TIDMPTAL
RNS Number : 3144K
PetroTal Corp.
21 April 2020
PetroTal Completes Third Horizontal Well at the Bretana Oil
Field
Achieves record average quarterly production of 9,688 bopd in Q1
2020
Prudent management of cash resources and dividend suspension
Calgary and Houston - April 21, 2020-PetroTal Corp. ("PetroTal"
or the "Company") (TSX--V: TAL and AIM: PTAL) is pleased to provide
an update on its operations and production at the Bretana oil field
in Block 95 in Peru (100% working interest), together with a wider
Company financing update. All monetary amounts in this release are
in United States dollars.
HIGHLIGHTS
-- The BN 95-6H horizontal well ("6H") came online on April 10,
2020 and is currently producing approximately 5,750 barrels of oil
per day ("bopd"), in line with management's expectations. During
these ten days the well has achieved average production of
approximately 4,500 bopd.
-- The 6H well was completed on time and under the original $12.6 million budget.
-- The 6H well reached a lateral length of 1,178 meters and has
been completed using autonomous inflow control device ("AICD")
valves that restrict water inflow, to help maximize oil
production.
-- The Bretana oil field reached new record quarterly production
of approximately 9,688 bopd and sales of 9,937 bopd during the
first quarter of 2020.
-- Completed commissioning of the enhanced central production
facilities ("CPF-1"), bring overall oil production capacity to
between 16,000 bopd and 18,000 bopd.
-- In order to preserve liquidity, the Company will postpone
drilling the water disposal well that was scheduled to spud after
6H and, based on the enhanced CPF-1 production capacity, also delay
completion of the CPF-2 facilities, reducing the Company's overall
2020 capital expenditure budget by 33% to $66 million.
-- In light of global market uncertainty, and to further
conserve cash, the Company will postpone drilling the BN 95-7H
horizontal well until at least July 2020, instead of the previously
announced mid-May spud date.
-- As of March 31, 2020, the Company has $7.3 million of cash on
hand, which is prior to receipt of approximately $7.5 million, from
net proceeds of March oil sales.
Further Information
PetroTal has successfully completed the 6H well, the Company's
third horizontal well in the Bretana oil field, which is currently
producing 5,750 bopd, in line with management's expectations. The
well reached the target Vivian formation at a vertical depth of
2,698 meters. The 1,178-meter horizontal section inside the main
productive oil reservoir makes the 6H well the longest horizontal
well drilled to date in Peru. Based on the success in the BN 95-4H
("4H") and BN 95-5H ("5H") wells, the 6H well completion utilizes
additional AICD valves to maximize oil production. The 6H well was
drilled to the west of 5H, slightly downdip of the crest of the
structure, at a similar depth to the 4H. The well cost was
approximately $12.5 million, under budget by approximately $0.15
million.
The Company has postponed drilling the second water disposal
well, and now expects to spud the next oil well in July 2020, at
the earliest, with the drill rig now on standby status at
negotiated reduced rates. Decisions on additional 2020 capital
activity, including drilling additional oil wells, will be made in
due course. PetroTal will look to preserve capital by deferring
certain projects, such as drilling the previously mentioned water
disposal well and finalizing the CPF-2, as required. The Company
has discretion over when to undertake all major capital
projects.
Bretana Oilfield Operations and Operational Netbacks
The safety of the Company's workforce in Peru is of the utmost
importance, consequently, PetroTal has proactively implemented
measures to prevent the occurrence of COVID-19 at the Bretana oil
field, in conjunction with employees and the nearby community.
These measures include: the restricted movement of people and
goods; increased hygiene and cleanliness; social distancing and
remote working; deferring some projects to reduce the workforce on
site; working with the surrounding communities and developing
contingency plans for potential disruptions.
As announced on March 10, 2020, the Company expected to achieve
operational netbacks of $11 per barrel with its benchmark Brent
priced at $30 per barrel. To date, the Company has achieved
netbacks of $12 per barrel and continues to engage with all its
contractors to further optimize its cost structure. PetroTal will
now look to achieve netbacks of $13 per barrel, equivalent to 43%
at $30 Brent.
