvian government provided $2.9 million (to be repaid over four years, with repayment commencing after one year for a three year period, and annual interest at 1.12%) and the US government provided $0.3 million under the Paycheck Protection Program (no repayment is required);
  • On June 12, 2020, the Company announced that the contingent liability pertaining to the Brent oil price reduction had been structured into a three-year payment arrangement ("Arrangement") with Petroperu (the "Parties"):
  • The amount of this contingent liability to Petroperu will be definitively determined when the security arrangements for PetroTal's obligations are finalized, expected to be by the end of July 2020. Based on current Brent oil prices, the liability is expected to be approximately $25 million;
  • The Arrangement allows PetroTal to settle the obligations to Petroperu now while still allowing the Company to benefit from higher oil prices forecasted by the Brent forward strip pricing curve when the physical oil sales occur;
  • The Parties have agreed to extend the one-year Oil Sales Contract to three years upon expiry of the current term on December 23, 2020;
  • The Parties established a framework to ensure that future oil sales under the Oil Sales Contract have adequate hedge protection to avoid future downside losses; and,
  • The Parties have agreed to further amendments to the Oil Sales Contract for lower pipeline tariffs and fees during the period of low oil prices;
  • On June 18, 2020, the Company completed an equity issue, raising gross proceeds of approximately $18 million. The Company intends to use the net proceeds for the ongoing development of the Bretaña oilfield, to enhance working capital and towards the reopening of the oilfield;
  • On June 25, 2020, PetroTal entered into a financial swap for 460,000 barrels of oil to cover the upcoming sale by Petroperu at the Bayovar port. The ICE Brent crude oil swap is priced at $40.58 per bbl and settles on July 17, 2020, using the July 1-17,2020 average ICE Brent crude oil price; and,
  • The Company is confident in its ability to ramp up activity at Bretaña, ahead of the planned reopening in July 2020, to ensure the oil field will return to normal operating status.

The following table summarizes key financial and operating highlights associated with the Company's performance for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019. Note that the commodity price derivative is a non-cash item. See the Financial Statements and MD&A for further details.

Quarter ended Quarter ended Quarter ended
Results at a glance March 31, 2020 December 31, 2019 March 31, 2019
Financial
    Crude oil revenues 41,768  50,482  4,529 
    Royalties (1,806) (1,813) (214)
    Net operating income 17,809 28,353 845
    Commodity price derivative loss (income) (1) (1) 40,420 (213) -
    Net income (loss) (31,452) 18,223 (1,610)
    Basic and diluted net income (loss) (US$/share) (0.05) 0.03 0.00
    Capital expenditures 23,872 26,273 9,771
Operating
    Average production (bopd) 9,686 7,767 904
    Average sales (bopd) 10,313 9,509 923 
    Average Brent oil price (US$/barrel) 50.14 63.26 63.83 
    Average realized price (US$/barrel) 44.51 57.71 54.54 
    Netback (US$/barrel) 18.98 32.42 10.18 
    Funds flow from operations 15,059 21,709 (728)
Balance sheet
    Cash 7,373 21,101 17,781
    Working Capital (61,025) (11,762) 15,789
    Total assets 194,274 194,181 100,808 
    Current liabilities 89,914 59,286 14,694
    Equity 90,029 121,057 75,966

 

(1) On June 12, 2020, the Company announced that this contingent liability will be paid over a three-year period.

Based on current oil prices, the overall amount has been reduced to approximately $25 million.

Q1-20 Q4-19 Q1-19
$/bbl $/bbl $/bbl
SALES: Average Production (bopd) 9,686 7,767 904
Bbls Sold 938,478 874,802 83,040
Average sold (bopd) 10,313 9,509 923
Average Brent price ($/bbl) 50.14 63.26 63.83
Quality price differential (%) -11.2% -8.8% -14.6%
Revenues
Oil revenue $44.51 $41,768 $57.71 $50,482 $54.54 $4,529
Less: Royalties $1.92 $1,806 $2.07 $1,814 $2.58 $214
Operating expense $6.42 $6,028 $6.91 $6,047 $30.44 $2,527
Transportation expense $17.18 $16,125 $16.30 $14,268 $11.36 $943
NET OPERATING INCOME $18.98 $17,809 $32.42 $28,353 $10.18 $845
Netback as % of Revenue 42.6% 56.2% 18.7%
General and administrative expense $2.12 $1,993 $6.91 $6,048 $19.62 $1,629
Derivative loss (income) $43.07 $40,420 -$0.24 ($213) $0.00 $0
Accretion and other expense $0.24 $229 $0.26 $229 $1.06 $88
Finance expense $0.53 $499 $0.15 $135 $0.00 $0
Deferred income taxes (recovery) $0.06 $60 $0.05 $45 $0.71 $59
Depletion, depreciation & amortization $6.10 $5,725 $4.30 $3,760 $8.97 $745
Impairment and foreign exchange $0.36 $335 $0.14 $126 -$0.79 ($66)
NET INCOME (LOSS) ($31,452) $18,223 ($1,610)
FUNDS FLOW FROM OPERATIONS $15,059 $21,709 $(728)

 

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

"Despite the challenging macro backdrop, PetroTal achieved a great deal during the first quarter of 2020. The Company successfully drilled the 6H well on time and under the original budget. To date, the well has performed in line with expectations, producing approximately 4,500 bopd for the first 10 days in April 2020.

