TIDMPTAL
RNS Number : 5607A
PetroTal Corp.
30 September 2020
PetroTal Recommences Oil production at the Bretana Field
The Peruvian government and communities agree to funding
plan
Calgary, AB and Houston, TX - September 30, 2020-PetroTal Corp.
("PetroTal" or the "Company") (TSX--V: TAL and AIM: PTAL) is
pleased to announce the recommencement of oil production and
operations at the Bretana oil field. The recommencement of oil
production follows agreements between the indigenous communities in
the northeastern region of Peru (inclusive of Loreto, where Bretana
is located), Regional governments and the Central Government of
Peru, that will see enhanced funding available for these regions to
aid community projects.
Highlights
-- PetroTal recommenced operations at the Bretana oil field on
September 28, 2020, and as all seven wells continue to be gradually
brought into full operation, current production is approximately
11,000 barrels of oil per day ("bopd"), approaching the pre shut
down level of 11,500 bopd;
-- The indigenous communities and government bodies have reached
an agreement that will see increased funding for the local
communities;
-- Oil deliveries will commence to the Iquitos refinery
immediately, and the Northern Oil Pipeline ("ONP") at the Saramuro
Pump Station will be ready to receive deliveries of Bretana oil
when the barges arrive; and,
-- The Company's stringent Covid-19 protocols continue to ensure
that the camp remains safe and operates with minimal downtime.
Resolution between Communities and Governments
The Central Government has made three important announcements
tackling the social unrest, which was exacerbated by the Covid-19
crisis. These measures will provide a long-term solution to these
issues.
The first was Supreme Decree N 145-2020-PCM (1) signed by the
President (published August 28, 2020) establishing an investment
plan to bridge the income gap among the poor indigenous
communities, known in Spanish as the Plan de Cierres de Brechas
("PCB"). PetroTal strongly supports this initiative, which provides
a six-year financial commitment of approximately US $1.7 billion
(2) to support development of the communities, of which US $28
million will be designated for economic development of the local
communities over the next four months.
The second announcement was Ministerial Resolution N
268-2020-PCM (3) signed by the Prime Minister (published September
20, 2020) establishing a working group called "The Management
Committee for monitoring interventions and outcomes for the
development of the native communities and localities of the
provinces under the sphere of hydrocarbon activities in the
provinces of Maynas, Loreto, Datem del Maranon, Requena and Alto
Amazonas, of the department of Loreto", that will decide the
projects under the PCB and who would manage them.
The third announcement was a Decree of Urgency N 114-2020 (4)
signed by the President (published September 23, 2020) allocating
approximately US $250 million (5) to a list of infrastructure
projects throughout the country, with US $20 million (5) allocated
to the Loreto Region where Bretana is located. This decree
expedites the procurement process to ensure all the allocated funds
are properly deployed to maximize employment throughout all the
communities.
1) https://cdn.www.gob.pe/uploads/document/file/1268888/DS%20N%C2%B0%20145-2020-PCM.pdf
2) Related news article found at https://andina.pe/agencia/noticia-gobierno-destinara-6-mil-millones-soles-para-cerrar-brechas-la-amazonia-811705.aspx
3) https://cdn.www.gob.pe/uploads/document/file/1308319/RM%20N%C2%B0268-2020-PCM.pdf
4)
https://cdn.www.gob.pe/uploads/document/file/1317730/DECRETO%20DE%20URGENCIA%20Ndeg%20114-2020.pdf
5) https://cdn.www.gob.pe/uploads/document/file/1317749/ANEXOS%20DU%20N%C2%B0114-2020.pdf
PetroTal acknowledges the efforts made by the indigenous
communities and all levels of the Peruvian government to resolve
the recent social disruption and to ensure a long-term solution is
in place to minimize future disruptions. Going forward, PetroTal
will continue its dedication to community support, along with
focusing on sound environmental and corporate governance policies
as well as maintaining stringent Covid-19 protocols to ensure that
the camp remains safe and is operated with minimal downtime.
Bretana Oil Field Recommencement
With the full support from the local indigenous communities and
governments, PetroTal has recommenced operations at the Bretana oil
field. All seven wells have now commenced operation and are being
gradually optimized for effective reservoir management. Production
is currently at approximately 11,000 bopd, and expected to reach
the pre shut down level of 11,500 bopd, shortly.
While production was shut in at Bretana, Petroperu used that
time to carry out some maintenance work on the pipeline, which is
expected to be completed on time without affecting Bretana's oil
deliveries. Similarly, with the social unrest at Bretana that
originated at the pipeline now resolved, the Government expects to
have the pipeline social issues also resolved in time for the
pipeline to receive Bretana's oil production. In the meantime, the
Iquitos refinery operated continuously throughout the recent social
unrest, thereby allowing PetroTal to deliver oil from inventory
over the last month.
Liquidity Update
At September 29, 2020, PetroTal had cash resources of US $12
million, with accounts payable and accrued liabilities of
approximately US $36 million, a reduction of US $14 million from
the end of Q2 2020. Ongoing payments will be managed from expected
oil field revenues and internal cash resources. Pursuant to
contractual terms with our suppliers, approximately 30% of the
amount is not due until into 2021.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive
Officer, commented:
"PetroTal commends the efforts of all parties in reaching a
negotiated settlement that will ultimately benefit the indigenous
communities, the Peruvian government, and all operating companies,
including PetroTal. On behalf of PetroTal, I would like to
sincerely thank the PetroTal team for their continued dedication
during this period and for their contribution towards this
long-term community funding solution. Our corporate commitment is
to ensure all stakeholders benefit from the Bretana project,
including the local communities that support our Company."
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 its 100% working interest in Bretana
oil field in Peru's Block 95 where oil production was initiated in
June 2018, and in early 2020 became the second largest crude oil
producer in Peru with more than 10,000 bopd of production.
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.
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
Manuel Pablo Zuniga-Pflucker
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
Auctus Advisors LLP (Joint Broker)
Jonathan Wright / Rupert Holdsworth Hunt / Harry Baker
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; increased oil production volumes due to the reopening of
the Bretana oil field and resumption of oil production therefrom;
the effects and duration of the Funding Agreement; PetroTal's plans
regarding community support, the environmental and corporate
governance; and the ongoing effects of Covid-19 on the Company and
its employees. 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 reopening of existing
infrastructure, its ability to deliver production and the
anticipated capital expenditures associated therewith; successful
implementation of the Decree; prevailing commodity prices and
actual prices received for PetroTal's products; the availability
and performance of drilling rigs, facilities, pipelines, inventory
and barge storage capacity, other oilfield services and skilled
labour; royalty regimes; exchange rates; the application of
regulatory and licensing requirements; current legislation; the
success of future drilling and development activities; and general
economic conditions. 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. Please
refer to the risk factors identified in the Company's annual
information form for the year ended December 31, 2019 and
management's discussion and analysis for the three and six months
ended June 30, 2020 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.
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