REG - PetroTal Corp. - 2026 Guidance

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RNS Number : 5124P  PetroTal Corp.  20 January 2026

 

PetroTal Announces 2026 Guidance: Budget Prioritizes Liquidity Preservation,
Cost Discipline, and Operational Optimization

 

 

Calgary, AB and Houston, TX - January 20, 2026 - PetroTal Corp. ("PetroTal" or
the "Company") (TSX: TAL, AIM: PTAL and OTCQX: PTALF) is pleased to provide
the following 2026 guidance update. All amounts are in US dollars unless
stated otherwise.

Key Highlights

 -  Target average 2026 production volumes of 11,750-12,250 barrels of oil per day
    ("bopd");
 -  Capital investment of $80-90 million, allowing for the resumption of
    development drilling at Bretaña by Q4 2026;
 -  Annual Adjusted EBITDA of $30 million at $60.00 Brent, supported by
    significant reductions in operating costs and run-rate G&A expenses;
 -  Similar to prior years, PetroTal has designed its capital program to maintain
    minimum unrestricted cash liquidity of $60 million.

 

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

"We recognize that our operational challenges in 2025, specifically rig
availability and production reliability, have impacted investor confidence.
PetroTal's 2026 budget is a direct response to that feedback. By moving to a
third-party drilling provider and deferring non-essential infrastructure
spend, we are prioritizing liquidity over near-term production growth. While
the decision to suspend our dividend was difficult, this budget confirms it
was necessary to navigate the transition through 2026 without compromising the
long-term value of the Bretaña field. Bretaña continues to offer competitive
economic returns at $60.00 oil prices, provided we make the necessary
improvements to our cost structure. Our investments this year will help set
the stage for PetroTal to restore production output to 20,000 bopd next year."

2026 Guidance Overview

PetroTal's Board of Directors has approved a 2026 capital budget of $80-90
million, of which approximately $18 million is carried over from 2025. Key
components of the capital program include:

 •    $45 million for drilling, rig mobilization, and well facilities, assuming
      completion of two development well at Bretaña by year-end 2026
 •    $16 million for essential operational continuity projects at Bretaña,
      including upgrades to camp habitability and safety
 •    $15 million for capitalized investments in erosion control at Bretaña, with
      an additional $18 million of project expenditures included in opex
 •    $10 million for other projects, including upgrades to Bretaña water handling
      facilities, Ucawa field infrastructure, and exploration activities

These capital investments are expected to support 2026 annual average
production of approximately 12,000 bopd, consistent with the indicative
production forecast PetroTal provided at the time of Q3 2025 financial results
on November 13, 2025. Similar to prior years, PetroTal has designed its
capital program to maintain minimum unrestricted cash liquidity of $60
million, a strategic choice that balances the need to absorb known,
non-recurring expenditures while maintaining flexibility to re-accelerate
activity as production and cash flow visibility improve.

Operating Strategy & Drilling Update

To ensure the execution of the 2026 drilling campaign and mitigate the
scheduling risks encountered in 2025, PetroTal has initiated a tender process
for a third-party drilling contractor. The Company expects to select a
contractor by the end of Q1 2026, targeting a spud date for the first
development well by October 1, 2026. This well is one of two wells planned for
2026 and represents a continuation of the development plan contemplated in
PetroTal's YE2024 certified reserve report, which includes eight remaining
undeveloped 1P locations and eight undeveloped Probable locations. The
strategic shift toward a third-party drilling contractor enhances scheduling
certainty and operational reliability as PetroTal works to resume its
development activities as quickly as possible. While the 2026 budget includes
capital for two Bretaña development wells by year‑end, the broader
eight‑well program will continue into 2027, with the goal of restoring the
field's production to a capacity of more than 20,000 bopd.

Consistent with the move to a third-party contractor, PetroTal has determined
that the Amazonia-1 rig is no longer required for its near-term development
plan. The Company has begun discussions with the rig's leaseholder to
negotiate an orderly exit from the current leasing arrangement. PetroTal's
2026 budget guidance includes conservative provisions for various costs
associated with the termination of the leasing agreement, with major
assumptions supported by independent third-party estimates. Management expects
to provide an update on the financial impact of this transition, including any
necessary settlement costs and the subsequent marketing of the asset, once
definitive agreements are finalized.

