REG - PetroTal Corp. - 2024 Year-End Oil Reserves

PetrotalAnnouncement

20/02/2025 07:15

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RNS Number : 8443X  PetroTal Corp.  20 February 2025

PetroTal Announces 2024 Year-End Oil Reserves

 

 

Calgary, AB and Houston, TX - February 20, 2025 - PetroTal Corp. ("PetroTal"
or the "Company") (TSX: TAL, AIM: PTAL and OTCQX: PTALF) is pleased to
announce the results of its 2024 year-end reserve evaluation (the "NSAI
Report") by Netherland, Sewell & Associates, Inc. ("NSAI"). All currency
amounts are in United States dollars unless otherwise stated.

Highlights:

·    1P and 2P reserves of 67.1 million barrels of oil ("mmbbls") and
113.7 mmbbls, respectively;

·    Replaced 293% and 208% of 1P and 2P reserves, respectively;

·    PDP reserve value per share increased 68% year-on-year, to $0.89
(C$1.22, or £0.68);

·    PDP and 1P reserve life index ("RLI") increased to 7.0 years and 10.3
years, respectively, while 2P RLI is estimated at 17.5 years;

·    Bretana OOIP estimate increases to 494 mmbbls in the 2P case,
compared to 329 mmbbls at PetroTal's inception.

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer,
commented:

"PetroTal's 2024 year-end reserves evaluation represents a satisfying
conclusion to a successful year for the Company. Proven reserves for the
Bretana oil field now exceed 60 million barrels. Including the 23 million
barrels that the field has already produced to date, Bretana has quadrupled in
size since we began our development program in 2018.

The intrinsic value of PetroTal's reserve base has grown substantially as well
- our Proven reserves are now worth more than $1.0 billion on a PV10 After Tax
basis. This reflects strong returns on our invested capital, which have
compounded as our development program has grown over the past few years. The
Bretana field is a world-class asset; we are constantly looking for new ways
to maximize its value, whether by optimizing the field development plan, or
opening up new export routes for our product.

Block 131 and its adjacent TEA blocks are exciting additions to our portfolio,
which we see as strong complements to the Bretana growth story. The Los
Angeles field is already providing a preview of what's to come with NSAI
attributing an additional 13 million barrels of original oil in place ("OOIP")
compared to its pre-acquisition evaluation. We look forward to providing
additional updates as 2025 progresses."

 

Summary of Year-End 2024 Reserves

The following tables summarize PetroTal's key reserve information as at
December 31, 2024, as presented in the reserves report prepared by NSAI, an
independent qualified reserves evaluator. Reserve volumes are presented on
PetroTal 100% working interest before royalty basis; in certain tables the
columns may not add due to rounding differences.

PetroTal's reserve estimates have been prepared in accordance with the
standards contained in the most recent publication of the Canadian Oil and Gas
Evaluation Handbook (the "COGEH") 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, 2024 (the "AIF") to be
filed on SEDAR+ (www.sedarplus.ca (https://www.sedarplus.ca/landingpage/) )
and posted on PetroTal's website (www.petrotal-corp.com) in March 2025.

Year-End 2024 Crude Oil Reserves Summary - Gross, PetroTal 100% Working
Interest (mmbbls)

 CATEGORY                            Bretana  Los Angeles  PetroTal  PetroTal  YoY

                                     YE24     YE24         YE24      YE23      Change
 Proved
        Developed Producing          44.8     0.8          45.5      28.6      +59%
        Undeveloped                  18.2     3.4          21.6      19.5      +11%
 Total Proved                        62.9     4.2          67.1      48.0      +40%
        Probable                     45.0     1.6          46.6      52.1      -11%
 Total Proved + Probable             108.0    5.8          113.7     100.2     +14%
        Possible                     98.7     1.0          99.6      99.5      0%
 Total Proved + Probable + Possible  206.6    6.7          213.3     199.6     +7%

 

Growth in Proved reserve categories is due to a relatively active development
drilling program in 2024 (PetroTal drilled 7 development wells in 2024,
compared to 3 wells in 2023), which converted significant volumes from
Probable reserves to higher value Proved categories. Extended production
history from existing wells also contributed to improved confidence in decline
profiles. Reserves growth in the 2P and 3P categories is a result of updates
to the Bretana field development plan, which incorporates 8 and 14 new
development wells in the respective reserve categories. NSAI's production
forecasts include the ONP pipeline as a viable export route, facilitating
additional export volumes beginning in 2027. However, PetroTal is actively
pursuing options to re-commence pipeline exports by the end of 2025.

