Calgary, Alberta and Houston, Texas–(Newsfile Corp. – July 11, 2019) – PetroTal Corp. (TSXV: TAL) (AIM: PTAL) (“PetroTal” or the “Company“) is pleased to provide an update in respect of its operations and production at the Bretaña field in Block 95 (PetroTal: 100% Working Interest) in Peru.
- BN 95-3D well (the “3D”), which came online mid-June 2019 with initial production of 3,500 barrels of oil per day (“BOPD”) and averaged 2,875 BOPD over the first 24 days of production
- Full field Bretaña production averaged 3,000 BOPD in 2Q2019, ahead of analyst expectations, and averaged 5,350 BOPD since the 3D came online.
- Company has spud the BN 95-2WD well (the “2WD”) which will be the primary water disposal well
- Following completion of the 2WD, the Company plans to convert the existing water disposal well into an oil producer
- Social unrest in the Northern jungle of Peru has had minimal effect on PetroTal’s operations
Further to the Company’s announcement on 19 June 2019, the Company’s third oil well, which came online at an initial rate of approximately 3,500 BOPD, is now being produced at 3,100 BOPD. The well has an electric submersible pump (“ESP”) that will optimize future well productivity. Total production from the field since the 3D came online has averaged 5,350 BOPD and current daily production is approximately 5,000 BOPD. The Company has begun storing crude oil at Saramuro, Peru to be able to ship the first 50,000 barrel batch through the ONP pipeline, with subsequent batches expected to be of 100,000 barrels each.
Once the 2WD water disposal well is completed, PetroTal will begin a workover of the existing water disposal well, making it the Company’s fourth oil producer. The next phase of production facilities is being built and is expected to be in the field and begin commissioning by year-end 2019. This, alongside the drilling and completion of the BN 95-4H well (the next new well in the campaign), will provide the Company with the capacity to produce up to 10,000 BOPD.
Since July 5, the northern jungle region of Peru has been enduring social unrest as the local communities are demanding solution to a series of demands, including a larger share of the Government take towards the local populations where the crude oil is produced. This is something the Company supports, combined with the training of local officials responsible for deploying the money. Except for the Bretaña field, all other northern jungle producing fields are either shut or not being able to fiscalize its production. Pump station No. 5 of the Oil Northern Peru (“ONP”) pipeline was reopened yesterday, which should help normalize operations in the next few days. Nevertheless, the Company has had to curtail production, which has averaged 4,875 BOPD since the unrest began due to foreseen limits to storage capacity. The Company will keep investors informed regarding any downtime and production curtailments over the next few weeks.
Manolo Zuniga, President and Chief Executive Officer, commented:
“We are very pleased to have achieved quarter on quarter production growth of 300 percent, a direct result of the team’s success and experience. We averaged 3,000 BOPD in the second quarter and exceeded the production milestone of 500,000 total barrels of crude oil in June 2019. We are making good progress on the water disposal well and are excited to start the workover of the existing water disposal well making it the fourth oil producer in the Company’s brief history.
Our latest equity raise has allowed PetroTal to have a great deal of financial flexibility, with no debt. We will continue to optimize the capital structure, providing stakeholders exposure to a truly independent oil company with double digit growth through development drilling alone, complemented by substantial exploration potential at Osheki in Block 107. We continue to host companies in the data room to review the Osheki opportunity, with the potential of engaging a joint venture partner to drill the prospect in 2020.
It is a testament to PetroTal’s philosophy that the Bretaña field is the only one still producing normally during the protests. This is a reflection that the local communities believe we are working on behalf of all stakeholders, promoting the fair distribution and proper use of the government take from the Bretaña Project. Though we cannot guarantee Bretaña will not eventually be shut as a consequence of their demands, we would expect this would be for a relatively short period of time.”
For further information, please contact:
Executive Vice President and Chief Financial Officer
T: (713) 609-9101
President and Chief Executive Officer
T: (713) 609-9101
Mark Antelme / Jimmy Lea
Celicourt Communications (Financial PR)
T: 44 (0) 207 520 9261
James Spinney / Ritchie Balmer / Eric Allan
Strand Hanson Limited (Nominated & Financial Adviser)
T: 44 (0) 207 409 3494
John Prior / Emily Morris / George Price
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
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; drilling, completion and workover activities of oil producing and water disposal wells and the results and timing of such activities; the use of an ESP to optimize well productivity; transportation activities; the ability of the Company to achieve drilling success consistent with management’s expectations; anticipated future production; engaging a partner to drill the Osheki prospect; exit production in 2019; and future development and growth prospects. 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, 2018 and management’s discussion and analysis for the three months ended March 31, 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.
OIL AND GAS INFORMATION: 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, balance sheet, growth 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 Canadian Securities Administrators’ National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.
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.
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