PetroTal Corp. - Closing of Block 131 Acquisition
02/12/2024 07:00
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RNS Number : 3166O PetroTal Corp. 02 December 2024
PetroTal Announces Closing of Block 131 Acquisition
Calgary, AB and Houston, TX - December 2, 2024-PetroTal Corp. ("PetroTal" or
the "Company") (TSX: TAL, AIM: PTAL and OTCQX: PTALF) is pleased to announce
that it has closed the acquisition of a 100% working interest in Peru's Block
131, as originally disclosed on May 8, 2024, pursuant to which the Company
acquired all of the issued and outstanding shares of CEPSA Peruana, S.A.C.
("CEPSA Peru"), which represents the entire Peruvian business unit of
Compañía Española de Petróleos S.A. ("CEPSA").
Manuel Pablo Zúñiga-Pflücker, President and Chief Executive Officer,
commented:
"The acquisition of Block 131 represents an important milestone for PetroTal,
and a pivotal step in the Company's growth strategy. Importantly, Block 131
diversifies our production base within Peru, establishing a new platform for
future production and reserves growth.
PetroTal's technical team has already identified numerous synergies between
the Block 131 assets and our existing operations at Block 95. Similar to the
strategy we have already successfully employed at Bretaña, we plan to apply
modern drilling techniques at the Los Angeles field, which has significant
unutilized facility capacity. We are currently finalizing our development plan
for the assets and look forward to providing more details at the appropriate
time."
Key Highlights of the Acquired Assets
The Los Angeles field at Block 131 has produced an average of 817 barrels of
light oil per day ("bopd") from January 1 to September 30, 2024. The on-site
facility infrastructure site was built to accommodate throughput of up to
5,500 bopd, providing a clear runway for production growth and improved unit
operating cost structure. The produced oil is 45°API, which offers potential
for marketing synergies with PetroTal's heavy Bretaña crude. Additional
highlights include:
· Visibility for low-cost, light oil production and reserve additions
in the near-term, with upside resource potential in deeper, unproduced zones.
· PetroTal estimates remaining Proved recoverable reserves are 2.0
million barrels ("bbls") of light oil, and 4.2 million bbls of Proved plus
Probable reserves. PetroTal sees upside to reserve bookings given
multi-horizon reservoir potential and improved geophysical interpretations.
· Blending of Block 131's light oil production may allow PetroTal to
increase sales of heavy Bretaña crude to the Iquitos refinery, at improved
differentials to the Brent benchmark.
Asset Background
The Los Angeles oil field at Block 131 was discovered by CEPSA Peru in 2013.
As of September 30, 2024 the field has produced a total of approximately 7.8
million bbls. Block 131 is held under an exploration and production license
agreement expiring in 2038, subject to a 23.48% royalty rate at field
production levels under 5,000 bopd, with a similar scaling factor to Block 95
above 5,000 bopd. All produced oil is currently sold to PetroPeru, Peru's
state-owned oil company, at Pucallpa. The oil is then transported by barge
along the Ucayali River (passing PetroTal's Bretaña oil field) to the Iquitos
refinery.
Qualified Person's Statement
Max Torres, the Vice President of Exploration for PetroTal, has approved the
technical information contained in this announcement. Mr. Torres has more than
35 years of relevant professional experience in the oil and gas industry. He
holds a Bachelor of Science degree in Geology from the Universidad Nacional de
Tucumán, Argentina, and a Master of Science degree from Georgia State
University.
The recovery and reserve estimates provided in this news release are estimates
only, and there is no guarantee that the estimated reserves will be recovered.
Actual reserves may eventually prove to be greater than, or less than, the
estimates provided herein.
ABOUT PETROTAL
PetroTal is a publicly traded, tri‐quoted (TSX: TAL, AIM: PTAL and OTCQX:
PTALF) 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 its 100% working interest in the Bretaña Norte oil field in
Peru's Block 95, where oil production was initiated in June 2018. In early
2022, PetroTal became the largest crude oil producer in Peru. The Company's
management team has significant experience in developing and exploring for oil
in Peru and is led by a Board of Directors that is focused on safely and cost
effectively developing the Bretaña oil field. It is actively building new
initiatives to champion community sensitive energy production, benefiting all
stakeholders.
