PetroTal Advises of Reduced Production Level Due to Social Unrest

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - March 3, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") advises that it has reduced production to ensure field safety and manage storage levels due to social protests at PetroTal's loading dock.

On February 28, 2022 a small group from the Asociación Indígena de Desarrollo y Conservación de Bajo Puinahua ("AIDECOBAP") commenced gathering outside the Bretana oilfield that led to access to the Company's loading dock being blocked. To ensure employee / contractor safety and minimize environmental risk, the Company has constrained its production level to approximately 4,000 barrels of oil per day, accumulating into field storage facilities, while aiding in protest negotiations.

AIDECOBAP continues to push for fulfillment of their demands from the government. AIDECOBAP claims they are being persecuted by the government for protesting their requests. They are also requesting the establishment of an indigenous trust to allow them to execute projects whose funding was approved by the government in late 2020 to reduce the basic needs gap in local communities. Lastly, AIDECOBAP is also requesting that the government expedite the formalization of the Bretana 2.5% social fund, offered by PetroTal, into the Block 95 license contract.

For the second fortnight of January and all of February 2022, PetroTal had been segregating the 2.5% social fund into a separate bank account, but due to the current protests and resulting production curtailment, no funds will be allocated for the upcoming fortnight as per the guidelines of the social trust.

The Company is also monitoring the progress of necessary maintenance repairs to the Northern Peruvian Pipeline ("ONP"). While the repairs have been ongoing, PetroTal has been selling oil through the Brazil export route. Last month the Company completed a 240,000 barrel oil sale through Brazil, for the first time without diluent blending, which will have a positive impact on diluent costs in Q1 2022.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/115575


PetroTal Announces TSX Venture Exchange Recognition and Bond Update

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 28, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") is pleased to announce that it has been recognized as one of the top 50 performing TSX-V listed issuers, ranking tenth in the energy industry sector. All amounts are quoted in US dollars.

TSX Venture 50

The 2022 Venture 50 is an annual program of the TSX Venture Exchange that recognizes the top performing TSXV-listed companies from five industry sectors. The 2022 Venture 50 winners are chosen based on 2021 annual performance for market capitalization growth, share price appreciation and trading volume. A video featuring PetroTal can be found at the link below. For more information and the full 2022 Venture 50 ranking, visit: www.tsx.com/venture50.

2022 TSX Venture 50 video link

https://vimeo.com/marketonemediagroup/review/676647431/6fd32a3512

Bond Update

PetroTal also advises that is has provided the required notice to bondholders, per the bond indenture, of its intention to repay $20 million in bonds, previously reserved for M&A activities. The cash settlement will occur on or around April 1, 2022. Subsequent to this payment, the Company estimates long term debt, excluding lease obligations and abandonment costs, will be $80 million.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

Douglas Urch
Executive Vice President and Chief Financial Officer

Durch@PetroTal-Corp.com
T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer

Mzuniga@PetroTal-Corp.com
T: (713) 609-9101

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

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.

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus, including executing 2P development plans to prevent base declines and optimize water handling peaks; the impact of social disruption on the Company's operations; drilling, completions, workovers and other activities and the anticipated costs and results of such activities; PetroTal's 2022 budget and financial/operational guidance; PetroTal's anticipated operational results for 2022 including, but not limited to, estimated or anticipated production levels, capital expenditures and drilling plans; the intention to redeem the outstanding bonds; PetroTal plans to deliver strong operational performance and to generate free cash flow and growth; capital requirements; the ability of the Company to achieve drilling success consistent with management's expectations; the ability of the Company to achieve near term production targets and operate at unrestricted levels; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup and the impact of delays thereon; oil production levels, including average and exit production in 2022; sales expansion through alternative exports routes, including barging and trucking; the Company's proposals for collaboration with local communities; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. Without limitation of the foregoing, future dividend payments, if any, and the level thereof, is uncertain, as the Company's dividend policy and the funds available for the payment of dividends from time to time is dependent upon, among other things, free cash flow financial requirements for the Company's operations and the execution of its growth strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of PetroTal to pay dividends will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price volatility, price differentials and the actual prices received for products, exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, increased operating and capital costs due to inflationary pressures, 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, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

NON-GAAP FINANCIAL MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as EBITDA and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. EBITDA is calculated as consolidated net income (loss) before interest and financing expenses, income taxes, depletion, depreciation and amortization and adjusted for G&A impacts and certain non-cash, extraordinary and non-recurring items primarily relating to unrealized gains and losses on financial instruments and impairment losses, including derivative true-up settlements. PetroTal utilizes EBITDA as a measure of operational performance and cash flow generating capability. EBITDA impacts the level and extent of funding for capital projects investments. Free cash flow is calculated as cash flow from operating activities less exploration and development capital expenditures and is calculated prior to all debt service, taxes, lease payments, hedge costs, factoring, and lease payments. Management uses free cash flow to determine the amount of funds available to the Company for future capital allocation decisions.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's budget and guidance, prospective results of operations, production and production capacity, free cash flow, revenue, NOI, adjusted EBITDA, debt repayment, liquidity, shareholder returns and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. Changes in forecast commodity prices, differences in the timing of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in PetroTal's guidance. The Company's actual results may differ materially from these estimates.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/115020


PetroTal Announces a 2022 Capital Budget of US $120 million

Targeting a 100% growth rate in average oil production to between 17,500 and 19,500 bopd
Free cash flow pre debt service of $230 million

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 22, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") is pleased to announce a fully funded 2022 capital program of $120 million that is expected to generate material free cash flow, allowing for an expected resumption of a dividend to shareholders by Q4 2022. All amounts are quoted in US dollars.

