TIDMPTAL
RNS Number : 8904V
PetroTal Corp.
11 April 2019
PetroTal Announces Year-end 2018 Oil Reserves
New report shows NPV-10 growth of 90% to $535 million for 2P
Reserves and $1.25 billion for 3P Reserves
Calgary, Alberta and Houston, Texas - April 11, 2019-PetroTal
Corp. ("PetroTal" or the "Company") (TSX-V: TAL and AIM: PTAL) is
pleased to provide a summary of the Company's 2018 year-end
reserves in the Bretaña field in Northern Peru. Reserves numbers
presented herein were derived from an independent reserves report
(the "NSAI Report") prepared by Netherland, Sewell &
Associates, Inc. ("NSAI") effective December 31, 2018. Unless
otherwise noted, all figures referred to in this press release are
denominated in U.S. Dollars.
2018 Year-end Reserve Highlights
-- Proved ("1P") Reserves estimated at approximately 17.9
million(1) barrels ("bbl") of oil gross;
-- Proved + Probable ("2P") Reserves estimated at approximately
39.4 million(1) bbl of oil gross;
-- Proved + Probable + Possible ("3P") Reserves estimated at
approximately 78.7 million(1) bbl of oil gross;
-- NPV-10 of approximately $535 million for 2P Reserves and $1.25 billion for 3P Reserves; and
-- 2P Reserves NPV-10 increase of 70%.
Note:
1. Reserves include a total of approximately 2,963.6 Mbbl (3P)
of oil for surface facility use across all categories (960.7 Mbbl
(1P) and 1,818.2 Mbbl (2P)). See "Summary of Oil Reserves and Net
Present Values as of December 31, 2018" for a summary of Company
reserves, which exclude these amounts.
The Company has certified total 2P reserves of 39.4 million
barrels of recoverable oil at the Bretaña field. The net present
value of before tax future net revenues discounted at 10 percent
("NPV-10") of 2P oil reserves is approximately $535 million. On a
1P Reserves basis, reserves increased by 22% to 17.9 million bbl
from 14.7 million bbl gross, with an associated NPV-10 increasing
three-fold to $151 million from $38 million. Additionally, the
NPV-10 of the 3P Reserves increased by 58%.
Manolo Zuniga, PetroTal's President and Chief Executive Officer,
stated:
"The increased NPV-10 is a result of lower than expected
development costs, partly as a result of using produced oil to
power the field. The lower development costs truly drive the NPV-10
of the project, where we see a major increase from $282 million to
$535 million. Even more important is the NPV-10 of the 3P reserves,
estimated at $1.25 billion, which underpins our future value, which
could primarily be obtained by increasing the field's recovery
factor."
2018 Year-end Reserves Summary
The summary below sets forth PetroTal's reserves as at December
31, 2018, as presented in the NSAI Report. The figures in the
following tables have been prepared in accordance with the
standards contained in the Canadian Oil and Gas Evaluation Handbook
(the "COGE Handbook") and the reserve definitions contained in
National Instrument 51-101 - Standards of Disclosure for Oil and
Gas Activities ("NI 51-101"). In addition to the summary
information disclosed in this press release, more detailed
information will be included in PetroTal's annual information form
for the year ended December 31, 2018 (the "AIF") to be filed on
SEDAR (www.sedar.com) and posted on PetroTal's website
(www.Petrotal-corp.com) in April 2019.
The reserves estimated by NSAI on the charts below exclude up to
three million barrels that are expected to be used for power
generation in the field.
Summary of Oil Reserves and Net Present Values as of December
31, 2018
Company Future Net Revenue
Heavy Oil Reserves(2) Before Income Taxes (USM$)(4)(5)(6)
-------------------------------------------------------------
(Mbbl)(1) Discounted Discounted Discounted Discounted Discounted
-----------------------
Category Gross Net(3) at 0% at 5% at 10% at 15% at 20%
--------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------
Proved Developed
Producing 1,559.0 1,559.0 75,696.3 61,506.5 51,624.6 44,472.9 39,112.0
Proved
Undeveloped 15,378.5 15,378.5 202,879.9 143,618.9 99,380.2 66,606.6 42,129.6
----------- ---------- ----------- ----------- ----------- ---------- ----------
Total Proved 16,937.5 16,937.5 278,576.2 205,125.4 151,004.8 111,079.5 81,241.6
Probable
Undeveloped 20,597.8 20,597.8 772,240.6 523,525.2 384,528.6 299,631.9 243,749.6
----------- ---------- ----------- ----------- ----------- ---------- ----------
Proved +
Probable 37,535.4 37,535.4 1,050,816.8 728,650.6 535,533.4 410,711.4 324,991.2
Possible
Undeveloped 38,278.9 38,278.9 1,684,251.1 1,060,626.2 718,814.0 516,783.2 389,791.8
----------- ---------- ----------- ----------- ----------- ---------- ----------
Proved +
Probable
+ Possible 75,814.2 75,814.2 2,735,067.9 1,789,276.8 1,254,347.5 927,494.6 714,783.0
Notes:
