TIDMPTAL
RNS Number : 4277A
PetroTal Corp.
21 January 2020
PetroTal announces fully funded 2020 Capital Budget of US$99
million
Tripling Average Oil Production in 2020 to 13,500 bopd,
targeting to exit at 20,000 bopd
Calgary and Houston - January 21, 2020-PetroTal Corp.
("PetroTal" or the "Company") (TSX-V: TAL and AIM: PTAL), the
Peruvian focused E&P company, is pleased to announce its 2020
capital program of US$99 million, expected to be fully funded with
funds generated from operations and existing cash resources. This
capital program will allow PetroTal to become a free cash-flowing
company and reach 20,000 barrels of oil per day ("bopd") from the
Bretaña oil field, operated 100% by PetroTal, before year-end 2020.
All amounts are quoted in US dollars.
HIGHLIGHTS:
- Drill four horizontal oil production wells and a second water disposal well.
- Accelerate commissioning of the second phase of central
processing facilities ("CPF-2") to late August.
- Triple last year's average production to 13,500 bopd.
- Target a 2020 exit rate of 20,000 bopd.
2020 CAPITAL BUDGET
Based on the successful results of the most recent horizontal
wells (5H and 4H), PetroTal will drill four new horizontal oil
production wells in 2020 and a second water disposal well. The new
horizontal wells will have an average cost of $13 million per well,
and will include longer lateral sections (more than 1,000 meters)
in addition to being completed with automatic inflow control
devices ("AICD"). To accommodate associated water production,
another water disposal well will be drilled in the western flank of
the field at a cost of $9 million, inclusive of a coring program to
further refine Bretana's oil-in-place estimates.
Based on the Company's operating experience of optimizing oil
production rates in excess of nameplate facility capacities, CPF-2
is now designed for a nominal processing capacity of 15,000 bopd.
This will enable total field facility capacity to handle
approximately 24,000 bopd. It will also reduce the CPF-2 estimated
investment to $22 million, leading to a saving of approximately
$5.5 million from the original estimate. Enhancements to the
loading dock to handle larger oil volumes and optimal integration
of the CPF-1 and CPF-2, will require $9 million. Fast tracking
CPF-2 to commence commissioning by late August will allow us to
achieve our average oil production target along with handling
increased oil production coming from the new horizontal oil wells
to be drilled in 2020.
The remaining capital investments include the environmental
drilling permit for the Constitucion prospect in Block 107, an
environmental seismic permit over the Envidia prospect and a couple
of other leads in Block 95, as well as abandonment costs for a
legacy asset in accordance with regulatory obligations.
Approximately $8 million of the 2020 Capital Budget represents
projects carried forward from 2019, with about $4 million carried
forward for the completion and commissioning of the CPF-1.
PRODUCTION GUIDANCE
With this capital program, the Company expects 2020 average
production to range between 12,500 bopd and 14,500 bopd with an
average target of 13,500 bopd, representing a 227% increase from
the 2019 average production of 4,131 bopd, and 74% above the Q4
2019 average production of 7,757 bopd. The 2020 exit production
rate is expected to be 20,000 bopd, a significant increase from the
2019 exit rate of 13,300 bopd.
In the first half of 2020, the Company will drill one new oil
production well and one water disposal well after the drilling rig
has completed its annual maintenance program; resulting in expected
production for the first half to average 10,750 bopd, ranging
between 10,000 bopd and 11,500 bopd. This represents a 35% increase
from the Q4 2019 oil production average. In the second half of
2020, the Company will drill three new oil production wells and
expects that average production will increase to 16,500 bopd,
ranging between 15,500 bopd and 17,500 bopd.
CAPITAL PROGRAM FUNDING
Based on this production guidance and utilizing an average
forward strip Brent oil price of $61.60 per barrel, the Company
expects to fully fund the 2020 capital program with funds generated
from operations and available cash resources; setting the stage to
become a free cash flowing company by year-end 2020.
Manolo Zuniga, President and Chief Executive Officer,
commented:
"We are pleased with the success the Company has achieved to
date developing the Bretaña oil field and plan to build on that
success in 2020. PetroTal's Board has approved the 2020 capital
budget which is similar in scope to last year. and we are confident
in our ability to execute it. With each new well drilled, we better
understand the underlying reservoir, thereby enhancing our
confidence in continued, focused growth in our two Peruvian blocks.
The current and expected oil production levels provide a solid base
which optimizes our cost structure and generates significant funds
from operations.
Building on the 2018 goal of putting the original oil well
online in just five months, 2019 became a successful catalyst year
for determining the oil fields' capacity for strong organic growth.
2020 is the year we expect to grow into a Company with long term
production and cash flow stability. PetroTal remains committed to
bring about a beneficial change for the populations within its
scope of influence in the region. I sincerely thank the entire
PetroTal team and Board, as well as all our shareholders, for their
continued support.
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 Bretaña oil field in Peru's Block
95 where oil production was initiated in June 2018, six months
after acquisition, and within 18 months has exceeded the initial
10,000 bopd goal. Additionally, the Company has large exploration
upside and is actively engaged to find a partner to drill the
Osheki prospect and other prospects in Block 107. The Company's
management team has significant experience in developing and
exploring for oil in all of Peru's oil producing basins 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 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
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
Numis Securities Limited (Joint Broker)
John Prior / Emily Morris
T: +44 (0) 207 260 1000
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Nicholas Rhodes / Ashton Clanfield
Tel: +44 (0) 20 7710 7600
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This news release contains
forward-looking statements. More particularly, and without
limitation, this news release contains statements concerning
PetroTal's assessment of future plans and operations and the
appointment of new directors of the Company. When used in this
document, the words "will," "anticipate," "believe," "estimate,"
"expect," "intent," "may," "project," "should," and similar
expressions are intended to be among the statements that identify
forward-looking statements. The forward-looking statements are
founded on the basis of expectations and assumptions made by
PetroTal. Although PetroTal believes that the expectations
represented by such forward-looking statements are reasonable,
there can be no assurance that such expectations will be realized.
Any number of important factors could cause actual results to
differ materially from those in the forward-looking statements
including, but not limited to: PetroTal may not obtain the required
approvals from the TSX Venture Exchange and other factors more
fully described from time to time in the reports and filings made
by PetroTal with securities regulatory authorities. 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 six months ended June 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.
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
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January 21, 2020 02:01 ET (07:01 GMT)
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