2022 Key Highlights

  • Invest $75 million in drilling and completing four horizontal development wells in 2022. Inclusive of well 10H, which commenced production on January 31, 2022, a total of five new wells will commence production in 2022;
  • Target a 2022 average production range between 17,500 bopd and 19,500 barrels of oil per day ("bopd") with an estimated exit December 2022 production rate of approximately 21,500 bopd;
  • Generate an adjusted EBITDA1 range of $340 to $365 million, assuming a 2022 average Brent price of $88/bbl and a $37 million net derivative true-up payment from oil arriving and being commercialized at Bayovar through the Northern Peruvian Pipeline ("ONP");
  • Execute a facilities and infrastructure expansion program of approximately $43 million which includes a new diluent tank, additional separators, a power plant expansion, additional injection facilities and key process optimization projects;
  • Generate free cash flow (before debt service)1 of between $220 and $245 million in 2022;
  • Repay $20 million of the 2021 $100 million bond issue in H1 2022;
  • Redeem the balance of the bonds in Q3 2022, should cash and working capital levels permit;
  • Assuming the entire bond is retired, PetroTal intends to reinstate a stable and rewarding return of capital program as early as Q4 2022; and,
  • Allocate approximately $15 million in community social trust payments and direct community investment projects in 2022.

(1) See "Non-GAAP Financial Measures"

Drilling and Completion Budget

PetroTal will invest approximately $75 million to drill four separate producing development wells in 2022, and complete well 10H which commenced drilling in late 2021 and started production on January 31, 2022. The four new drills in the remainder of 2022 are 11H, 12H, and 13H in the south eastern part of the field and 14H in the north west. These proved undeveloped wells were strategically selected to maximize production

increases, and to continue the extension of the reservoir boundaries. Rig maintenance programs are budgeted to ensure a safe and stable drilling campaign.

Facilities Budget

In 2022, PetroTal will focus on developing necessary infrastructure needed to support continued growth. Approximately $25 million is allocated for a new diluent tank, a three-phase separator unit including engineering and mechanical works, central processing facilities ("CPF-3") planning and construction costs, which will commence in April 2022 and enhance the water injection system with new water injection pumps. This will enable the Company to manage diluent levels to avoid frequent diluent shipments and allow the field to process nearly 200,000 barrels of fluid when completed, which is expected to be by mid 2023.

Over 20 key field infrastructure projects have been identified, totaling $18 million, which will be allocated for optimization, process/production improvement, power expansion, maintenance, and security projects. These projects will be completed in priority of near-term need and are subject to changes given the material and logistical challenges caused by the COVID-19 pandemic.

Block 107 Budget

A total of $2 million is budgeted in 2022 for Block 107 permits. PetroTal expects approval of the Constitucion and Kametza (Osheki) permits in 1H 2022 and 1H 2023, respectively. With these permit approvals, PetroTal will continue to evaluate the Company's deep portfolio of exploration assets for ways to maximize shareholder value.

Community Investment Budget

PetroTal will substantially increase its allocations to community investment in 2022. An estimated $6 million will be dedicated towards the following key project areas:

  • Direct social investments in programs, training and education - $0.8 million
  • Diesel for electricity generation in Puinahua and other areas - $1.3 million
  • Community river erosion control - $1.2 million
  • Social space construction projects - $0.3 million
  • Environmental innovation - $0.4 million
  • Community relations projects - $1.9 million

In addition, the Company expects to generate material net revenue in 2022 and will contribute, on a fortnight basis, an estimated 2022 total of $9 million into community social trust payments assuming no disruptions to PetroTal's ability to produce or sell oil through the ONP, Brazil, Iquitos, or other sales routes planned in the future. PetroTal believes this will create a long-standing alignment between the government, communities, and the Company.

Production Guidance

The Company generates various sensitivities for possible production downtime attributable to social and technical issues. Considering the implementation of the social trust, the Company's current assessment of likely downtime, mostly due to social unrest, and the planned $120 million capital expenditure program, PetroTal's 2022 oil production is expected to range between 17,500 bopd and 19,500 bopd. At the mid point of the range, PetroTal would produce about 6.6 million barrels of oil in 2022, representing a 100% production growth rate over 2021. In addition, the Company expects to exit 2022 with production at approximately 21,500 bopd and with production materially surpassing the 20,000 bopd mark at certain flush production points during the year.

OPEX Guidance

OPEX run rates have increased over 2020 and 2021 levels due to increased activity, inflation pressures, and the Company's continued commitment to manage COVID-19, safety and security. Summarized below are the estimated cost run rates expected in 2022:

Fixed and semi-variable lifting costs that scale with production - estimated at $2.8 million per month including:

  • Fuel
  • Well and various contract services

Variable transportation costs - $7.2/bbl or ($45 - $50 million for 2022)

  • Gross diluent cost and diluent transportation - $4.2/bbl ($1.4/bbl net with diluent sales)
  • Barging - $1.7/bbl
  • Barging standby, diesel, and supervision - $1.3/bbl

The variable costs outlined above assume that PetroTal is able to sell oil consistently. Interruptions to the ability to sell production may create material volatility to the above per barrel run rates if the Company produces into storage for an extended period of time. Currently, PetroTal uses a 4% diluent blend into the oil mix to facilitate productivity, representing a gross cost of $4.2/bbl. As oilfield dynamics change from increased oil production, the Company expects to reduce its diluent blend. Lastly, tariffs, ONP fees, and differentials that are variable in nature are netted with revenue for financial statement and planning purposes.