1. Totals may not add because of rounding. Mbbl are thousands of barrels.
2. PetroTal owns a 100 percent company gross interest and a 100
percent company net interest in these properties. Company reserves
exclude a total of approximately 2,963.6 Mbbl (3P) of oil for
surface facility use across all categories (960.7 Mbbl (1P) and
1,818.2 Mbbl (2P)).
3. Net reserves do not include deductions for royalty expenses
for net oil volumes; government royalties are included in property
and mineral taxes.
4. Based on NSAI's December 31, 2018 escalated price forecast.
See "Summary of Pricing and Inflation Rate Assumptions - Forecast
Prices and Costs".
5. It should not be assumed that the undiscounted or discounted
net present value of future net revenue attributable to the
Company's reserves estimated by NSAI represent the fair market
value of those reserves.
6. All future net revenues are estimated using forecast prices
and cost assumptions, arising from the anticipated development and
production of reserves, after the deduction of royalties, operating
costs, development costs and abandonment and reclamation costs but
before consideration of indirect costs such as administrative,
overhead and other miscellaneous expenses. There is no assurance
that the forecast prices and costs assumptions will be attained and
variances could be material. The recovery and reserve estimates of
the Company's reserves provided herein are estimates only and there
is no guarantee that the estimated reserves will be recovered.
Actual reserves may be greater than or less than the estimates
provided herein.
Summary of Pricing and Inflation Rate Assumptions - Forecast
Prices and Costs
The forecast cost and price assumptions assume increases in
wellhead selling prices and include inflation with respect to
future operating and capital costs. Crude oil benchmark reference
pricing, inflation and exchange rates utilized by NSAI as at
December 31, 2018 were as follows:
Period Ending Oil Price (US$/BBL)
------------------ -----------------------
12-31-2019 63.88
------------------- -----------------------
12-31-2020 68.20
------------------- -----------------------
12-31-2021 70.98
------------------- -----------------------
12-31-2022 73.35
------------------- -----------------------
12-31-2023 75.40
------------------- -----------------------
12-31-2024 77.35
------------------- -----------------------
12-31-2025 79.40
------------------- -----------------------
12-31-2026 81.61
------------------- -----------------------
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.
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 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.
Qualified Person Review
Manuel Pablo Zúñiga-Pflücker, President and CEO, has approved
the technical disclosure in this regulatory announcement in his
capacity as a qualified person under the AIM Rules. Mr. Zúñiga is a
petroleum engineer with over 30 years of industry experience. Mr.
Zúñiga holds a Bachelor of Science degree in Mechanical Engineering
from the University of Maryland and a Masters of Science degree in
Petroleum Engineering from Texas A&M University. Mr. Zúñiga is
a member of the Society of Petroleum Engineers.
For further information, please contact:
Greg Smith
Executive Vice President and Chief Financial Officer
Gsmith@Petrotal-Corp.com
T: (713) 609-9101
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@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; drilling and completion activities
and the results of such activities; the ability of the Company to
achieve drilling success consistent with management's expectations;
anticipated future production and revenue; future development and
growth prospects; and the timing of release of 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, 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 the Company's annual information form for the year
ended December 31, 2017 and management's discussion and analysis
for the three and nine months ended September 30, 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: This press release contains oil and gas
metrics, including "future development costs", which do not have
standardized meanings or standard methods of calculation and
therefore such measures may not be comparable to similar measures
used by other companies. Such metrics have been included herein to
provide readers with additional measures to evaluate the Company's
performance; however, such measures are not reliable indicators of
the future performance of the Company and future performance may
not compare to the performance in previous periods. Future
development costs are calculated as the sum of development capital
plus the change in future development costs for the 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, 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.
This information is provided by RNS, the news service of the
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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