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PetroTal Announces Fiscal Year-end Financial Results and Operations Update

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Calgary, Alberta and Houston, Texas–(Newsfile Corp. – April 24, 2019) – PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (“PetroTal” or the “Company“) is pleased to provide a summary of its 2018 year-end financial and operating results.

Selected financial, reserves and operational information is outlined below and should be read in conjunction with the Company’s audited consolidated financial statements (“Financial Statements”), management’s discussion and analysis (“MD&A”) and annual information form (“AIF”) for the year ended December 31, 2018, which are available on SEDAR at

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Thereafter, escalated 2 percent on January 1 of each year.

Future Development Costs

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

Proved $178.0 million
Proved + Probable $251.1 million
Proved + Probable + Possible $368.8 million

The future development costs are estimates of capital expenditures required in the future for PetroTal to convert the corresponding reserves to proved developed producing reserves.

In 2019, the Company drilled and completed a second oil producing well at Bretaña, the BN 95-2-2-2XD, on time and within budget. The well came online at approximately 2,250 bbl of oil per day (“BOPD”) in a vertical completion in the Vivian formation. The well, which reached total depth on April 9, 2019, was completed as an oil producer in the Vivian formation in the northern portion of the Bretaña structure. The well was brought online at an initial rate of approximately 2,250 barrels of oil per day (“BOPD”). This is an early production rate and more detailed production data will be announced in due course. The team also spud a third oil development well, the BN-95-3H, which will be a horizontal producer in the Vivian formation, and which is expected to come online in mid-June.

Manolo Zuniga, PetroTal’s President and Chief Executive Officer, stated:

“We are executing on multiple fronts and in 2018 we accomplished many milestones that will set the Company up for future success and growth. Our operations team has been hitting on all cylinders, bringing the field online early, either on or under budget, and moving into commercial production at year end. Our reserves report showed a significant increase in present value across all reserve categories. With our 2P pre-tax NPV-10 at approximately $535 million, we have grown the value to our stakeholders by 90 percent.”

“To date in 2019 we have drilled and completed the second producing oil well at Bretaña, having come online only one week ago at 2,250 BOPD. This rate was over the course of five days and we will provide more detail on the well and its production when we have sustained production data, to allow for a better stabilized rate. We have moved on with the spud of the third oil producing well which we expect to be online in mid-June. The original producer is still producing approximately 800 BOPD, in line with our internal expectations due to normal declines expected as water is produced from the aquifer that is the main drive mechanism for the Vivian formation.”

NEAR AND MEDIUM-TERM OBJECTIVES

  • Drill and complete up to four wells to materially contribute to production totals in 2019;
  • Install phase two production facilities in the field with oil production capacity of 10,000 BOPD;
  • Secure farm-out partner and drill high impact Osheki exploration well on Block 107;
  • Continue Bretaña development drilling and install future phases of production facilities; and
  • Look for strategic and synergistic acquisitions to expand the Company’s asset base in Peru.

FINANCIAL HIGHLIGHTS

The following table summarizes key financial highlights associated with the Company’s financial performance for the years ended December 31, 2018 and 2017. See the Financial Statements and MD&A for further details.

December 31, 2018
US$000s
December 31, 2017
US$000s
Net Revenues 9,994
Net Loss (4,621) (2,754)
Total Assets 96,097 98,766
Total Liabilities 18,570 16,723
Total Shareholders’ Equity 77,527 82,043

OTHER COMPANY UPDATES

Charles Fetzner, VP of Asset Development, resigned from the Company for personal family reasons effective as of April 18, 2019. Mr. Fetzner was a founder of PetroTal LLC, the original private company, in December 2015 and was part of the new management team following the completion of PetroTal’s go-public transaction on December 18, 2017.

Mr. Zuniga commented “We wish Chuck and his family the best and we fully understand his desire to spend time with his family at this time. Chuck was an integral part of our transition from a private company to public entity. Mr. Estuardo Alvarez-Calderon, VP of Exploration and Production, will assume Chuck’s responsibilities which include the important Osheki farm-in process. Again, we wish the Fetzner family the best.”

As previously announced on September 14, 2018 and October 31, 2018, the Corporation has issued an aggregate of 4,008,333 performance share units (“PSUs”) to certain officers of the Company. The original terms of the PSUs provided for vested in equal tranches over three years. The Board of Directors has amended the terms of the PSUs to provide that the PSUs awarded to executives will vest three years from the date of issuance. The Board believes the change to the vesting terms will strengthen the link between executive compensation and long-term shareholder value.

ABOUT PETROTAL

PetroTal is a publicly-traded, dual-listed (TSX-V: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal’s development asset is the Bretaña oil field in Peru’s Block 95 where oil production was initiated in June 2018. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company’s management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing and exploiting the Bretaña oil field. More information on the Company can be found at www.PetroTal-Corp.com.

For further information, please contact:

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

Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9101

Mark Antelme / Henry Lerwill
Celicourt Communications (Financial PR)
petrotal@celicourt.uk
T: 44 (0) 207 520 9261

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

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

Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release may contain 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 developing the Bretaña oil field on a modular basis; drilling and completion activities and the results of such activities; construction of production facilities; securing a farm-out partner in Osheki; future acquisitions; the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production and revenue; 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, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal’s products, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal’s geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company’s growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company’s production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Please refer to the risk factors identified in AIF and MD&A, which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about PetroTal’s prospective results of operations, production, NPV-10, future net revenue, future development costs 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 made as of the date of this press release and was provided 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/44295