Cash Flow Guidance

Assuming an $88/bbl average 2022 Brent price, the current run rate cost structure, and sales agreements for oil exports, PetroTal expects to generate $325 to $350 million of net operating income ("NOI") and between $340 and $365 million of EBITDA1 inclusive of $37 million of derivative true-up settlements. The resulting free cash flow (prior to debt service)1 is expected to be between $220 - $245 million, thereby allowing the Company to facilitate full payout of the bonds in Q3 2022 and implement shareholder returns2 by Q4 2022, along with maintaining a healthy cash balance.

(1) See "Non-GAAP Financial Measures"
(2) The bonds restrict any shareholder returns until fully paid out

Quarterly Production and Capital Profile (Mid Case)

Q1 Q2 Q3 Q4
Oil wells completed 1 (10H) 1 (11H) 2 (12H & 13H) 1 (14H)
Production (bopd) 16,300 15,000 20,500 21,000
CAPEX (millions) $35 $35 $37 $13

 

PetroTal 2022 Budget Summary ($ millions, unless otherwise stated)

Budget Range (Low - High Case)
Brent Price $/bbl (Feb 7, 2022 strip forecast) $88.0
Production bopd 17,500 - 19,500
NOI $325 - $350
G&A $22
Derivative settlements (Feb 7, 2022 strip forecast) $37
EBITDA $340 - $365
CAPEX $120
Free cash flow1 $220 - $245

 

1) See "Non-GAAP Financial Measures"

Reimplementation of a Return of Capital policy

PetroTal anticipates material free cash flow generation in 2022. Based on $88/bbl Brent, free cash flow1 is expected to range from $220 to $245 million prior to debt service, taxes, lease payments, hedge costs, factoring, and VAT. In H1 2022, PetroTal intends to repay $20 million of the 2021 $100 million bond issue and $30 million in interest, factoring, lease payments and VAT.

(1) See "Non-GAAP Financial Measures"

In Q3 2022, the Company expects to be in a position to retire the remaining $80 million in bonds with a 6% call premium of $5 million. Interest saved for the remainder of the year will materially offset this prepayment charge thereby allowing PetroTal to implement a return of capital policy by Q4 2022. When the bonds are fully repaid, the Company intends to reinstate a quarterly dividend (as was done in Q4 2019).

The Company notes that the above intention to reinstate a return of capital policy is dependent on a number of interplaying factors materializing as expected.

Hedging Update

During January and February 2022, the Company hedged approximately 1,100,000 barrels using a combination of puts with an $85/bbl strike and collars with a range of $63/bbl to $70/bbl allowing PetroTal to share in any continued commodity price increases.

In total, PetroTal has approximately 2.2 million barrels hedged, representing approximately 33% of the 2022 mid case production guidance, and in line with the Company's hedging strategy.

2022 EBITDA Sensitivities for Production Ranges ($ millions)

Production (bopd)
Brent Price $/bbl EBITDA Matrix 17,500 18,500 19,500 2022 derivative settlement
   
$100 357 376 395 +63
$95 332 350 367 +52
$90 306 323 340 +41
$85 281 297 312 +30
$80 256 270 284 +19
$75 233 246 259 +8
$70 207 218 230 -3
$65 182 193 203 -14

 

Assuming 2022 average production of 18,250 bopd, PetroTal will be in a position to fully cash fund its 2022 CAPEX program and all debt service, VAT, and lease obligations down to $60/bbl Brent while maintaining a liquidity buffer of approximately $25 million throughout 2022.

Updated Corporate Presentation

Please see PetroTal's website for an updated version of its corporate presentation.

2022 Guidance and Reserves Webcast

On February 22, 2022, please join the Company for a summary of 2022 guidance and 2021 year end reserves by clicking on the link below:

UK - 3:00pm, Calgary - 8:00am, Houston - 9:00am, Lima - 10:00am

https://webcasting.brrmedia.co.uk/broadcast/61f90806d0a01d0d75c3c4e0

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

"We are excited to communicate our 2022 development plans to the market. 2022 will be a year of achievement and rewarding shareholders who continue to believe in our story and management team. It is vital that we continue drilling wells and executing our 2P development plans by drilling proved-undeveloped locations that should allow future booked location upgrades, prevent base declines, and optimize water handling peaks based on our current infrastructure. We will continue to deliver investment grade well results and manage our balance sheet prudently, as we have over the past four years our team has been together."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2022, Petrotal became the largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus, including executing 2P development plans to prevent base declines and optimize water handling peaks; the impact of social disruption on the Company's operations; drilling, completions, workovers and other activities and the anticipated costs and results of such activities; PetroTal's 2022 budget and financial/operational guidance; PetroTal's anticipated operational results for 2022 including, but not limited to, estimated or anticipated production levels, capital expenditures and drilling plans; the intention to redeem the outstanding bonds; PetroTal plans to deliver strong operational performance and to generate free cash flow and growth; capital requirements; the ability of the Company to achieve drilling success consistent with management's expectations; the ability of the Company to achieve near term production targets and operate at unrestricted levels; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup and the impact of delays thereon; oil production levels, including average and exit production in 2022; sales expansion through alternative exports routes, including barging and trucking; the Company's proposals for collaboration with local communities; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. Without limitation of the foregoing, future dividend payments, if any, and the level thereof, is uncertain, as the Company's dividend policy and the funds available for the payment of dividends from time to time is dependent upon, among other things, free cash flow financial requirements for the Company's operations and the execution of its growth strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of PetroTal to pay dividends will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price volatility, price differentials and the actual prices received for products, exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, increased operating and capital costs due to inflationary pressures, 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, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