Because of the strict safety and health measures and relatively
high netbacks under the current Brent pricing environment, the
Bretana oilfield is the only oil field still producing in the
Maranon basin of Peru.
Financial Update
The Company continues to prudently manage its cash resources. In
order to increase its financial flexibility, PetroTal is in
discussions to establish a credit facility either based on the
increased year-end 2019 reserve valuation, or from the recently
completed production facilities investment. Having access to such a
credit facility will strengthen PetroTal's liquidity and allow it
to continue to progress the majority of its development plans. The
Company has additional flexibility to further reduce its cost
structure as needed. Such measures include further deferrals of
non-essential capital expenditures, seeking cost reductions from
suppliers and extension of payment terms. Taking these steps will
help to ensure the sustenance of resource operations in Peru, for
all parties.
Dividend Suspension
Due to the financial impact of the global oil price disruption,
the Company has decided to suspend declaration and payment of all
dividends in order to manage cash for business operations. The
Board of Directors will evaluate this decision on a semi-annual
basis going forward and expects to reinstate its dividend policy
when appropriate.
Manolo Zuniga, President and Chief Executive Officer,
commented:
"PetroTal is pleased to announce another strong drilling result,
with 6H being our third horizontal well drilled on time and under
budget. The 6H well complements the performance of the 4H and 5H
wells, and over the next few months, PetroTal will focus on
optimizing production from our seven producing oil wells and
preserving the Company's capital position. PetroTal is fortunate to
have loyal and understanding partners amongst its many contractors
and related Peruvian government ministries and agencies and we are
pleased to have already achieved an increase in netbacks to $12 a
barrel.
In closing, I want to sincerely commend the entire PetroTal team
for their ongoing determination to deal with the COVID-19 pandemic
and I look forward to keeping all of our stakeholders apprised of
developments over the coming months."
Qualified Person's Statement
Estuardo Alvarez-Calderon, the Company's Vice President,
Exploration and Development, who has over 35 years of relevant
experience in the oil industry, has approved the technical
information contained in this announcement. Mr. Alvarez-Calderon
received a Bachelor of Science degree in Geology from the
University of Texas at Austin and is registered on the Texas Board
of Professional Geoscientists
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 Bretana 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 Bretana oil field.
For further information, please see the Company's website at
www.petrotal-corp.com , the Company's filed documents at
www.sedar.com , or contact:
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
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Numis Securities Limited (Joint Broker)
John Prior / Emily Morris
T: +44 (0) 207 260 1000
READER ADVISORIES
FORWARD--LOOKING STATEMENTS: This press release contains 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, completion,
commissioning and workover activities of oil producing and water
disposal wells and facilities and the results and timing of such
activities; the use of AICD valves to optimize well productivity;
the ability of the Company to achieve drilling success consistent
with management's expectations; anticipated future production and
production capacity; the 2020 capital program; engaging a partner
to drill the Osheki prospect; the suspension of the Company's
dividend and the possible future reinstatement of a dividend;
future development and growth prospects; and the Company's ability
to remain operating in accordance with developing public health
efforts to contain COVID-19. 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 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. In addition, the Company cautions
that current global uncertainty with respect to the spread of the
COVID-19 virus and its effect on the broader global economy may
have a significant negative effect on the Company. While the
precise impact of the COVID-19 virus on the Company remains
unknown, rapid spread of the COVID-19 virus may continue to have a
material adverse effect on global economic activity, and may
continue to result in volatility and disruption to global supply
chains, operations, mobility of people and the financial markets,
which could affect interest rates, credit ratings, credit risk,
inflation, business, financial conditions, results of operations
and other factors relevant to the Company. 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.
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, production capacity, capital budget and
capital activity, cash flow, growth 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 approved by
management as of the date of this press release and was included
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.
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
UPDPPUGPCUPUUAG
(END) Dow Jones Newswires
April 21, 2020 02:00 ET (06:00 GMT)
Petrotal (LSE:PTAL)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Petrotal (LSE:PTAL)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024