TIDMPTAL
RNS Number : 5681F
PetroTal Corp.
10 March 2020
PetroTal Provides Liquidity Update
Continues to remain nimble even with lower oil prices
Calgary and Houston - March 10, 2020-PetroTal Corp. ("PetroTal"
or the "Company") (TSX-V: TAL and AIM: PTAL), the Peruvian focused
E&P company, notes the following in relation to the global
retraction in oil prices, and global market decline. All currency
amounts are in United States dollars.
Financial Impact
In response to the sudden reduction in the Brent oil price,
PetroTal has completed a sensitivity assessment of funds available
from operations ("netback") at varying oil price levels. As noted
in our February corporate presentation ( available on the Company's
website at www.petrotal-corp.com ) , Bretaña's netback at 15,000
barrels of oil per day ("bopd") was 55% of the Brent oil price at
$65/bbl and decreases to 37% at the Brent oil price of $30/bbl.
Based on 15,000 bopd
Brent Oil - $/bbl $65 $60 $55 $50 $45 $40 $35 $30
Netback - $/bbl $36 $33 $28 $24 $21 $18 $14 $11
Netback Ratio (%) 55% 54% 52% 48% 47% 45% 40% 37%
Based on 20,000 bopd
Brent Oil - $/bbl $65 $60 $55 $50 $45 $40 $35 $30
Netback - $/bbl $38 $34 $29 $25 $22 $19 $15 $12
Netback Ratio (%) 58% 57% 53% 50% 49% 48% 43% 40%
In some of our contracts, as Brent oil prices drop below
$50/bbl, PetroTal is entitled to negotiate lower fees and tariffs
to stabilize netbacks. These graduated cost reductions (included in
the above table) serve to increase netbacks by approximately $3/bbl
at $30 Brent.
Each barrel of oil production contributes positively towards
funding all administrative costs and the Company's capital
investments. PetroTal has the benefit of not having any debt or
interest expenses, and no concerns about loan covenants.
Since PetroTal maintains significant investment program
flexibility, the Company has the ability to be resilient and ensure
that it balances cash flow with expenditures. The Company's
previously announced $99 million capital investment program is
weighted to the last half of the year and will continue to be
monitored closely in light of the reduced oil price environment.
Furthermore, given the strong relationship PetroTal has with its
key contractors, the Company has agreed to manage payments with a
number of its contractors, allowing for ongoing operation of the
contractors' crews.
Well 6H - Update
Drilling of the 6H oil well continues on schedule and on budget,
and PetroTal expects to have this well on production before
mid-April 2020. Being on trend with the 5H and 4H wells, and
benefiting from the longer horizontal zone penetration, higher oil
production is expected from the 6H well. Inclusive of the 6H well,
we expect to achieve production of 15,000 bopd that, coupled with
the ongoing positive netbacks, will strengthen our financial
resources.
Manolo Zuniga, President and Chief Executive Officer,
commented:
"PetroTal remains confident in its ability to manage oil price
fluctuations through a disciplined financial approach. Our
assessments show that, based on current projections and pricing
environment, the Company will remain cash flow positive this year.
Importantly, if the global oil price retraction continues for an
extended period, PetroTal has the flexibility to defer capital
investment. At this stage, our 2020 oil production guidance remains
in effect and the expected success of the 6H well will contribute
significantly towards our target.
On behalf of our valued shareholders, please be assured that
we'll make the right decisions, at the right time, to ensure we
maintain the financial flexibility to be cash flow positive. I
would like to sincerely thank our team for their continued
laser-focus on all costing aspects, as well as our contractors for
their ongoing support of PetroTal's financial resources."
ABOUT PETROTAL
PetroTal is a publicly--traded, dual--quoted (TSXV: 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 flagship asset is the Bretaña oil field in Peru's Block
95 where oil production was initiated in June 2018, six months
after acquisition, and within 18 months has exceeded the initial
10,000 bopd goal. Additionally, the Company has large exploration
upside and is actively engaged to find a partner to drill the
Osheki prospect and other prospects in Block 107. The Company's
management team has significant experience in developing and
exploring for oil in all of Peru's oil producing basins 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 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
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 208 434 2643
Strand Hanson Limited (Nominated & Financial Adviser)
James Spinney / Ritchie Balmer
T: 44 (0) 207 409 3494
Numis Securities Limited (Joint Broker)
John Prior / Emily Morris
T: +44 (0) 207 260 1000
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Nicholas Rhodes / Ashton Clanfield
Tel: +44 (0) 20 7710 7600
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This news release contains
forward-looking statements. More particularly, and without
limitation, this news release contains statements concerning
PetroTal's assessment of future plans and operations for the
Company. When used in this document, the words "will,"
"anticipate," "believe," "estimate," "expect," "intent," "may,"
"project," "should," and similar expressions are intended to be
among the statements that identify forward-looking statements. The
forward-looking statements are founded on the basis of expectations
and assumptions made by PetroTal. Although PetroTal believes that
the expectations represented by such forward-looking statements are
reasonable, there can be no assurance that such expectations will
be realized. Any number of important factors could cause actual
results to differ materially from those in the forward-looking
statements including, but not limited to: PetroTal may not obtain
the required approvals from the TSX Venture Exchange and other
factors more fully described from time to time in the reports and
filings made by PetroTal with securities regulatory authorities.
Please refer to the risk factors identified in the Company's annual
information form for the year ended December 31, 2018 and
management's discussion and analysis for the three and nine months
ended September 30, 2019 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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
UPDEAKDEFELEEEA
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March 10, 2020 03:00 ET (07:00 GMT)
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