For further information, please see the Company's website at
www.petrotal-corp.com (http://www.petrotal-corp.com) , the Company's filed
documents at www.sedarplus.ca (https://www.sedarplus.ca/landingpage/) , or
below:
Camilo McAllister
Executive Vice President and Chief Financial Officer
Cmcallister@PetroTal-Corp.com
T: (713) 253-4997
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101
PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : +44 (0) 20 7770 6424
Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / James Spinney / Robert Collins
T: +44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
T: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton / David McKeown / Georgia Langoulant
T: +44 (0) 20 7418 8900
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This press release contains 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; the anticipated benefits of the
acquisition of CEPSA Peruana, S.A.C. (the "Acquisition"), including the impact
of the Acquisition on the Company's operations, reserves, oil production
levels and production capacity and overall strategy; expectations with respect
to the sufficiency of current infrastructure to support up to 5,500 bopd; and
development and drilling plans for the assets acquired pursuant to the
Acquisition (the "Assets"). 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", "intend" and similar expressions. The
forward-looking statements provided in this press release are based on
management's current belief, based on currently available information, as to
the outcome and timing of future events. 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, the ability to obtain and maintain
necessary permits and licenses, the ability of government groups to
effectively achieve objectives in respect of reducing social conflict and
collaborating towards continued investment in the energy sector, reservoir
characteristics, recovery factor, exploration upside, prevailing commodity
prices and the actual prices received for PetroTal's products, including
pursuant to hedging arrangements, the availability and performance of drilling
rigs, facilities, pipelines, other oilfield services and skilled labour,
royalty regimes and exchange rates, the impact of inflation on costs, 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,
future river water levels, the Company's growth strategy, general economic
conditions, availability of required equipment and service; and the successful
integration of the Assets into PetroTal's operations. PetroTal cautions that
forward-looking statements relating to PetroTal are subject to all of the
risks, uncertainties and other factors, which may cause the actual results,
performance, capital expenditures or achievements of the Company to differ
materially from anticipated future results, performance, capital expenditures
or achievement expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially from those set
forth in the forward-looking statements include, but are not limited to,
unforeseen difficulties in integrating the Assets into PetroTal's operations;
incorrect assessments of the value of benefits to be obtained from
acquisitions and exploration and development programs (including the
Acquisition); 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), business performance, legal and
legislative developments including changes in tax laws and 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, credit ratings and risks, fluctuations in interest
rates and currency values, changes in the financial landscape both
domestically and abroad, including volatility in the stock market and
financial system, wars (including Russia's war in Ukraine and the
Israeli-Hamas conflict), regulatory developments, commodity price volatility,
price differentials and the actual prices received for products, 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, changes in the financial
landscape both domestically and abroad (including volatility in the stock
market and financial system) and the occurrence of weather-related and other
natural catastrophes. Readers are cautioned that the foregoing list of factors
is not exhaustive. Please refer to the annual information form for the year
ended December 31, 2023 and the management's discussion and analysis for the
three months ended June 30, 2024 for additional risk factors relating to
PetroTal, which can be accessed either on PetroTal's website at
www.petrotal-corp.com (http://www.petrotal-corp.com/) or under the Company's
profile on www.sedarplus.ca (https://www.sedarplus.ca/landingpage/) . 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 REFERENCES: All references to "light oil" in this press release mean
"light crude oil" as defined in Canadian National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). All
references to "heavy oil" in this press release mean "heavy crude oil" as
defined in NI 51-101.
RESERVES DISCLOSURE. All reserves values and ancillary information contained
in this press release relating to the Assets are derived from an independent
assessment of reserves attributable to the Assets, which was completed by
Netherland Sewell and Associates Inc. ("NSAI"), a qualified independent
reserves evaluator as defined in NI 51-101, with an effective date of March
31, 2024 (the "Reserves Report"), and prepared in accordance with the most
recent publication of the Canadian Oil and Gas Evaluation Handbook ("COGEH")
and the standards established by NI 51-101. Estimates of reserves for
individual properties may not reflect the same level of confidence as
estimates of reserves for all properties, due to the effect of aggregation.
There is no assurance that the forecast price and cost assumptions applied by
NSAI in evaluating PetroTal's reserves will be attained and variances could be
material. The recovery and reserve estimates of PetroTal' crude oil reserves
provided herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil reserves may be greater
than or less than the estimates provided herein. There are numerous
uncertainties inherent in estimating quantities of crude oil reserves. The
reserve information set forth herein are estimates only. References to
recoverable reserves in this press release include proved (1P) reserves and
proved plus probable (2P) reserves. Proved reserves are those reserves that
can be estimated with a high degree of certainty to be recoverable. It is
likely that the actual remaining quantities recovered will exceed the
estimated proved reserves. Probable reserves are those additional reserves
that are less certain to be recovered than proved reserves. It is equally
likely that the actual remaining quantities recovered will be greater or less
than the sum of the estimated proved plus probable reserves. Proved developed
producing reserves are those reserves that are expected to be recovered from
completion intervals open at the time of the estimate. These reserves may be
currently producing or, if shut-in, they must have previously been on
production, and the date of resumption of production must be known with
reasonable certainty. Undeveloped reserves are those reserves expected to be
recovered from known accumulations where a significant expenditure (e.g., when
compared to the cost of drilling a well) is required to render them capable of
production. They must fully meet the requirements of the reserves category
(proved, probable, possible) to which they are assigned. Certain terms used in
this press release but not defined are defined in NI 51-101, CSA Staff Notice
51-324 - Revised Glossary to NI 51-101, Revised Glossary to NI 51-101,
Standards of Disclosure for Oil and Gas Activities ("CSA Staff Notice 51-324")
and/or the COGEH and, unless the context otherwise requires, shall have the
same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH,
as the case may be.
FOFI DISCLOSURE: This press release contains future-oriented financial
information and financial outlook information (collectively, "FOFI") about
PetroTal's prospective results of operations and production results 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
and its management believe that FOFI has been prepared on a reasonable basis,
reflecting management's best estimates and judgments, and represent, to the
best of management's knowledge and opinion, the Company's expected course of
action. However, because this information is highly subjective, it should not
be relied on as necessarily indicative of future results. 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. Changes in forecast commodity prices, differences in the
timing of capital expenditures, and variances in average production estimates
can have a significant impact on the key performance measures included in
PetroTal's guidance. The Company's actual results may differ materially from
these estimates.
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