At the Los Angeles field (Block 131, PetroTal 100% working interest), NSAI
attributed an additional 13 million barrels of OOIP compared to its
pre-acquisition evaluation, based on PetroTal's updated seismic and geological
interpretation. This supported 1.5 million barrels of reserve additions in the
2P category.

Year-End 2024 Net Present Value Discounted at 10% - Before Tax ($ millions)

 CATEGORY                                   YE24    YE23    Change
 Proved
         Developed Producing                $1,174  $748    +57%
         Undeveloped                        $551    $623    -11%
 Total Proved                               $1,725  $1,371  +26%
        Probable                            $925    $1,169  -21%
 Total Proved plus Probable                 $2,651  $2,540  +4%
        Possible                            $1,606  $1,346  +19%
 Total Proved plus Probable & Possible      $4,257  $3,886  +10%

Year-End 2024 Net Present Value Discounted at 10% - After Tax ($ millions)

 CATEGORY                                   YE24    YE23    Change
 Proved
         Developed Producing                $776    $487    +59%
         Undeveloped                        $353    $401    -12%
 Total Proved                               $1,128  $888    +27%
        Probable                            $592    $751    -21%
 Total Proved plus Probable                 $1,720  $1,639  +5%
        Possible                            $1,036  $869    +19%
 Total Proved plus Probable & Possible      $2,756  $2,508  +10%

Five Year Crude Oil Price Forecast - NSAI Report

 Year-End Forecast:                      2025    2026    2027    2028    2029    5 Yr Avg
 Brent (USD$/bbl) - January 1, 2025      $75.58  $78.51  $79.89  $81.82  $83.46  $79.85
 Brent (USD$/bbl) - January 1, 2024      $79.18  $80.36  $81.79  $83.41  $85.09  $81.97

 

The oil price projections used by NSAI are based upon an average of December
31, 2024 and 2023 forecasts of Brent Crude futures prices prepared by three
qualified reserves evaluators: GLJ Petroleum Consultants Ltd., McDaniel &
Associates Consultants Ltd. and Sproule Associates Limited.

 

Net Present Value Summary

The following tables summarize NSAI's estimates of future net revenue
attributable to the reserve categories noted below, both before and after
income taxes. It should not be assumed that the undiscounted or discounted net
present value of future net revenue attributable to reserves estimated by NSAI
represent the fair market value of those reserves.

 CATEGORY                            Future Net Revenue Before Income Taxes ($ millions)
                                     0%           5%           10%          15%          20%
 Proved
        Developed Producing          $1,770       $1,417       $1,174       $1,001       $873
        Undeveloped                  $984         $721         $551         $436         $354
 Total Proved                        $2,753       $2,138       $1,725       $1,436       $1,227
        Probable                     $2,295       $1,427       $925         $620         $426
 Total Proved + Probable             $5,049       $3,565       $2,651       $2,057       $1,653
        Possible                     $6,168       $2,967       $1,606       $959         $618
 Total Proved + Probable + Possible  $11,216      $6,532       $4,257       $3,016       $2,271

 

 CATEGORY                            Future Net Revenue After Income Taxes ($ millions)
                                     0%           5%           10%          15%          20%
 Proved
        Developed Producing          $1,158       $933         $776         $662         $578
        Undeveloped                  $630         $462         $353         $279         $227
 Total Proved                        $1,788       $1,395       $1,128       $941         $805
        Probable                     $1,478       $917         $592         $394         $268
 Total Proved + Probable             $3,267       $2,312       $1,721       $1,335       $1,073
        Possible                     $3,973       $1,915       $1,036       $617         $397
 Total Proved + Probable + Possible  $7,239       $4,227       $2,757       $1,952       $1,469

1)        The estimated tax rate is 32%.

2)        Future net revenue after income taxes includes a 5% workers
profit sharing deduction.

 

3)        These estimates are a simplification of current tax laws and
were not prepared by a tax accountant or attorney.

