PetroTal Announces Second Quarter Financial Results and Operations Update
Calgary, Alberta and Houston, Texas--(Newsfile Corp. - August 29, 2019) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to provide a summary of its financial and operating results as of June 30, 2019.
Selected financial and operational information is outlined below and should be read in conjunction with the Company's unaudited consolidated financial statements ("Financial Statements") and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2019, which are available on SEDAR at www.sedar.com and the Company's website at www.petrotal-corp.com. All figures referred to in this press release are denominated in U.S. dollars.
2019 SECOND QUARTER HIGHLIGHTS and OPERATIONAL UPDATE
- Produced approximately 280,000 barrels of oil ("BO") during the second quarter
- Production averaged 3,100 barrels of oil per day ("BOPD") versus 944 BOPD prior quarter
- Successfully drilled and completed two oil development wells
- Received approval of the Environmental Impact Assessment allowing for full field development
- Completed an upsized and oversubscribed placement of common shares, raising ~$24 million net
THIRD QUARTER SUBSEQUENT EVENTS
- Re-completed water disposal well into producer in August, initial production rate of 2,700 BOPD
- Increased oil production to approximately 5,500 BOPD in August 2019
- July and August (to date) 2019 cumulative production approximated 285,000 BO
The Company continued the development of the Bretaña oil field and produced an average of 3,100 BOPD during the quarter, compared to 944 BOPD in the 2019 first quarter.
The Company drilled and completed the BN 95-2XD and BN 95-3D wells in the northern section of the field. These two development oil wells allowed the Company to increase production to over 5,000 BOPD, as expected by management.
In August, the Company re-completed the existing water disposal well, drilled by the previous operator, and converted it to an oil producer ("BN 95-1"). The initial production rate of the BN 95-1 was approximately 2,700 BOPD.
Currently the Company is producing just over 5,500 BOPD, managing each of the wells at different pump rates due to capacity of facilities which are constrained to between 5,000 and 6,000 BOPD. Due to these capacity limits, since the BN 95-3D was completed, the BN 95-1XD well has been shut in.
The Company's field production was reduced in July to around 4,000 BOPD due to lack of storage during the recent pipeline downtime. Subsequently, the Company was able to complete the first sale through the northern oil pipeline, a batch of 200,000 BO, allowing the Company to ramp production back to current levels.
With recent drilling the success of the and the operational knowledge of the field engineers, the Company is confident it can reach the projected goal of 5,000 BOPD for this fiscal third quarter.
Also, the Company drilled a new water disposal well, the BN-2W, on the flanks of the field, which was placed into operation following the injectivity test. This well was required prior to re-completing the existing water disposal well. Injectivity tests showed capacity of the water disposal well at 40,000 barrels of water per day.
Additional facilities to grow oil production volumes to 10,000 BOPD by year-end are still on track, and the commissioning of those facilities is expected to begin in December 2019.
Manolo Zuniga, President and Chief Executive Officer, stated:
"The Company continues to meet targets and execute at a high level. The success of our development program has us at the upper limits of our facilities in the field, and our team is committed to optimizing production operations to assure we meet our targets. We continue to experience excellent results from the development program and that should give confidence to stakeholders that the team we have has the knowledge and experience to operate fields like Bretana.
Our successful capital raise has given us the confidence that we can accelerate the production ramp to 10,000 BOPD by year end, months ahead of our original plan. We have already started the procurement process to add facilities in mid-2020 to allow for another step increase in production capacity to 12,000-14,000 BOPD. We have consistently demonstrated capital discipline, and we continue to find ways to optimize field operations to unlock the value to our stakeholders."
The following table summarizes key financial highlights associated with the Company's financial performance. See the Financial Statements and the MD&A for further details.
|Six months ended June 30,||2019||2018|
|$ thousands except where defined|
|Oil revenues (before royalty expense)||12,628||-|
|Net loss per weighted average Common share - basic and diluted ($)||0.00||(0.00||)|
|Exploration and evaluation asset expenditures||395||12,939|
|Property plant and equipment expenditures||34,244||178|
|Net working capital surplus (deficit)||17,776||42,554|
|Common Shares outstanding (000's)||672,196||537,741|| |
PetroTal is a publicly‐traded, dual‐listed (TSXV: TAL) (AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal's development asset is the Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, six months after acquisition. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field. More information on the Company can be found at www.petrotal-corp.com.
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
T : 44 20 8434 2754
James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494
John Prior / Emily Morris
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
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 the Company's objectives; the Company's proposed drilling, completions and other activities and the anticipated results of such activities; cost controls and savings; anticipated future production and revenue; future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, the availability and performance of drilling rigs, facilities, pipelines, 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, availability of required equipment and services and prevailing commodity prices. 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 the Company's MD&A and annual information form for the year ended December 31, 2018 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 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, 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 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 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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