In order to facilitate production capacity at a sustainable medium-term
plateau of 20,000 bopd, PetroTal is committed to investing in continued
expansion of water disposal facilities at Bretaña in a profitable manner at a
range of oil price assumptions. To that end, PetroTal's management team and
Board of Directors continue to evaluate plans to increase fluid handling
infrastructure at the Bretaña field over the 2027-28 timeframe. However,
PetroTal has elected to invest in production capacity first, in order to
generate the cash flow necessary to fund the infrastructure expansion.

Production & Sales Guidance

PetroTal's 2026 production guidance of 11,750 to 12,250 bopd is in-line with
the low-case scenario presented with Q3 2025 financial results on November 13,
2025. Assuming the Company successfully sources a third-party drilling rig by
the end of Q1 2026, the expectation is that it will be available to resume
development drilling at Bretaña by October 1, 2026. With that in mind,
production additions from new development drilling in 2026 are unlikely to
have a material impact on 2026 average production guidance. PetroTal has
accounted for a number of contingencies in setting 2026 production guidance,
incorporating scheduled downtime to proactively replace electric submersible
pumps ("ESPs") and production tubing in wells at risk of failing. Given the
high productivity of Bretaña's wells, PetroTal has been placing the ESP's
higher up on the intervened wells so as to reduce power consumption and cost
of future replacements.

2026 sales guidance assumes 100% of Bretaña production is sold through the
Brazil route, as PetroTal fulfills minimum volume requirements under its crude
oil marketing agreements. Los Angeles production will continue to be sold
under short-term contracts to the PetroPeru-operated refinery at Iquitos,
while PetroTal continues to monitor credit exposure.

Financial Discipline & Cost Structure

Adjusted EBITDA guidance of $30 million assumes annual average sales volumes
of 12,000 bopd, and a 2026 annual average Brent oil price of $60.00/Bbl. To
align its cost structure with a transition year profile, PetroTal is
implementing a cost reduction program targeting significant reductions in
opex, run-rate G&A expenses, and capex in 2026. Management is actively
reviewing all financing options to address debt amortization and maintain
minimum unrestricted cash liquidity of approximately $60 million throughout
the year. These are difficult but necessary measures to improve the Company's
cost structure. Similar to 2025, PetroTal's Adjusted EBITDA guidance is net of
$18 million of erosion control expense included in opex. PetroTal has
allocated a total of $33 million to erosion control in 2026, of which $18
million will be expensed and $15 million will be capitalized. There are no
material changes to cost estimates or timelines for the erosion control
project at this time; PetroTal expects to complete the project by Q4 2026, for
a total investment of $65-75 million over the 2024-2026 timeframe.

2026 Guidance Webcast

PetroTal will host a webcast to discuss its 2026 budget and guidance release
on Tuesday, January 20, 2026 at 9am CT (Houston), 3pm GMT (London). Please see
the link below to register.

https://brrmedia.news/PTAL_26Budget (https://brrmedia.news/PTAL_26Budget)

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, the Company's filed documents at www.sedarplus.ca, 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 / Charles Denley-Myerson

petrotal@celicourt.uk

T : +44 (0) 20 7770 6424

 

Strand Hanson Limited (Nominated & Financial Adviser)

Ritchie Balmer / James Spinney / Edward Foulkes

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: oil production levels
and production capacity; PetroTal's development program for drilling,
completions and other activities, including Block 131 and Bretana; plans and
expectations with respect to the erosion control project; and PetroTal's
expectations with respect to dividends and share buybacks. 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, 2024 and the management's discussion and analysis for the
three months ended September 30, 2025 for additional risk factors relating to
PetroTal, which can be accessed either on PetroTal's website at
www.petrotal-corp.com or under the Company's profile on www.sedarplus.ca. 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, 2025 and
2026 drilling program and budget, well investment payback, 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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