Calgary, Alberta and Houston, Texas--(Newsfile Corp. - June 18, 2019) - PetroTal Corp (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce the third oil well in the Bretaña field is online, bringing total field current production to over 5,000 barrels of oil per day ("BOPD").
- BN 95-3D well had initial production of 3,500 BOPD
- Full field Bretaña production is now over 5,000 BOPD, in line with guidance
- Deviated completion to optimize cash flow, with option to sidetrack horizontally in 2020
- BN 95-3D is Company's first well completed with an electric submersible pump
- BN 95-3D expected to come in under budget
- Company will immediately begin drilling BN 95-2WD water disposal well
- Following the 2WD, recompletion of the existing water disposal well as an oil producer will commence
The Company's third oil well, which reached total depth in early June, 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 3,500 BOPD. This is an early production rate and more detailed production data will be announced in due course. The well has an electric submersible pump ("ESP") that will optimize future well productivity. The well, which originally scheduled to be completed horizontally, was brought online through a deviated completion. While drilling the section above the target Vivian formation, the service provider's directional drilling tools, needed to drill the horizontal section, had a mechanical failure that resulted in the need to sidetrack the well and complete it directionally. Even with the sidetrack, the well is expected to come in under the estimated US$13 million pre-drill budget.
The Company will now move forward to drill the BN 95-2WD, a water disposal well. The Company's water wells are expected to be able to handle reinjection rates of 30,000 barrels of water per day. Following the 2WD water injection well, management intends to undertake a workover of the existing 1WD water disposal well and complete it as an oil producer; the current 1WD water disposal well, drilled by the previous operator, was completed with limitations on injection capacity, and was drilled at the crest of the structure making it a candidate to become an oil producer. Estimated cost of the workover of this well is $2 million, and management believes this is the most effective use of capital. If successful, payout of the well could be faster than any other oil well in the field. The Company's future water wells will be drilled on the flanks of the field to optimize production.
Production from the Bretaña field, currently restricted to between 5,000 and 6,000 BOPD with existing processing facilities, is now over 5,000 BOPD, consistent with management's projections. The Company's second oil producer the 2XD, is producing at 2,400 BOPD, slightly ahead of rates announced at the end of May 2019. The two wells drilled by the Company, the 2XD and 3D, are supplying the field's oil capacity, and the 1XD discovery well, drilled by a previous operator, has been shut in to manage constraints in the field. The drilling and recompletion work addressed above are designed to ready the field for production to increase up to 10,000 BOPD later in the year, once phase two of oil processing equipment is installed and commissioned, and the BN 95-4H well (the next new well in the campaign) is drilled and completed.
Manolo Zuniga, President and Chief Executive Officer, commented:
"The mid-year objective of reaching total field production of over 5,000 BOPD is yet another key milestone that has been reached by the team. The BN 95-3D well came online at impressive rates, and although in its early days, is producing 3,500 BOPD. The team made a decision to complete the well vertically and deliver key cash flow, knowing that we can sidetrack the well into a horizontal completion at a later date, likely in 2020. We will now drill a water disposal well that will allow us to follow that work with a recompletion of the existing water well, turning it into an oil producer. The reservoir team believes the productive sands in the water well are as good, if not better, than the wells drilled to date. Our water disposal wells will be drilled on the flanks of the field rather than at the crest, where logs of the Vivian formation in the existing water disposal well look impressive."
For further information, please contact:
Executive Vice President and Chief Financial Officer
T: (713) 609-9101
President and Chief Executive Officer
T: (713) 609-9101
Mark Antelme / Jimmy Lea
Celicourt Communications (Financial PR)
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
OIL AND GAS INFORMATION: References in this press release to production test rates, initial test production rates, 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. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the Company cautions that the test results should be considered to be preliminary.
FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production, payout, cash flow, budget 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 Canadian Securities Administrators' National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
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