NON-GAAP FINANCIAL MEASURES: This press release contains financial terms that are not considered measures under generally accepted accounting principles ("GAAP") such as EBITDA and free cash flow that do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures. EBITDA is calculated as consolidated net income (loss) before interest and financing expenses, income taxes, depletion, depreciation and amortization and adjusted for G&A impacts and certain non-cash, extraordinary and non-recurring items primarily relating to unrealized gains and losses on financial instruments and impairment losses, including derivative true-up settlements. PetroTal utilizes EBITDA as a measure of operational performance and cash flow generating capability. EBITDA impacts the level and extent of funding for capital projects investments. Free cash flow is calculated as cash flow from operating activities less exploration and development capital expenditures and is calculated prior to all debt service, taxes, lease payments, hedge costs, factoring, and lease payments. Management uses free cash flow to determine the amount of funds available to the Company for future capital allocation decisions.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's budget and guidance, prospective results of operations, production and production capacity, free cash flow, revenue, NOI, adjusted EBITDA, debt repayment, liquidity, shareholder returns and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. Changes in forecast commodity prices, differences in the timing of capital expenditures, and variances in average production estimates can have a significant impact on the key performance measures included in PetroTal's guidance. The Company's actual results may differ materially from these estimates.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/114399


PetroTal Announces Exercise of Investor Warrants and Total Voting Rights

Calgary, AB and Houston, TX - February 21, 2022 - PetroTal Corp. ("PetroTal" or the “Company”) (TSX-V: TAL, AIM: PTAL and OTCQX: PTALF) announces that it received a notice to exercise 1,000,000 Investor Warrants at a price of 16 pence per Common Share. Accordingly, PetroTal received 160,000 GBP in respect of the warrants exercised.

Following this warrant exercise, the Company will have 64,003,906 Investor Warrants outstanding. Application will be made for admission of the 1,000,000 common shares, which will rank pari passu with existing Common Shares, to trading on AIM ("Admission"), which is expected to occur on or around February 24, 2022.

Following Admission, the Company will have 832,942,270 common shares issued and there are no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL, AIM: PTAL and OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; and the impact of social disruption on the Company's operations, including a potential field shutdown at Bretana. All statements other than statements of historical fact may be forward-looking statements. Forward- looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

 


PetroTal Announces Significant Increases in 2021 Year-End Oil Reserves

68% increase in 1P Reserves to 37 million barrels

53% increase in 2P Reserves to 78 million barrels

39% increase in 3P Reserves to 147 million barrels

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 15, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") is pleased to announce the results of its 2021 year-end reserve evaluation by Netherland, Sewell & Associates, Inc. ("NSAI") for the Bretana oil field, operated 100% by PetroTal (the "NSAI Report"). All currency amounts are in United States dollars (unless otherwise stated) and comparisons refer to December 31, 2020.

Highlights:

  • Significant increases in all reserve categories:
    • Proved ("1P") reserves increasing by 68% to 37.4 million barrels. Net Present Value (before tax, discounted at 10% ("NPV-10")) is $724 million ($19.38/bbl) for 1P reserves;
    • Proved plus Probable ("2P") reserves increasing by 53% to 78 million barrels. Net Present Value (before tax, discounted at 10% ("NPV-10") is $1.39 billion ($17.82/bbl) for 2P reserves; and,
    • Proved plus Probable plus Possible ("3P") reserves increasing by 39% to 147 million barrels.
  • NPV-10 values have increased 129% for 1P and 67% for 2P, over year-end 2020, due to reserves growth and an increase in the Brent price forecast used by NSAI at year-end 2021;
  • Material progression of after tax NPV-10 per share to US$0.69/share, US$1.23/share, and US$2.00/share for 1P, 2P, and 3P categories;
  • 2021 Proved Developed Producing ("PDP") reserves increased 35% to 16.15 million barrels, representing 43% of 1P reserves, reflecting an attractive ratio of base production to low risk drilling targets;
  • Three key reserves parameters had material positive upgrades in the NSAI Report, compared to the prior year:
    • Original Oil in Place ("OOIP"): Increases of 5%, 7%, and 7% to 247, 389, and 618 million barrels, respectively, for the 1P, 2P and 3P cases;
    • Due to continued drilling success and additional subsurface data, 1P, 2P and 3P total booked well counts for 2021 are 17, 22, and 29, respectively, up materially from the 2020 well counts of 11, 15, and 20; and,
    • With additional subsurface similarities to Bretana's analogous fields now recognized, all three recovery factor percentages materially increased in 2021 to 18% (from 11%), 22% (from 15%), and 25% (from 19%) for 1P, 2P, and 3P reserve categories, respectively.
  • 2P Future Development Capital ("FDC") increased $96 million or 49% to $289 million from 2020 reflecting an additional 7 wells booked at year-end 2021 and the required associated water disposal capacity needed to accommodate higher anticipated flush and run rate production volumes;
  • 2021 Finding and Development ("F&D") cost per barrel of $6.63, $4.68 and $3.85 for 1P, 2P, and 3P reserve categories, respectively. The 1P and 2P per barrel costs were reduced 42%, and 6% from year-end 2020;
  • Attractive year-end 2021 reserves-based metrics:
    • Doubling 2021 Reserve Life Index ("RLI") for 1P and 2P reserves, to 13.8 and 28.9 years, respectively, compared to 6.4 and 14.6 years in 2020; and,
    • Robust 2021 production reserve replacement ratios of 457% and 816% for 1P and 2P reserves.
  • On a 2P per barrel basis, the NSAI Report reflected a 3.5% decrease in operating costs per barrel, which, given the inflationary pressures from higher Brent oil prices and the COVID-19 pandemic, is an important success story for PetroTal; and,
  • On a 3P basis, the 2021 NSAI production forecast shows a 16-year plateau above 10,000 barrels of oil per day ("bopd) instead of the prior 12-year plateau in NSAI's 2020 reserves report.

