Petrotal Corp. · TSX:TAL
Petrotal — Investor Presentation (February 2022)
43 slides from Petrotal's investor presentation, Feb 22, 2022
Slide 1: Investor Presentation
Investor Presentation February 22, 2022 (In USD) Ticker TSXV: TAL AIM: PTAL OTCQX: PTALF 0
Slide 2: PetroTal is a significant Peruvian oil producer
PetroTal is a significant Peruvian oil producer PetroTal corporate and technical summary Asset and refinery locations Corporate (in millions) and USD ECUADOR COLOMBIA Public share exchanges (Tal, Ptal, PTALF) TSX-V, AIM, OTCQX Block 192 Basic shares 833 Block 8 Fully diluted shares 931 Iquitos Marke
Slide 3: PetroTal's history
PetroTal’s history 17,500 – 19,500 bopd 8,956 bopd Free cash flow generation 5,675 bopd with dividends 2023 4,131 bopd Operational and or share excellence buybacks Recalibration (20,000 bopd 0 to 958 bopd1 and achieved) Demonstrated alignment due operational to COVID-19 Source asset credibility and
Slide 4: Guiding initiatives
Guiding initiatives Unique value proposition of providing investors with material organic growth and yield CAGR = 3 YR compounded annual growth rate 23% Reserves in mmbbl1 147 CAGR Production growth to 25,000 bopd 2P Possible 106 20% 85 69 CAGR Clear path to 25,000 bopd and beyond through operationa
Slide 5: PetroTal's track record of success
PetroTal’s track record of success Production (bopd) Reserves(1) (mmbbls) ESG leader 147 Carbon monitoring and reduction 2P Possible programs 5 straight quarters of growth 10,147 9,686 9,508 106.1 11 hectare total field footprint 8,839 69.1 7,767 7,331 84.8 >50 community projects funded COVID-
Slide 6: Estimated 2022 forward drilling schedule
Estimated 2022 forward drilling schedule RIG MAINTENANCE/MOVE BN-12H BN-14H Start date: Early Feb Spud date: Mid May Spud date: Late Sept (one month) RIG MAINTENANCE Start date: Early Dec January February March April May June July August September October November December Structure map with locatio
Slide 7: 2022 guidance
2022 guidance Paced PUD development to achieve optimal free cash flow profile 2022 run rate EBITDA matrix1 Production guidance (13% total downtime) (bopd) 15 producing wells (USD millions) Estimated run rate production (bopd) 14 producing wells 21,000 Derivative 20,500 16,500 17,500 18,500 19,500 20
Slide 8: 2022 shareholder return strategy
2022 shareholder return strategy PetroTal established a dividend policy in 2019 In December 2019, dividends of $0.0017 CAD/share were declared Paid in January 2020 ($1.14 million CAD) Dividend program suspended in March 2020 due to the collapse in world oil prices The existing bonds preven
Slide 9: Peru country and fiscal overview
Peru country and fiscal overview Talara Refinery BBB/BBB+/Baa1 stable outlook (Fitch/S&P/Moody’s) $4 billion in new notes issued late in 2020 Country risk rating (EMBIG) of 143, the lowest in all Latin America1 $5 billion upgrade completed in April 2022 Materially increasing in country deman
Slide 10: ESG leadership
ESG leadership Environmental(1) Social(1) Carbon monitoring quality certificate obtained with ongoing Hire local with no expats in Peru reduction plan Perception assessments from Approval for “Nature for Nature” Puinahua leaders plan Delivery of agri/aqua educational Comprehensive spill
Slide 11: Environmental, social and governance summary
Environmental, social and governance summary Promoting sustainable development for the benefit of all and without any discrimination ENVIRONMENTAL SOCIAL GOVERNANCE Breteña pad – single well pad and no encroachment Projects to encourage and mentor sustainable Six full time CSR1 employees, five
Slide 12: Bretaña Field
Bretana Field @PetroTal *
Slide 13: Large producing and growing reserve base
Large producing and growing reserve base Bretaña (Block 95, 100% WI) - growing production base Reserves and production overview1,2 ■ Located in the Marañón Basin of northern Peru 2021 Reserves mmbbl1 Finding and Development ($ millions) Summary Summary 1P – 37 1P – 141 2P – 78 2P – 289 ■ 2021 2P res
Slide 14: Well performance
Well performance Historical well performance (1) Key type curve economic indicators(2, A-F) Low Mid High PetroTal Hz wells Production vs Time Technical parameters 2,000 1.7 million bbls in 750 days EUR mmbbls 2.8 3.1 3.8 4 – 4.5 (extrapolated) 1,800 Recovery Factor 12% 16% 20% 21%-26% 1,600 Capex/we
Slide 15: Recovery factors now in line with analogue fields
