TIDMPTAL
RNS Number : 8638T
PetroTal Corp.
19 November 2019
PetroTal Announces Third Quarter Financial Results and
Operations Update
Calgary, Alberta and Houston, Texas - November 19, 2019-PetroTal
Corp. ("PetroTal" or the "Company") (TSX-V: TAL and AIM: PTAL) is
pleased to provide a summary of its financial and operating results
as of September 30, 2019.
Selected financial and operational information is outlined below
and should be read in conjunction with the Company's unaudited
consolidated financial statements ("Financial Statements") and
management's discussion and analysis ("MD&A") for the three and
nine months ended September 30, 2019, which are available on SEDAR
at www.sedar.com and the Company's website at
www.petrotal-corp.com. All figures referred to in this press
release are denominated in U.S. dollars.
2019 THIRD QUARTER HIGHLIGHTS and OPERATIONAL UPDATE
Third Quarter Highlights:
-- Oil production increased to an average of 4,760 barrels of
oil per day ("BOPD"), a 58% increase from Q2, 2019.
-- Recorded net income of US$3.0 million for the third quarter
and US$1.9 million for the nine months period.
-- Drilled a new water disposal well.
-- Completed a workover on the existing water disposal well to
convert the well into an oil producer. Upon completion, this well
produced approximately 2,300 BOPD over a 30-day test period.
-- Continued with facility expansion and development of various oil sales venues.
-- Executed first transaction under the terms of the contract
with Petroperu to utilize the North-Peruvian Oil Pipeline and
placed 200,001 barrels of crude oil in the pipeline on August 25,
2019.
-- The Company's cash and cash equivalents position as at
September 30, 2019 was $20.5 million and not approximately $40
million, as stated in the Company's RNS dated October 21, 2019 as
set out below.
Subsequent to the Third Quarter:
-- Completed the BN 95--4H ("4H") horizontal well on time and
under budget by approximately $3.0 million using new technology to
maximize oil production.
-- The 4H initial four--day production rate of 6,200 BOPD
exceeded management's expectations, as well as its 30-day average
of 6,000 BOPD.
-- Interim upgrades to production facilities has increased production capacity.
-- Current Bretaña oil field production reached new record
production with the last 30-days averaging over 8,500 BOPD, now
with all five oil wells online.
-- Commenced drilling the BN 95--5H ("5H") well, which will be
the Company's second horizontal development oil well. The 5H is
expected to be online in December, coinciding with the
commissioning of the central production facility for Bretaña
("CPF-1").
-- The Company's cash position as at 31 October 2019 was US$21.1 million.
OPERATIONS UPDATE
The Company continued the development of the Bretaña oil field
and produced an average of 4,760 BOPD during the third quarter,
compared to 3,010 BOPD in the fiscal second quarter. PetroTal has
successfully completed the 4H well, the Company's first horizontal
well in the Bretaña oil field. The well had an approximately
500--meter lateral completion utilizing autonomous inflow control
device ("AICD") valves to maximize oil production. Initial
production from the well during the first four days of production
was 6,200 BOPD. The 4H well was drilled updip towards the crest of
the structure and provided data to confirm management's analysis of
the reservoir. The well was drilled under budget by approximately
$3.0 million (representing a savings of approximately 20 percent),
which will expedite payout of the well.
During the third quarter, the Company also upgraded the
production facilities, expanding PetroTal's production capacity to
over 7,500 BOPD. The Company plans to commission phase one of its
CPF-1 in December 2019, which will increase full field production
capacity to over 10,000 BOPD. Incremental implementation of phase
two of the Company's production facilities ("CPF--2") is planned
for July 2020. When CPF--2 is fully integrated by year--end 2020,
PetroTal will have the capacity to produce up to 20,000 BOPD.
Facility expansion is being implemented on a modular basis to time
facilities with well completions to most efficiently deploy
capital.
As a result of the Company's successful drilling campaign in
Block 95 to date, the Board of Directors approved an additional
$19.0 million of capital expenditures for 2019. Approximately $14.0
million will be deployed to drill and complete the 5H well, the
Company's second horizontal well which will target updip oil to the
northern portion of the structure; and $5.0 million will be
directed to bring additional production facilities to the field by
mid--2020, as an interim step to installing CPF--2 before year--end
2020. The Company expects this additional capital to yield an
additional 5,000 BOPD of capacity by mid--2020, for a total of
12,500 BOPD. Production from the well is expected to help the
Company achieve a targeted exit rate of 10,000 BOPD at year-end
2019 and fourth quarter average production of approximately 7,500
BOPD. The 5H well will also be completed with AICD valves in the
lateral section. The well is expected to come online simultaneously
with the facilities commissioning at year--end.
