CALGARY and HOUSTON, Feb. 13,
2019 /CNW/ - PetroTal Corp. ("PetroTal" or the
"Company") (TSX-V: TAL and AIM: PTAL) is pleased to announce
its capital budget for 2019 and provide an operations update. All
amounts in this release are quoted in U.S Dollars.
2019 Capital Budget – Increasing Bretaña Field Production
- Investment aimed at increasing production to approximately
5,000 barrels of oil per day ("BOPD") in mid-2019
- Drilling campaign to include targeting three new oil producing
wells
- Drilling rig mobilized to Bretaña with the first well expected
to spud in February 2019
- Second phase of facilities to further increase oil production
capacity to be installed in September/October 2019
Operational Highlights
- Ongoing commissioning of oil production facilities throughout
Q4 2018 as expected
- Production from first producer stabilized at approximately
1,100 BOPD with over 200,000 barrels of crude oil produced to
date
- Independent evaluation of oil sample demonstrates lighter 19.4
degree API oil and lower oil viscosity
Capital Budget Expenditure
The Board of Directors has approved PetroTal's capital budget
for 2019, with key spending at Block 95 as follows:
-Drilling of three wells expected
to produce oil at an average cost of $12.1
million each
-Additional processing facilities to be installed in Q3 2019, with
an expected total spend in 2019 to approximate $16.0 million, increasing capacity to 10,000
BOPD
-One water disposal well for approximately $7.0 million
-Abandonment costs of approximately $2.0
million associated with legacy drilling site approximately
4.5 miles south of the Bretaña drill and production
pad
The Company does not intend to spend material amounts of capital
in Block 107 as the primary effort there is to secure a joint
interest partner, with assistance from GMP FirstEnergy in
London.
Manuel Zuniga, President and
Chief Executive Officer, commented:
"This capital budget is expected to allow the Company to ramp
up production to approximately 5,000 BOPD in mid-2019, in line with
expectations. We have negotiated excellent terms with our rig
contractor and other service providers, giving the Company
additional operational flexibility as we go into this three well
drilling program.
With an expected total of four wells online by the end of
2019, PetroTal will have reached an important inflection point in
the development of the Bretaña Field. This will
provide the momentum to further increase production to our target
of over 10,000 BOPD in 2020. We continue to monitor commodity
prices and retain the flexibility to adjust our budget if
required.
Overall, 2019 is set to be an exciting year for PetroTal and
its shareholders. We enter the year with a net liquidity position
of approximately $22.0 million, and
with the cash flow being generated from our operations, we are well
placed for the year ahead."
Operations Update
As stated above, the well the Company inherited from the
previous operator was placed on production in mid-2018 and has
accumulated over 200,000 barrels of crude oil production to
date. Current rates, following expected declines, approximate
1,100 BOPD. Total production and sales in the fourth quarter
of 2018, while the well was under Long Term Test, was 106,500 and
110,285 barrels of oil, respectively. At the request of the
local refinery, a second oil sample since acquisition was sent to
Bureau Veritas, an international certification agency, for
evaluation with the results showing the same 19.4 degree API, an
improvement over the 18.5 degree API estimated at acquisition in
December 2017, and also lower oil
viscosity.
The next expected Bretaña oil producer, which will be the
first oil well drilled by the Company, is expected to spud later
this month. The rig and accompanying equipment have been
mobilized to the Bretaña oil field and is currently being rigged
up. The well is expected to be online in late March 2019.
PetroTal has engaged GMP FirstEnergy's team in London to assist in the farm-out of Block
107. Significant interest has been shown in the asset and the
Company's intention is to sign a joint-interest partner in mid-2019
and to begin drilling the Osheki prospect in 2020. More information
on the Osheki prospect can be found in the Company's December 2018 AIM Admission Document, which is
available on the Company's website at www.petrotal-corp.com.
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.
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; rig mobilization, drilling, water
and other activities and the anticipated costs and results of such
activities the ability of the Company to achieve drilling success
consistent with management's expectations; anticipated future
production and revenue; drilling plans including the timing of
drilling; oil production levels, including average production, exit
production in 2019 and estimated ultimate recovery; decline rates;
the 2019 drilling program and capital budget; securing a joint
partner in respect of the development of Block 107; arrangements
with rig contractor and other service providers; future development
and growth prospects; and shareholder returns. 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. 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: Estimates of production and cost of
production included in this press release are based upon an
independent assessment completed by Netherland Sewell & Associates, Inc., a
qualified independent reserves evaluator as defined in Canadian
Securities Administrators' National Instrument 51-101 - Standards
of Disclosure for Oil and Gas Activities ("NI 51-101"), with an
effective date of June 30, 2018 and
prepared in accordance with the Canadian Oil and Gas Evaluation
Handbook and the standards established by NI 51-101.
This press release contains metrics commonly used in the oil
and natural gas industry. These terms have been calculated by
management and do not have a standardized meaning and may not be
comparable to similar measures presented by other companies, and
therefore should not be used to make such comparisons. Management
uses these oil and gas metrics for its own performance measurements
and to provide shareholders with measures to compare PetroTal's
operations over time. All oil and gas disclosure contained in this
press release complies with the requirements of NI 51-101.
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, operating 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.
SOURCE PetroTal Corporation