Recovery factors now in line with analogue fields Bretaña field performance consistently shows higher recovery factors as shown in analogue fields ■ Well defined four-way structure bounded by a reverse fault to the east – a geologic trap system that is very prolific and productive in both Peru and E
Slide 16: Long term development scope and profile
Long term development scope and profile Meaningful production levels for up to 15 years(5) Key highlights3 ■ Low risk path to 25,000 bopd 40,000 o $245 million in total CAPEX spent since 2018 35,000 29 cuml. wells 3P Forecast contributing to reasonable DD&A charges ($7/bbl) 10 years > 10,000 bopd (2
Slide 17: Extensive infrastructure in place to facilitate production increases
Extensive infrastructure in place to facilitate production increases Existing facilities allow increased production ■ PetroTal investment of >$100 million achieves processing capacity of ~24,000 Incremental Oil Incremental Water Capacity Stage Complete bopd1 bopd bwpd2 ■ Full field Environmental Imp
Slide 18: Export routes and priority of sales
Export routes Multiple export routes preserving pricing optionality1 Export optionality 25,000 bopd Iquitos Refinery 1,300 bopd Brazil route Talara Refinery Iquitos Up to 240k bbl per month 20,000 bopd 1. Iquitos Route Refurb until end-2021 (new capacity at 95,000 bopd) Based on spot Dated Brent (
Slide 19: Significant storage capacity and multiple offtake options mitigate ONP risk
Significant storage capacity and multiple offtake options mitigate ONP risk ~1.2 million bbls storage capacity1-3 Multi-option offtake Storage # of days Cuml. # of days Access to: k bbl @ 12k bopd @ 12k bopd Brazilian route Bretaña Field 90 7.5 7.5 ONP export route ONP Barges 360 30.0 37.5 Manaus St
Slide 20: Financial Highlights
Financial Highlights @PetroTal *°
Slide 21: Financial summary
Financial summary Balance sheet strength (USD millions)1-3 2022 free cash flow allocation menu (USD millions) Key financial figures 2018 2019 2020 Q3 2021 2022 (estimated) $230 million FCF5 Cash 26.3 21.1 9.1 57.7 70.0 - 80.0 Amount for dividends and or share buy backs AR 8.6 20.9 12.0 25.9 20.0 if
Slide 22: Netback and ONP sensitivity analysis
Netback and ONP sensitivity analysis Robust netback by market(2) ONP downtime EBITDA sensitivity4 (USD millions) Netback Iquitos Brazil Saramuro 2022 2022 2021 2021 2022 Budget Summary $/bbl $/bbl $/bbl $/bbl Annualized 9 months YTD 9 months YTD USD millions $/bbl USD millions ONP Downtime % in year
Slide 23: Solid cash flow upside
Solid cash flow upside Strong financial position enables return of capital policy by Q4 2022 Internal free cash generated over 4 years at Feb 7, 2022 strip(1-6) 4 year estimated cash build to $600 million at current strip including full debt service, Free cash flow (USD millions) taxes and working
Slide 24: Return of capital timeline
Return of capital timeline Requires $88/bbl Brent in 2022 Key highlights $112.5 Jan 2022 Contractually, bonds must be paid off prior to a $89.31 Feb 2022 $30 1 return of capital policy $88.8 Mar 2022 $18 The optimal time to retire the bonds in 2022 is in Q3 from a call premium minimization stand
Slide 25: PetroTal vs peers
PetroTal vs peers Key Highlights1 UK/African Peers 6.0x PetroTal currently trades at significant discount to peers on a cash flow basis 5.0x EV/2022 Cash Flow At current Brent levels, market capitalization, and under a 20 well internal management 4.0x development plan, PetroTal could buyback all
Slide 26: Investment highlights
Investment highlights Large producing 100% WI in the Bretaña field in Peru with 2P reserves1 of 78 mmbbl with a before tax 2P NPV(10%) of $1.39 billion oil field with 2022 guidance 18,250 bopd of run rate production generates annual EBITDA of ~$350 million2 robust cash flow Resilient to oil pr
Slide 27: Exploration Upside
Exploration Upside @PetroTal *
Slide 28: Block 95 – further growth opportunities
Block 95 – further growth opportunities Key highlights Prospects and leads diagram ■ Several prospects and leads identified, most on trend with Bretaña Field. NW-SE Structural trend positioned to receive hydrocarbon charge from the west, spill migration from the Time Structural Map Near Top Vivian B
Slide 29: Block 107 – significant exploration opportunity
