PetroTal Corp. (TSX:LON:PTAL) 2019 Year-End Oil Reserves and Operational Update

20% increase in 1P Reserves to 21.5 million barrels and a 21% increase in 2P Reserves to 47.7 million barrels

Calgary and Houston – February 18, 2020-PetroTal Corp. (“PetroTal” or the “Company”) (TSX-V: TAL and AIM: PTAL), the Peruvian focused E&P company, is pleased to announce the results of its 2019 year-end reserve evaluation by Netherland, Sewell & Associates, Inc. (“NSAI”) for the Bretana oil field, operated 100% by PetroTal, and to provide an update on current activity and production. All currency amounts are in United States dollars (unless otherwise stated) and comparisons refer to December 31, 2018.

HIGHLIGHTS:

· Proved (“1P”) reserves increased by 20%, to 21.5 million barrels (“mmbbl”) from 17.9 mmbbl, Proved plus Probable (“2P”) reserves increased by 21% to 47.7 mmbbl from 39.4 mmbbl and Proved plus Probable and Possible (“3P”) reserves increased by 8% to 84.8 mmbbl from 78.7 mmbbl;

· Related to 2019 oil production of 1.5 mmbbl, reserve additions replaced 240% in 1P reserves, 553% in 2P reserves and 407% in 3P reserves; Bretana’s reserve life index for 1P and 2P reserves is now 7.7 years and 17.0 years, respectively;

· Net Present Value (before tax, discounted at 10%) (NPV-10) is calculated at $434 million ($20.19/bbl) for 1P reserves, $1.1 billion ($23.02/bbl) for 2P reserves and $1.9 billion ($22.11/bbl) for 3P reserves;

o Using the 2019 year-end Brent oil price strip, NPV-10 is calculated at $280 million for 1P reserves, $722 million for 2P reserves and $1.2 billion for 3P reserves;

· The successful 2019 development program combined with all future development and abandonment costs represent total finding and development costs of $12.04/bbl for 1P reserves, $5.32/bbl for 2P reserves and $4.06/bbl for 3P reserves;

· Original oil in place (“OOIP”) estimates for each category of reserves have also increased, with the 2P estimate increasing from 329 mmbbl to 364 mmbbl;

· NSAI attributes a corresponding 2P recovery factor of 13.6%, increased from 12% at year-end 2018;

· On a 2P basis, this represents a recycle ratio of 6.5 times, based on the total $5.32/bbl finding and development cost relative to a netback of $35/bbl (at $65/bbl Brent oil price);

· Drilling has commenced for the Bretana 6H well, planned to have the longest lateral to date with an estimated drill time of 60 days; and

· Current oil production at Bretana is approximately 10,000 barrels of oil per day (“bopd”).

2019 Year-end Reserves Summary

The summary below sets forth PetroTal’s reserves as at December 31, 2019, as presented in the independent reserves report prepared by NSAI. The figures in the following tables have been prepared 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”). In addition to the summary information disclosed in this announcement, more detailed information will be included in PetroTal’s annual information form for the year ended December 31, 2019 (the “AIF”) to be filed on SEDAR (www.sedar.com) and posted on PetroTal’s website (www.Petrotal-corp.com) in April 2020.

OPERATIONS UPDATE

The Company commenced drilling the Bretana 6H well on February 17, 2020, following successful completion of the annual rig maintenance program. This well will take approximately 60 days to drill and complete and is expected to have a 1,100-meter lateral section; longer than the 5H (863 meters) and 4H (500 meters) wells. Following 6H, the Company will drill a second water disposal well followed by three other horizontal oil wells. PetroTal’s current oil production is approximately 10,000 bopd. Production has fluctuated during the commissioning of the Central Processing Facility which commenced in late December and is now nearing completion.

Manolo Zuniga, President and Chief Executive Officer, commented:

“Following the Company’s successful drilling campaign in 2019, we are very pleased to see a meaningful upgrade of reserves in the 1P and 2P categories. PetroTal is glad to see that NSAI’s 2P OOIP estimate now approximates our internal estimate. We are confident that future production data will substantiate the higher recovery factors, and in the end, all of the above serves to create value for our stakeholders.

We look forward to achieving further growth in 2020, with new oil wells and increases in recovery factor, and I would like to sincerely thank our team, as well as our shareholders for their ongoing support of PetroTal.”

Full Update Link www.share-talk.co.uk/


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