Year-End 2024 Reserves Value Per Share - PV10 After Tax

 CATEGORY                             YE24                     YE23
                                      US$/sh  CAD$/sh  GBP/sh  US$/sh  CAD$/sh  GBP/sh
 Proved Developed Producing           $0.89   $1.22    £0.68   $0.53   $0.70    £0.42
 Proved                               $1.24   $1.78    £0.99   $0.97   $1.29    £0.76
 Proved plus Probable                 $1.89   $2.71    £1.51   $1.80   $2.39    £1.41
 Proved plus Probable & Possible      $3.02   $4.35    £2.41   $2.75   $3.65    £2.16

The figures above represent the NPV-10 (after tax) of PetroTal's consolidated
reserves, divided by the number of common shares outstanding as of December 31
for the respective year. Canadian and GBP share prices are converted at the
respective year end foreign exchange conversion rates.  Common shares
outstanding at December 31, 2024 were 911.8 million shares and at December 31,
2023 were 912.3 million shares.

Future Development Costs

The following tables summarize future development costs deducted in the
estimation of PetroTal's future net revenue attributable to the reserve
categories noted below. Future development costs are capital expenditures
required in the future for the Company to convert proved undeveloped reserves,
probable reserves and possible reserves to proved developed producing
reserves.

The increase in future development cost estimates is primarily due to the
inclusion of development expenditures for Block 131, and the incorporation of
additional development wells in the Bretana field development plan (8 wells
and 14 wells in the 2P and 3P development case, respectively). Future
development cost estimates also include capitalized erosion control
expenditures.

 Future development costs ($ millions)  YE24  YE23  Change
 Proved                                 $192  $88   +118%
 Proved plus Probable                   $645  $500  +29%
 Proved plus Probable & Possible        $932  $698  +34%

 

 Future development costs ($/bbl)     YE24   YE23   Change
 Proved                               $2.87  $1.84  +56%
 Proved plus Probable                 $5.68  $4.99  +14%
 Proved plus Probable & Possible      $4.37  $3.50  +25%

 

The future development costs are estimates of the future capital expenditures
required to convert the corresponding reserves to PDP reserves.  Future
development costs per bbl are determined using the future development capital
divided by the 1P, 2P, or 3P reserves.

 

Reserve Life Index((1-3))

 

 

 CATEGORY                             YE24        YE23
 Proved Developed Producing           7.0 years   5.5 years
 Proved                               10.3 years  9.2 years
 Proved plus Probable                 17.5 years  19.3 years
 Proved plus Probable & Possible      32.9 years  38.4 years

 

(1)      2024 values based on 2024 year-end reserves divided by average
2024 production of 17,785 bopd.

(2)      The production license for Block 95 expires in 2041.

(3)      2023 values based on 2023 year-end reserves divided by average
2023 production of 14,248 bopd.

 

2024 Year-End Gross Reserves Reconciliation (mmbbls)

 

                      Proved  Proved plus Probable  Proved plus Probable & Possible
 December 31, 2023    48.0    100.2                 199.6
 Infill Drilling      0.0     0.0                   7.5
 Technical Revisions  21.4    14.3                  6.0
 Acquisitions         4.2     5.8                   6.7
 Production           (6.5)   (6.5)                 (6.5)
 December 31, 2024    67.1    113.7                 213.3

 

Updated Investor Presentation

PetroTal has updated its corporate investor presentation to reflect year-end
2024 reserves. Please visit https://petrotalcorp.com/investors/
(https://petrotalcorp.com/investors/) for more information.

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 Bretana 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 Bretana 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

UNAUDITED FINANCIAL INFORMATION: Certain financial and operating results
included in this press release, including production information, total cash,
accounts payable and accounts receivable, are based on unaudited estimated
results. These estimated results are subject to change upon completion of the
Company's audited financial statements for the year ended December 31, 2024,
and changes could be material.

 

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: oil production levels
and production capacity; PetroTal's drilling, completions and other
activities; the ability of the Company to access alternate export routes,
including the Oleoducto Norperuano, and the consistent reliability of those
options; the timing of filing the Annual Information Form. 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", "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 and availability of required equipment and services.
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 achievements 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, 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 September 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 "oil" or "crude oil" production, revenue or
sales in this press release mean "heavy crude oil" as defined in National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI
51-101").

 

SHORT TERM RESULTS: References in this press release to peak rates, initial
production rates, current production rates, 30-day 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 of PetroTal. The Company cautions that
such 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 and production results, cash
position, liquidity 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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