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PetroTal Completes Second Horizontal Well and Achieves New Record Production at Bretaña Oil Field

Newsfile Corp.

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - December 16, 2019) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to provide an update on its operations and production at the Bretaña oil field in Block 95 in Peru (100% working interest). All monetary amounts in this release are in United States dollars.

HIGHLIGHTS

  • Initial three‐day production rate at the BN 95-5H horizontal well ("5H") is 8,250 barrels of oil per day ("BOPD"), exceeding management's expectations.
  • 5H well completed on time and came in approximately 20% ($3.0 million) less than the original $14.5 million budget.
  • Completed the 5H well using new technology to maximize oil production.
  • The Bretaña oil field reached new record production of over 9,000 BOPD, currently with just two (the 5H and the 1XD) of the six wells online.
  • Close to completion of the central production facilities ("CPF-1"), which will increase overall production capacity to 15,000 BOPD.
  • Fourth quarter average production of at least 7,500 BOPD and 2019 exit rate between 11,000 BOPD to 13,000 BOPD reconfirmed.

PetroTal has successfully completed the 5H well, the Company's second horizontal well in the Bretaña oil field. The well reached the target Vivian formation at the prognosed vertical depth of 2,696 meters. The 863-meter horizontal section inside the main productive oil reservoir makes the 5H well the longest horizontal well drilled to date in Peru. Just like in well 4H, the 5H well completion also utilizes autonomous inflow control device ("AICD") valves to maximize oil production. Initial production from the 5H well during the first three days of production was 8,250 BOPD. The 5H well was drilled updip towards the crest of the structure and the results confirmed management's forecast of the reservoir, including high reservoir permeability that is allowing the well to flow at high rates. The well cost was approximately $11.5 million, under budget by approximately $3.0 million (representing a 20% saving), which will expedite payback of the well. The Company will announce additional well data, including sustained rates, with its operations update in January 2020.

PetroTal will commission phase one of the Bretaña central production facilities ("CPF‐1") before year-end 2019, which will increase full field production capacity to approximately 15,000 BOPD. With this additional capacity, PetroTal will be able to bring the other wells back online. Incremental implementation of phase two of the Company's central production facilities ("CPF‐2") is planned for September 2020. When CPF‐2 is fully integrated by year‐end 2020, PetroTal will have the capacity to produce approximately 20,000 BOPD. Facility expansion is being implemented on a modular basis to time facilities with well completions to most efficiently deploy capital.

With this production from the 5H well, the Company expects to meet its 2019 year-end production guidance of between 11,000 - 13,000 BOPD, as stated on November 25, 2019. The drill rig will now undergo annual maintenance for about six weeks, after which, the Company plans to drill a second water disposal well followed by additional oil wells.

Manolo Zuniga, President and Chief Executive Officer, commented:

"PetroTal is pleased with the success of the 5H well and proud to play a historical role by drilling Peru's longest horizontal well to date. I wish to thank the technical and drilling team for their efforts to ensure safe operations and their dedication directed to the 5H well. The strong well performance emphasizes the significant upside of the Bretaña oil field and the considerable growth potential the asset possesses. Our interpretation of the reservoir has been confirmed with this well and the increased production will enhance field economics. The ongoing facility enhancements will enable us to effectively manage the increasing oil field production."

Qualified Person's Statement

Estuardo Alvarez-Calderon, the Company's Vice President, Exploration and Development, who has over 35 years of relevant experience in the oil industry, has approved the technical information contained in this announcement. Mr. Alvarez-Calderon received a Bachelor of Science degree in Geology from the University of Texas at Austin and is registered on the Texas Board of Professional Geoscientists.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL and AIM: PTAL) 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 the Bretaña oil field in Peru's Block 95 where oil production was initiated in June 2018, six months after acquisition. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oil field. More information on the Company can be found at www.PetroTal‐Corp.com.

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

Manolo Zuniga
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101

Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : 44 (0) 208 434 2643

Strand Hanson Limited (Nominated & Financial Adviser)
James Spinney / Ritchie Balmer / Eric Allan
T: 44 (0) 207 409 3494

Numis Securities Limited (Joint Broker)
John Prior / Emily Morris 
T: +44 (0) 207 260 1000

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Nicholas Rhodes / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

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; drilling, completion, commissioning and workover activities of oil producing and water disposal wells and facilities and the results and timing of such activities; the use of AICD valves to optimize well productivity; the ability of the Company to achieve drilling success consistent with management's expectations; anticipated future production and production capacity; exit production in 2019; engaging a partner to drill the Osheki prospect; 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, production capacity, capital budget and capital expenditures, capital efficiencies, payout of wells, cash flow from operations and free cash flow, 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.


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