Block 107 – significant exploration opportunity ■ 100% owned and operated block with > 252,000 hectares (> 622,000 acres), located in the Ucayali basin ■ Significant exploration potential identified in a sub-thrust play similar to the Cusiana complex (Llanos Foothills of Colombia) ■ 3D geologic mode
Slide 30: Appendix
Appendix @PetroTal *
Slide 31: Senior management
Senior management Experienced and seasoned management team Manolo Zúñiga – Director, President & Chief Executive Officer • Native Peruvian with >30 years of experience in petroleum engineering • Started career with Occidental Petroleum Corp (“Occidental”) in Bakersfield & Block 192 in Peru • Founder
Slide 32: Board of directors
Board of directors Highly experienced governance1 Mark McComiskey – (Non-Executive Director and Chairman) • Founding Partner of Vanwall Capital and Managing Partner of Prostar Capital • Former Principal of Clayton, Dubilier & Rice, Inc. and an associate at the law firm of Debevoise & Plimpton, LLP G
Slide 33: Share ownership and volume
Share ownership and volume Tal and Ptal daily average trading volume by month (millions) PetroTal ~one year trailing share price 45 TSXV cuml. Jan 21 – Feb 22 trading volume – 194 million shares 9.3 GTE exit3 PetroTal AIM cuml. Jan 21 – Feb 22 trading volume – 575 million shares (438 normalized for
Slide 34: Derivative summary and hedging strategy
Derivative summary and hedging strategy Derivative summary as at Feb 7, 2021 Hedging strategy4 Estimated Brent at Net revenue ■ Manage a general corporate hedging policy where ONP inventory Estimated settlement date Price received approximately 30% of forward one year production is hedged settlement
Slide 35: Oil Sales Commercialization Agreements with Petroperu
Oil Sales Commercialization Agreements with Petroperu Petroperu sales contract illustration (example) PetroTal has received 31 million in true up revenue YTD ‘21 (Pump station #1) Oil sold into ONP Oil sold out of ONP Derivative Asset (Liability) (Bayovar) Start End USD millions + 200k ONP (pipeline
Slide 36: Long-term solution to Covid-19 and related social unrest issues
Long-term solution to Covid-19 and related social unrest issues PetroTal proposed social profit sharing value (2.5% community trust) Government long-term solution to related social unrest issues1 ■ During the past five months the Government made five important announcements Summary in USD Average re
Slide 37: Empowering the communities
Empowering the communities Key highlights Empowering the community ■ Sustainable local economic development: key for the communities not to depend on oil industry o Construction of the Bretaña community dock that was promised by the previous operator o Development of sustainable fishing projects ins
Slide 38: Transparency, responsibility and empowerment
Transparency, responsibility and empowerment Key highlights Empowering the community ■ Sharing Information to build trust and responsibility to become fully empowered o Training of the Bretaña Municipality to properly manage the cash provided by the CANON1 o Training 21 local leaders to be able to p
Slide 39: Disclaimers
DISCLAIMERS Forward-Looking Information Certain information included in this presentation constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”,
Slide 40: Disclaimers (continued)
DISCLAIMERS (CONTINUED) Oil and Gas Advisories Crude Oil. All references to “oil” or “crude oil” production, revenue or sales mean “heavy crude oil” as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Brent refers to Intercontinental Exchange
Slide 41: Disclaimers (continued)
DISCLAIMERS (CONTINUED) Analogous Information. Certain information in this document may constitute "analogous information" as defined in NI 51-101, including, but not limited to, information relating to areas, wells and/or operations that are in geographical proximity to or on-trend with lands held
Slide 42: Disclaimers (continued)
DISCLAIMERS (CONTINUED) Non-GAAP Financial Measures, Oil and Gas Metrics and Other Key Performance Indicators This presentation contains certain financial measures, as described below, which do not have standardized meanings prescribed by generally accepted accounting principles (“GAAP”). In additio
Slide 43: Contact
Ltd. Manolo Zuniga Douglas Urch (713) 609-9101 (713) 609-9101 mzuniga@petrotal-corp.com durch@petrotal-corp.com PetroTal Suite 500 11451 Katy Freeway Houston, TX 77079 Legal Counsel (Canada): Stikeman Elliott LLP Independent Reservoir Engineering Firm: Netherland Sewell & Associates, Inc. Audit Firm