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

"The Bretana field is proving itself to be a prolific investment given the significant achievements in 2021 and the 2021 year-end reserves report results. Based on the increased recovery factors and additional booked drilling locations, we have significantly extended the running room and future development potential of our asset. This should allow Bretana to generate free cash flow for a much longer period of time."

2021 Year-end Reserves Summary

The summary below sets forth PetroTal's reserves as at December 31, 2021, as presented in the reserves report prepared by NSAI, an independent qualified reserves evaluator. The figures in the following tables have been prepared in accordance with the standards contained in the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the "COGEH") and the reserve definitions contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). In addition to the summary information disclosed in this announcement, more detailed information will be included in PetroTal's annual information form for the year ended December 31, 2021 (the "AIF") to be filed on SEDAR (www.sedar.com) and posted on PetroTal's website (www.petrotal-corp.com) in April 2022.

Six Year Crude Oil Price Forecast - NSAI Report

Year-End Forecast: 2022 2023 2024 2025 2026 2027 6 Yr Avg
Brent (USD$/bbl) - January 1, 2021 $52.85 $56.04 $57.87 $59.00 $60.15 $61.33 $57.87
Brent (USD$/bbl) - January 1, 2022 $75.33 $71.46 $69.62 $71.01 $72.44 $73.88 $72.31

 

The oil price projections used by NSAI are based upon an average of December 31, 2021 and 2020 forecasts of Brent Crude futures prices prepared by three qualified reserves evaluators: GLJ Petroleum Consultants Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Limited. The six year average for the NSAI Report reflects an average Brent price of $72.31, which as at the time of this press release, is approximately $24/bbl lower than current market Brent prices.

Year-End Crude Oil Reserves (million barrels)

CATEGORY 2021 2020 Change
Proved
Developed Producing 16.2 12.0 +35%
Undeveloped 21.2 10.3 +106%
Total Proved 37.4 22.3 +68%
Probable 40.5 28.7 +41%
Total Proved plus Probable 77.9 51.0 +53%
Possible 69.1 55.1 +25%
Total Proved plus Probable & Possible 147.1 106.1 +39%

 

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

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

CATEGORY 2021 2020 Change
Proved
Developed Producing $250 $135 +85%
Undeveloped $474 $182 +160%
Total Proved $724 $317 +129%
Probable $665 $513 +30%
Total Proved plus Probable $1,389 $830 +67%
Possible $932 $891 +5%
Total Proved plus Probable & Possible $2,321 $1,721 +35%

 

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

CATEGORY 2021 2020 Change
Proved
Developed Producing $244 $134 +82%
Undeveloped $326 $137 +138%
Total Proved $570 $271 +110%
Probable $449 $350 +28%
Total Proved plus Probable $1,020 $621 +64%
Possible $633 $607 +4%
Total Proved plus Probable & Possible $1,653 $1,228 +35%

 

Forecast Revenues and Costs(1-5) ($ millions)

Undiscounted Discounted Discounted
CATEGORY Revenue Royalties OPEX FDC B-Tax Net
Revenue
B-Tax Net
Revenue
A-Tax Net
Revenue
Total Proved $2,299 $160 $921 $141 $1,076 $724 $570
Total Proved plus Probable $4,865 $367 $1,488 $289 $2,722 $1,389 $1,020
Total Proved plus Probable & Possible $9,735 $813 $2,756 $504 $5,662 $2,321 $1,653

 

1) Royalties include the 2.5% social fund for all years.
2) FDC includes abandonment.
3) Net Revenue is defined as revenue less royalties less operating costs less FDC.
4) B-tax and A-tax refer to before and after tax.
5) Discounted values are discounted at 10%.