Post-period end, we chose to take decisive action to preserve the Company's liquidity position and I am pleased with the results we have achieved to date. We remain on track to restart production at Bretaña later this month and I look forward to updating all our stakeholders as we look to resume normal operating conditions in due course."

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the Company's ability to operate in accordance with developing public health efforts to contain COVID-19; the timing of filing the Interim Filings. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e. g. , operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form and management's discussion and analysis for the year ended December 31, 2019 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/59517


PetroTal Announces Filing Date for First Quarter 2020 Results

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - July 6, 2020) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") advises that its unaudited consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2020 ("Interim Filings") will be released on July 9, 2020.

This is in accordance with the exemption provided in Alberta Securities Commission Blanket Order 51-517 Temporary Exemption from Certain Corporate Finance Requirements (and similar exemptions provided by the other Canadian securities regulators).

Until the Company has filed the Interim Filings, members of the Company's Board, management and other insiders are subject to an insider trading black-out policy that reflects the principles in section 9 of National Policy 11-207 - Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.

There have been no material business developments since the filing of the Company's annual financial statements and accompanying management's discussion and analysis for the year ended December 31, 2019 on June 15, 2020, except as disclosed in the press release dated June 18, 2020. As stated in that press release, the Company continues to plan for the re-opening of the Bretana oil field this month.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the Company's ability to operate in accordance with developing public health efforts to contain COVID-19; the timing of filing the Interim Filings. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e. g. , operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form and management's discussion and analysis for the year ended December 31, 2019 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

Corporate Logo

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/59194


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

Financial and Operations Update

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

Financial and Operational Update

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

Contingent liability

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

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

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

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

Sales terms

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

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

Trade Payables

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

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

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

Cash

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

Bretana oil field

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

Bretana production and development

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

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

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

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

Appointment of Broker

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

Total voting rights

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

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES
FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the Company's ability to resume operations in accordance with developing public health efforts to contain COVID-19; additional cost reductions; and liability under the Swap Contract and Sales Contract and the settlement of such liability. All statements other than statements of historical fact may be forward‐looking statements. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price volatility, price differentials and the actual prices received for products, exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2018 and management's discussion and analysis for the three and nine months ended September 30, 2019 which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

FOFI DISCLOSURE: This press release contains future‐oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's temporary shut down of operations, the anticipated resumption of operations, storage capacity, cost reductions, pipeline transportation arrangements, liability under the Swap Contract and Sales Contract and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.

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

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


PetroTal Announces 2019 Year-End Financial and Operating Results

Record levels of oil production, cash flow and income

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

Selected financial, reserves and operational information is outlined below and should be read in conjunction with the Company's audited consolidated financial statements ("Financial Statements"), management's discussion and analysis ("MD&A") and annual information form ("AIF") for the year ended December 31, 2019, which are available on SEDAR at www.sedar.com and the Company's website at www.PetroTal‐Corp.com. Reserves numbers presented herein were derived from an independent reserves report (the "NSAI Report") prepared by Netherland, Sewell & Associates, Inc. ("NSAI") effective December 31, 2019. All amounts herein are in United States dollars ("USD") unless otherwise stated.

2019 HIGHLIGHTS

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

Q4 Highlights

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

2019 Operational Highlights

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

2019 Financial Highlights

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

2019 Other Highlights

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

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

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

 

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

 

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

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

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

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL) and (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018 and in early 2020, became the second largest crude oil producer in Peru. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field.

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

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

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

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

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

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

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

READER ADVISORIES

FORWARD‐LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward‐looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; drilling and completion activities and the results of such activities; construction of production facilities; the ability of the Company to achieve drilling success consistent with management's expectations; anticipated future production and revenue; future development and growth prospects; and the Company's ability to resume operations in accordance with developing public health efforts to contain COVID-19. All statements other than statements of historical fact may be forward‐looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward‐ looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward‐looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward‐looking statements are based are reasonable, undue reliance should not be placed on the forward‐looking statements because the Company can give no assurance that they will prove to be correct. Since forward‐looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price volatility, price differentials and the actual prices received for products, exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the AIF and MD&A which are available on SEDAR at www.sedar.com. The forward‐looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

FOFI DISCLOSURE: This press release contains future‐oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production, NPV-10, future net revenue, future development costs, temporary shut down of operations, the anticipated resumption of operations, storage capacity, cost reductions and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.

PRESENTATION OF OIL AND GAS INFORMATION: The reserves information herein sets forth PetroTal's reserves as at December 31, 2019, as presented in the independent reserves report prepared by NSAI, in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") and the reserve definitions contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). In addition to the summary information disclosed in this announcement and the press release dated February 18, 2020, more detailed information is included in the AIF. This press release contains metrics commonly used in the oil and natural gas industry, such as operating netbacks (calculated on a per unit basis as oil revenues less royalties and barging, pipeline and lifting costs). These terms have been calculated by management and do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare PetroTal's operations over time. All oil and gas disclosure contained in this press release complies with the requirements of NI 51-101. The term original oil in place (OOIP) is equivalent to total petroleum initially in place ("TPIIP"). TPIIP, as defined in the Canadian Oil and Gas Evaluation Handbook, is that quantity of petroleum that is estimated to exist in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. A portion of the TPIIP is considered undiscovered and there is no certainty that any portion of such undiscovered resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of such undiscovered resources. With respect to the portion of the TPIIP that is considered discovered resources, there is no certainty that it will be commercially viable to produce any portion of such discovered resources. A significant portion of the estimated volumes of TPIIP will never be recovered.

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

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