TIDMPTAL
RNS Number : 9164O
PetroTal Corp.
13 October 2021
PetroTal Announces Q3 2021 Operations and Liquidity Update
Calgary, AB and Houston, TX - October 13, 2021- PetroTal Corp.
("PetroTal" or the "Company") (TSXV: TAL, AIM: PTAL and OTC: PTALF)
announces an operations and liquidity update for Q3 2021, and
updates on the ongoing community protests at pump station 5. All
amounts herein are in United States dollars ("USD") unless
otherwise stated.
Highlights:
-- Q3 2021 production averaged 9,508 barrels of oil per day
("bopd"), within 2% of previous guidance;
-- Q3 2021 exit production (last 7 day average in quarter) was
15,131 bopd, an increase of 89% over Q2 2021;
-- October 1 to October 11, 2021, average production of 14,218 bopd;
-- Well 8H has achieved payout in under 40 days on its $11.8
million capital cost, with continued robust average production of
7,485 bopd in Q4 2021 to date;
-- Well 7D continues to deliver strong production above 1,300
bopd, having achieved two times payout to date;
-- Well 9H drilling continues without delays, with first oil estimated in mid November 2021;
-- Water disposal maintenance efforts were completed and will
have long term field optimization benefits;
-- Brazil route to market sales option proving viable, with
PetroTal executing an export of 226,000 barrels in Q3 2021;
-- Strong liquidity position maintained, with total liquidity of
$58 million as at September 30, 2021; and,
-- PetroTal taking proactive initiatives to resolve recent pump
station 5 disputes between the local community and government.
Q3 2021 Production
PetroTal averaged oil production of 9,508 bopd for Q3 2021. This
was within 2% of revised Q3 2021 guidance of 9,697 and an 8%
increase over Q2 2021 average production of 8,839 bopd. PetroTal
exited Q3 2021 producing 15,131 bopd, an 89% increase over exit Q2
2021 production of 8,009 bopd. Q4 2021 production to date is 14,218
bopd, inclusive of approximately 5.4% of usual downtime.
Well 8H Update
Well 8H continues to perform at exceptional levels. During the
first 11 days of October, 8H has averaged 7,485 bopd. As of October
11, 2021, the 8H well has produced over 290,000 barrels at an
estimated $45/bbl netback and has now achieved payout on its $11.8
million capital cost.
Well 7D Update
Well 7D continues to exceed management expectations from a
deviated drilling perspective. 7D is still averaging more than
1,300 bopd. Since commencement of production in early May 2021, 7D
has produced approximately 400,000 barrels and has generated cash
flow approximately double its capital cost since coming online five
months ago.
Well 9H Update
Well 9H has reached its third week of drilling, is executing to
plan, and trending slightly ahead of completion schedule with
production commencement expected in the last half of November
2021.
CPF-2 On Track
The final crude processing phase for CPF-2 will be commissioned
and operational by mid November 2021. It is expected to be fully
operational by mid January, 2022. No additional COVID-19 delays
have materially impacted the field since previously announced in
late summer.
Brazil Route Proving Valuable
PetroTal executed an oil shipment through Brazil in Q3, 2021 for
226,000 barrels. PetroTal estimates it may ship two cargos via the
Atlantic route in Q4 2021.
Strong Q3 2021 Exit Liquidity
At September 30, 2021, PetroTal had a cash position of
approximately $58 million, of which $31 million is unrestricted,
$20 million is dedicated to accretive acquisitions and $7 million
is posted as collateral for commodity price hedges. The $16 million
reduction in overall liquidity was due to increased spending
related to the planned capex program and a net increase in accounts
receivable.
At September 30, 2021, accounts receivable from current oil
sales, including VAT, were $22 million, and accounts payable were
approximately $37 million. Pursuant to contractual terms with
suppliers, approximately $3.7 million (11%) of the accounts payable
balance is due after Q4 2021. Ongoing payments will be managed from
expected oil field revenues and internal cash resources. The
Company maintains access to an additional $25 million from the bond
issue for potential acquisitions and development drilling.
Community Protest Update
Protests at pump station 5 have shut down the Northern Peruvian
Pipeline ("ONP") and operations on October 5, 2021. Since then,
PetroTal has been involved with both the government and communities
to help resolve the issue peacefully.
PetroTal supports the struggle of the indigenous community and
continues to promote a peaceful and long-lasting resolution in the
very near future, especially given the new Government's public
commitment to all the communities of the Loreto Region where the
Company operates.
In the meantime, PetroTal continues to produce at normal rates,
delivering oil to Station 1 plus exports through Brazil, and
expects to have sufficient oil storage to maintain operations
during the disruption at Petroperu's pipeline.
Updated Corporate Presentation. Please see PetroTal's website for an updated version.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive
Officer, commented:
"On behalf of PetroTal, I would like to thank all our employees
and contractors for another outstanding quarter. We are
continuously reminded that alignment between the government,
communities, and PetroTal ensures an efficient continuance of
PetroTal's value proposition. PetroTal continues to support
negotiations between local communities and government social profit
initiatives. We are optimistic all stakeholders will find
resolutions in short order."
ABOUT PETROTAL
PetroTal is a publicly traded, tri--quoted (TSXV: TAL, AIM: PTAL
and OTC: PTALF) 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 its 100% working
interest in Bretana oil field in Peru's Block 95 where oil
production was initiated in June 2018. In early 2020, PetroTal
became the second largest crude oil producer in Peru. The Company's
management team has significant experience in developing and
exploring for oil in Peru and is led by a Board of Directors that
is focused on safely and cost effectively developing the Bretana
oil field. It is actively building new initiatives to champion
community sensitive energy production, benefiting all
stakeholders.
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
PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com
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
Auctus Advisors LLP (Joint Broker)
Jonathan Wright
T: +44 (0) 7711 627449
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; oil production levels, well payout production and the
ability of the Company to achieve near term production targets;
anticipated future production and revenue; resumption of operation
of the ONP and the timing thereof; PetroTal's access to exports
routes through Brazil; the Company's expectations regarding
netbacks and cash flow; and future development and growth
prospects. 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, the ability of the Ministry of Energy to
effectively achieve its objectives in respect of reducing social
conflict and collaborating towards continued investment in the
energy sector, reservoir characteristics, recovery factor,
exploration upside, prevailing commodity prices and the actual
prices received for PetroTal's products, including pursuant to
hedging arrangements, 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 volatility, price
differentials and the actual prices received for products, 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 most recent management's discussion and
analysis and the most recent annual information form 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
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. The Company cautions that such results
should be considered to be preliminary.
OIL REFERENCES: All references to "oil" or "crude oil"
production, revenue or sales in this press release mean "heavy
crude oil" as defined in National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities ("NI 51 101"). All references
to Brent indicate Intercontinental Exchange ("ICE") Brent.
NON-GAAP MEASURES: This press release contains financial terms
that are not considered measures under generally accepted
accounting principles ("GAAP") such as netback that do not have any
standardized meaning under GAAP and may not be comparable to
similar measures presented by other companies. Management uses
these non-GAAP measures for its own performance measurement and to
provide shareholders and investors with additional measurements of
the Company's efficiency and its ability to fund a portion of its
future capital expenditures. Netback is calculated by dividing net
operating income by barrels sold in the corresponding 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 and well payout production, 2021 capital
program and budget, cash flow 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 NI 51-101.
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