Year-End Reserves Value per Share - After tax

CATEGORY Dec. 31, 2021 Dec. 31, 2020
Reserves per share US$/sh CAD$/sh GBP/sh US$/sh CAD$/sh GBP/sh
Proved $0.69 $0.88 0.51 $0.33 $0.43 0.24
Proved plus Probable $1.23 $1.57 0.91 $0.76 $0.98 0.56
Proved plus Probable & Possible $2.00 $2.54 1.48 $1.50 $1.93 1.10

 

Represents NPV-10 (after tax) divided by the number of common shares issued as of December 31 of each respective year and excludes other balance sheet items at the relevant date. Canadian and GBP share prices are converted at the respective year end foreign exchange conversion rates. Common share count as at December 31, 2021 totaling 828.2 million shares and as at December 31, 2020 totaling 816.2 million shares.

Reserve Life Index(1-3) ("RLI")

CATEGORY Dec. 31, 2021 Dec. 31, 2020
Proved 13.8 years 6.4 years
Proved plus Probable 28.9 years 14.6 years
Proved plus Probable & Possible 54.5 years 30.3 years

 

(1) 2021 values based on 2021 year-end reserves divided by annualized Q1 2021 production of approximately 7,331 bopd.
(2) The license for Block 95 expires in 2041.
(3) 2020 values based on 2020 year-end reserves divided by annualized Q1 2020 production of approximately 9,686 bopd.

Future Development Costs

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

CATEGORY ($ million) 2021 2020 Change
Proved
Developed Producing $16 $15 +6%
Undeveloped $125 $104 +20%
Total Proved $141 $119 +19%
Probable $148 $75 +98%
Total Proved plus Probable $289 $193 +49%
Possible $215 $104 +108%
Total Proved plus Probable & Possible $504 $297 +70%

 

Future development costs ($/bbl) 2021 2020 Change
Proved $6.63 $11.52 -42%
Proved plus Probable $4.68 $4.96 -6%
Proved plus Probable & Possible $3.85 $3.16 +22%

 

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

2021 Year-End Gross Reserves Reconciliation (million barrels)

Proved Proved plus Probable Proved plus Probable & Possible
December 31, 2020 22.3 51.0 106.1
Technical Revisions 18.2 30.2 44.2
Economic Factors 0.2 0.0 0.0
Production (3.3) (3.3) (3.3)
December 31, 2021 37.4 77.9 147.0

 

Qualified Person's Statement

Dewi Jones, the Company's Vice President, Exploration and Development, who has over 35 years of relevant experience in the oil industry, has approved the technical information contained in this announcement. Mr. Jones received a Bachelor of Science degree in Geology from Louisiana State University in Baton Rouge and is registered on the Texas and Louisiana Board of Professional Geoscientists.

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

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, PetroTal became the second largest crude oil producer in Peru and more recently the top crude oil producer. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; drilling, completions, workovers and other activities and the anticipated costs and results of such activities; the ability of the Company to achieve drilling success consistent with management's expectations; the ability of the Company to achieve near term production targets and operate at unrestricted levels; anticipated future production, revenue and free cash flow; drilling plans including the timing of drilling, commissioning, and startup and the impact of delays thereon; oil production levels, including production 2022; future development and growth prospects; and the timing of filing the AIF. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, impact of inflation on costs, 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, increased operating and capital costs due to inflationary pressures, 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, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

RESERVES DISCLOSURE: PetroTal's Statement of Reserves Data and Other Oil and Gas Information on Form 51-101F1 dated effective as at December 31, 2021, which will include further disclosure of PetroTal's oil and gas reserves and other oil and gas information in accordance with NI 51-101 and COGEH forming the basis of this press release, will be included in the AIF, which will be available on SEDAR at www.sedar.com in April 2022. All reserves values, future net revenue and ancillary information contained in this press release are derived from the NSAI Report unless otherwise noted. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. There is no assurance that the forecast price and cost assumptions applied by NSAI in evaluating PetroTal's reserves will be attained and variances could be material. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of the reserves. The recovery and reserve estimates of PetroTal's oil reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual oil reserves may be greater than or less than the estimates provided herein. There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth herein are estimates only. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Proved developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. Possible reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned. Certain terms used in this press release but not defined are defined in NI 51-101, CSA Staff Notice 51-324 - Revised Glossary to NI 51-101, Revised Glossary to NI 51-101, Standards of Disclosure for Oil and Gas Activities ("CSA Staff Notice 51-324") and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH, as the case may be.

DRILLING LOCATIONS: This press release discloses drilling inventory in three categories: (a) proved locations; (b) probable locations; and (c) possible locations, all of which are derived from the NSAI Report and account for drilling locations that have associated proved, probable and/or possible reserves, as applicable. There is no certainty that PetroTal will drill all booked drilling locations and if drilled there is no certainty that such locations will result in additional oil reserves or production. The drilling locations considered for future development will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the possible drilling locations have been de-risked by drilling existing wells in relative close proximity to such drilling locations, other possible drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil reserves or production.