CLARIFICATION ON THE COMPANY'S CASH POSITION
It has come to management's attention during the preparation of
the Financial Statements that, the cash and cash equivalents amount
of approximately $40 million stated in the Company's RNS dated
October 21, 2019 was incorrect.
The Company's actual cash and cash equivalents position as at
September 30, 2019 was $20.5 million, and its total current assets,
which in addition to the cash and cash equivalents comprise of VAT
receivables ($9.9 million), trade & other receivables ($2
million), inventory ($8.5 million), and advances & prepaid
expenses ($0.78 million), totaled $41.7 million as at September 30,
2019. The main reason for the difference is that the RNS dated
October 21, 2019 incorrectly grouped these current asset items as
cash and cash equivalents.
Manolo Zuniga, President and Chief Executive Officer stated:
"PetroTal's focus on the Bretana oilfield development in the
third quarter represented a balanced approach between drilling and
facility enhancement. The Company is well positioned to handle
continued success from its drilling program.The strong performance
of the 4H well demonstrates the potential of horizontal wells in
this area and the benefits of using the latest engineering
technology.
I congratulate the PetroTal team on all their collaborative
efforts as we achieve record production levels. Innovation and
optimization in all our operations is an important element to
continued success. I also thank our shareholders for your continued
support and confidence."
FINANCIAL HIGHLIGHTS
The following table summarizes key financial highlights
associated with the Company's financial performance. See the
Financial Statements and the MD&A for further details.
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------------- --------------------------------------------------
2019 2018 2019 2018
----------------- ------------------------ ------------------------ ------------------------ ------------------------
$ thousands
except where
defined
----------------- ------------------------ ------------------------ ------------------------ ------------------------
Oil revenues
(before royalty
expense) 19,746 4,301 32,374 4,301
Expenses (16,729) (3,794) (30,449) (6,738)
Net income
(loss) 3,017 507 1,925 (2,437)
Net loss per
weighted
average
Common share -
basic and
diluted
($) 0.00 0.00 0.00 (0.00)
Exploration and
evaluation
asset
expenditures 610 965 1,005 13,904
Property plant
and equipment
expenditures 27,241 4,451 61,485 4,629
Net working
capital surplus
(deficit) (3,538) 28,258
Total assets 161,963 91,322
Total
liabilities 58,446 11,655
Shareholders'
equity 103,517 79,667
Common Shares
outstanding
(000's) 672,196 537,741
----------------- ------------------------ ------------------------ ------------------------ ------------------------
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 flagship asset is the Bretaña 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 Bretaña oil field. More
information on the Company can be found at
www.PetroTal--Corp.com.
For further information, please contact:
Doug 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
http://www.petrotal-corp.com
Mark Antelme / Jimmy Lea
Celicourt Communications
petrotal@celicourt.uk
T : 44 (0) 208 434 2643
James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494
John Prior / Emily Morris
Numis Securities Limited (Joint Broker)
T: +44 (0) 207 260 1000
Jonathan Wright / Hugh R. Sanderson
GMP FirstEnergy (Joint Broker)
T: +44 (0) 20 7448 0200
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 the Company's objectives; the
Company's proposed drilling, completions and other activities and
the anticipated results of such activities; cost controls and
savings; anticipated future production and revenue; future
development and growth prospects. 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. 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, availability of required equipment and services and
prevailing commodity prices. 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 MD&A and annual information form
for the year ended December 31, 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: The NSAI Report was prepared by NSAI,
an independent qualified reserves evaluator, in accordance with the
standards contained in the Canadian Oil and Gas Evaluation Handbook
(the "COGE Handbook") and the reserve definitions contained in
National Instrument 51--101 - Standards of Disclosure for Oil and
Gas Activities ("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, NPV10 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 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.
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
UPDGGGBAGUPBUAB
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November 19, 2019 02:01 ET (07:01 GMT)
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