OIL AND GAS MEASURES: This press release contains metrics commonly used in the oil and natural gas industry which have been prepared by management, such as "netback", "OOIP", "development capital", "F&D costs", "net asset value", "recycle ratio" and "reserves life index". These terms 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. "Netback" equals total petroleum sales less quality discount, lifting costs, transportation costs and royalty payments calculated on a bbl basis. "OOIP" is equivalent to total petroleum initially-in-place ("TPIIP"). TPIIP, as defined in the COGEH, 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. "Development capital" means the aggregate exploration and development costs incurred in the financial year on reserves that are categorized as development. Development capital excludes capitalized administration costs. "Finding and development costs" or "F&D costs" are calculated as the sum of field capital plus the change in future development costs for the period divided by the change in reserves that are characterized as development for the period. Finding and development costs take into account reserves revisions during the year on a per bbl basis. The aggregate of the exploration and development costs incurred in the financial year and changes during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. "Net asset value" is based on present value of future net revenues discounted at 10% before tax on reserves, net of estimated net debt at year end divided by the basic shares outstanding at year end. "Recycle ratio" is measured by dividing the netback for the applicable period by finding and development cost per bbl for the year. The recycle ratio compares netback from existing reserves to the cost of finding new reserves and may not accurately indicate the investment success unless the replacement reserves are of equivalent quality as the produced reserves. "Reserve life index" is calculated as total Company interest reserves divided by annual production. These terms have been calculated by management and do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare PetroTal's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production, NPV-10, future net revenue, future development and abandonment costs, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/113790


PetroTal Announces a Record Ten Day Production Level for Well 10H of 10,050 bopd

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - February 10, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") is pleased to announce the Company's well 10H ("10H"), which commenced production on January 30, 2022, has set a new internal daily production record with an average standalone 10 day production level of 10,050 bopd.

Well 10H on Production

  • Well 10H has produced an average of 10,050 bopd over the last ten days ending February 9, 2022, with the latest reported rate at 10,122 bopd;
  • The well's final cost was $11.5 million, 17% under budget, and came onstream on schedule and has already paid out over 45% of its total well cost at $90/bbl Brent;
  • 10H represents the longest horizontal well drilled to date in Peru;
  • With the help of 10H and PetroTal's robust well portfolio, the Company set a new daily record production level of 20,891 bopd on February 1, 2022 surpassing the mark set in mid December 2021 when 9H was brought onstream; and,
  • With the Company's central processing facility ("CPF-2") fully commissioned, the Company is awaiting final ministry approval expected around February 15, 2022, to be able to operate to its maximum capacity of approximately 24,000 bopd to 26,000 bopd, from current constrained production of around 20,000 bopd.

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

"We have set additional production records with 10H's early production rates. We are extremely pleased from a technical standpoint at what this could mean for the future performance of PetroTal's drilling inventory and are pleased to deliver a strong start to 2022 for shareholders."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; future performance of 10H and other drilling inventory; the ability of the Company to achieve near term production targets and operate at unrestricted levels upon receipt of final ministry approval of CPF-2; anticipated future oil production,, including production targets in Q1 2022; future development and growth prospects; and the timing of release of 2022 guidance. 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, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, failure to obtain final ministry approval in respect of CPF-2, 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, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

OIL AND GAS INFORMATION: References in this press release to peak rates, production records, daily production levels of PetroTal, average 7 day production levels of 10H and other short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. The Company cautions that such results should be considered to be preliminary.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's future production, production capacity 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 and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/113361


PetroTal Announces Exercise of Performance Warrants and Total Voting Rights

Calgary, AB and Houston, TX - February 4, 2022 - PetroTal Corp. (“PetroTal’ or the “Company”) (TSX-V: TAL, AIM: PTAL and OTCQX: PTALF) announces that it received a notice to exercise 1,000,000 Performance Warrants at a price of US$0.1869 per Common Share. Accordingly, PetroTal received US$186,900 in respect of the warrants exercised.

Following this warrant exercise, the Company will have 20,546,350 Performance Warrants outstanding. Application will be made for admission of the 1,000,000 common shares, which will rank pari passu with existing Common Shares, to trading on AIM ("Admission"), which is expected to occur on or around February 9, 2022.

Following Admission, the Company will have 831,942,270 common shares issued and there are no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL, AIM: PTAL and OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; and the impact of social disruption on the Company's operations, including a potential field shutdown at Bretana. All statements other than statements of historical fact may be forward-looking statements. Forward- looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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


PetroTal Announces TR-1 Notification of a New Major Shareholder - Fidelity International

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 27, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTCQX: PTALF) ("PetroTal" or the "Company") advises that it has received a TR-1 Standard form for notification of major holdings from Fidelity International dated January 26, 2022.

As indicated in the TR-1 form, as at January 24, 2022, Fidelity International held 42,315,097 shares of PetroTal representing approximately 5.1% total ownership.

Based on 830,942,270 common shares outstanding, and as far as the Company is aware, the current major shareholders of PetroTal are:

  • Meridian Capital International - 154,010,361 (18.5%)
  • Kite Lake Capital Management - 87,166,854 (10.5%)
  • Burggraben Holding AG - 67,399,012 (8.1%)
  • Encompass Capital Advisors LLC - 54,154,853 (6.5%)
  • Fidelity International - 42,315,097 (5.1%)

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

"We welcome Fidelity International into our major shareholder group, a strong indication of investor support for the operational/financial excellence and growth we offer."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/111817


PetroTal Commences Trading on the OTCQX Market in the United States

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 19, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) and (OTCQX: PTALF) ("PetroTal" or the "Company") is pleased to announce that is has upgraded from the Pink market to the OTCQX Best Market in the U.S. under the ticker symbol PTALF. U.S. investors can now find current disclosures and Real-Time Level 2 quotes for the Company on the OTC Markets website.

The OTCQX Best Market provides investors with a premium U.S. public market and is the highest tier on which over 11,000 U.S. and global securities trade. Upgrading to the OTCQX Market is an important milestone for PetroTal, as it provides transparent trading, visibility and accessibility for U.S. investors.

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

"This is an excellent initiative for PetroTal and we are very excited to be part of the OTCQX market. We hope to share our story with a wide range of U.S. investors that can now access PetroTal shares in a more transparent way."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) and (OTCQX: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/110730


PetroTal Provides Q4 and Year-End 2021 Operations and Liquidity Update

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - January 17, 2022) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) ("PetroTal" or the "Company") is pleased to provide the following updates:

Key Highlights

  • Q4 2021 production averaged 10,147 bopd, constrained by temporary oil delivery disruptions;
  • Oil production for 2021 was 8,966 bopd, up 58% from 5,675 bopd for 2020;
  • Wells 9H and 8H continue to perform significantly above internal expectations, with average production rates over the past five days of approximately 8,500 bopd and 6,700 bopd, respectively;
  • Production at the field is now again averaging approximately 20,000 bopd since January 12, 2022 with export routes, including the Northern Peruvian Pipeline (the "ONP"), fully functional;
  • Well 10H drilling operations continue according to plan with estimated completion in early February 2022;
  • Q4 2021 oil deliveries for export via Brazil were approximately 300,000 barrels and are expected to increase to approximately 240,000 barrels per month; and,
  • December 31, 2021 total cash of $74.4 million, including $29.5 million of restricted cash.

Q4 Production Update

PetroTal's production averaged 10,147 bopd in Q4 2021, impacted by unplanned and extended downtime of the ONP from social and protest issues at pump stations 1 and 5. October was the only month in the quarter with largely unrestricted production rates, with November and December having only 16 and five producing days, respectively, where all wells were producing fully.

As a result of wells 9H and 8H generating large initial production rates in the quarter, PetroTal was still able to average over 10,000 bopd in Q4 2021 and demonstrate quarter on quarter production growth of 7% despite only producing unconstrained for approximately 57% of the period. Included in Q4 2021, were five days where PetroTal averaged above 20,000 bopd.

Current field production is again at approximately 20,000 bopd, having produced at that rate for the past five days. As announced on December 16, 2021, PetroTal had to significantly constrain production, from that date until January 9, 2022, to an average of 5,006 bopd. This allowed the Company to manage storage capacity and barge availability due to pump station 1 bottlenecks, which have now been alleviated.

Well 10H Update

Drilling of the 10H well progressed according to plan, with its 1,200 meter horizontal section successfully reaching total depth. Well 10H is the longest horizontal well drilled to date in Peru and completion operations are now underway, with the well expected to be completed in early February 2022.

Exports via Brazil Expected to Increase in 2022

During Q4 2021, oil deliveries to Brazil were approximately 300,000 barrels with an all-in differential, marketing and transportation cost of approximately $21/bbl.

In December 2021, PetroTal executed a new sales contract to deliver up to 240,000 barrels per month to Brazil, and is currently working to advance the logistics to further increase export volumes by 50%. Including the current Iquitos Refinery point of sale, the expanded Brazil export route would allow PetroTal to market approximately 13,300 bopd without dependance on the ONP.

Strong Liquidity Management in Q4 2021

PetroTal continues to manage liquidity exceptionally well despite the route to market headwinds. PetroTal ended Q4 2021 with $74.4 million in total cash, of which $29.5 million was restricted, including $20 million dedicated to accretive acquisitions. Ending Q4 2021 cash was higher compared to internal forecast as a result of receiving a $15.8 million revenue true up payment for exported oil at Bayovar. Accounts receivable and accounts payable at year-end were approximately $0.5 and $54.0 million (11% due after Q1 2022), respectively. Accounts receivable balances were substantially lower in Q4 2021 due to December 2021 ONP sales disruptions caused by nearby protests.

CPF-2 Commissioned

PetroTal is pleased to announce that CPF-2 has been fully commissioned and is operational, thereby allowing field production capacity of 24,000 bopd, water disposal capacity of 100,000 barrels of water per day and oil storage of 90,000 barrels at the field.

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

"We are excited to start the new year with record production of 20,000 bopd, a solid base for ongoing growth. PetroTal will continue to manage our business to maximize cash flow and support stable operations for shareholders while always placing safety above all else.

"The Company is very supportive of community efforts and the active dialogue engagement that led to the reopening of pump stations 1 and 5. Our team has been working hard to find creative sales business solutions so 2022 can be a record year for the Company from cash flow and production perspectives."

ABOUT PETROTAL

PetroTal is a publicly traded, tri‐quoted (TSXV: TAL) (AIM: PTAL) (OTC Pink: PTALF) oil and gas development and production Company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's flagship asset is its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018. In early 2020, Petrotal became the second largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

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

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

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

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

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

Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; the impact of social disruption on the Company's operations; drilling, completions, workovers and other activities and the anticipated costs and results of such activities; the ability of the Company to achieve drilling success consistent with management's expectations; the ability of the Company to achieve near term production targets and operate at unrestricted levels; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup and the impact of delays thereon; oil production levels, including production 2022; sales expansion through alternative exports routes, including barging and trucking; the Company's expectations regarding netbacks and cash flow; the Company's proposals for collaboration with local communities; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price volatility, price differentials and the actual prices received for products, exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2020 and management's discussion and analysis for the three and nine months ended September 30, 2021 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

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

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

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production and production capacity, cash flow, liquidity and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/110420