Petrotal Corp. · TSX:TAL
Petrotal — Investor Presentation (March 2021)
39 slides from Petrotal's investor presentation, March 2021
Slide 1: Investor Presentation March 2021
Investor Presentation March 2021 (In USD) Ticker TSXV: TAL AIM: PTAL 0
Slide 2: Investment highlights
Investment highlights ▪ 100% WI in the Bretaña field in Peru with 2P reserves1 of 51 mmbbl with a before tax 2P NPV(10%) of $830 million Large producing ▪ 11,500 bopd of run rate production generates annual EBITDA of ~$141 million2 at Brent $65/bbl oil field with robust cash flow ▪ Resilient to oil
Slide 3: PetroTal – Firmly established as a significant Peruvian oil producer
PetroTal – Firmly established as a significant Peruvian oil producer PetroTal in brief Asset and refinery locations ■ Pure-play onshore Peru focused E&P independent ECUADOR COLOMBIA Block 192 o Incorporated in Canada (Alberta), with offices in Houston and Calgary Block 8 o Listed on the TSX-V and AI
Slide 4: History and outlook
History and outlook 2017 H1 2019 H2 2019 2021 Budget Exit 2019 production of 13,300 bopd Drill five additional wells and one December 2017 inception, Achieved ~5,500 bopd (33% ahead of plan) water disposal well capitalization and strategic asset acquisition of Gran Drilled three additional wells $10
Slide 5: Strategy dedicated to low cost production growth from proven reserve base
Strategy dedicated to low cost production growth from proven reserve base Strategy and key principles Reserves in mmbbl1 106 Production growth to 20,000 bopd 85 79 Possible 55 Possible 37 Clear path to 20,000 bopd through operational excellence 39 2P 48 2P 51 39 Continued efficient reserves growth a
Slide 6: Environmental, social and governance
Environmental, social and governance Empowering local communities and promoting sustainable development ENVIRONMENTAL SOCIAL GOVERNANCE ▪ Breteña pad – single well pad and no encroachment ▪ Projects to encourage and mentor sustainable ▪ Six full time CSR1 employees, five full time HSE2 on primary ra
Slide 7: Peru – country and fiscal overview
Peru – country and fiscal overview Peru offers a stable, low risk investment environment Peru’s GDP growth rate3 ■ Peru has averaged 4.7%/yr in GPD growth since 1998 8.3% ■ Investment grade stable/positive outlook: A3 (Moody’s)/BBB+ (S&P and Fitch) ■ Second lowest country risk in LatAm with a rating
Slide 8: Bretana Field
Bretana Field @PetroTal ”
Slide 9: Large producing and growing reserve base
Large producing and growing reserve base Bretaña (Block 95, 100% WI) - growing production base Reserves and production overview ■ Located in the Marañón Basin of northern Peru 2020 Reserves mmbbl1 Finding and Development (millions) Summary Summary 1P – 22 1P – 119 ■ 2020 2P reserves at 51 mmbbl1 (7%
Slide 10: 2021 approved budget
2021 approved budget Development focused with completion of scalable infrastructure 2021 budget summary and EBITDA heat map ■ Planning to drill 4 new horizontals, 1 deviated, and 1 water disposal 18,000 Oil Production well in 2021 16,000 Actuals ■ 4 new wells expected on production in 2021 (11 total
Slide 11: Strong production growth since inception
Strong production growth since inception Bretaña production and wells to date1, 2 - strong production and FFO growth Estimated CAPEX funding sources 4H 5H 12,000 Production History 16/10/19 07/12/19 ■ Estimated $154 million capex spent from inception until Q4 2020 to reach a peak production of 13,30
Slide 12: 2P reserves based on highly conservative recovery factor vs analogue fields
2P reserves based on highly conservative recovery factor vs analogue fields Block 95 technical characteristics and analogue field recovery factors ■ 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 13: Long Term development scope and schedule
Long Term development scope and schedule Meaningful production levels for up to 12 years Key highlights ■ Low risk path to 20,000 bopd 30,000 2P & 3P Production Profiles o $154 million in CAPEX spent through 2020 with an 20 cuml. wells 3P Wedge additional estimated $152 million through 2023 in 25,00
Slide 14: Extensive infrastructure in place to facilitate production increases
Extensive infrastructure in place to facilitate production increases Existing facilities allow increased production ■ PetroTal investment of approximately ~$94 million achieves processing capacity Incremental Oil Incremental Water Capacity Stage Complete of ~24,000 bopd1 bopd bwpd3 ■ Continued abili
Slide 15: Export routes
Export routes Multiple export routes preserving pricing optionality Export optionality Current export routes ■ First 1,300 bopd sold to Petroperu’s 10,000 bopd Iquitos refinery o Shortest route to market and potential for increase sales by improving our residual viscosity through blending or chemica
Slide 16: Alternative offtake option – up to 240k bbl export shipments via Brazil
Alternative offtake option – up to 240k bbl export shipments via Brazil Offtake option via Itacoatiara Brazil ▪ Oil sold FOB Bretaña and transported with barges to Brazilian ports along Amazonas, Bretaña Field reducing dependency on Peruvian infrastructure ▪ 50k bbl storage capacity at Bretaña, incr
Slide 17: Significant storage capacity and multiple offtake options mitigate ONP risk
Significant storage capacity and multiple offtake options mitigate ONP risk ~700k bbls storage capacity1-3 Multi-option offtake Storage # of days Cuml. # of days Access to: k bbl @ 12k bopd @ 12k bopd Brazilian optional route Bretaña Field 902 7.5 7.5 Main export route ONP Barges 1323 11.0 18.5 Mana
Slide 18: Financial Highlights
Financial Highlights @PetroTal ”
Slide 19: Financial summary
Financial summary Historical financial summary Financial highlights Units 2018 2019 Q1-3 2020 ▪ Since first oil in June 2018, production has grown to 13,300 bopd (exit rate 2019) Production (gross) bopd 958 4,131 5,438 Bbls sold bbls 177,465 1,472,042 1,582,858 ▪ 2020 YE cash of $10 million Revenue
Slide 20: Bretaña offers strong netbacks
Bretaña offers strong netbacks Netbacks and netback sensitivity with three offtake options 5 Netback highlights ▪ Break even oil price (Brent) of $24/bbl pre G&A Bretaña illustrative netbacks with Brent at $50/bbl Bretaña netback sensitivity ($27/bbl post G&A) Netback Detail Iquitos Saramuro Netback
Slide 21: Strong 2P free cash flow generation
Strong 2P free cash flow generation Free cash flow profile pre debt service 1 Financial projection highlights 300 ▪ Significant free cash flow at current strip Brent prices 300.0 CAPEX OPEX with material downside buffer should oil prices soften 250 G&A 250.0 from current levels Royalties Revenue at
Slide 22: Solid cash flow upside
Solid cash flow upside Strong financial position Material free cash generated at $50/bbl 2,3 ▪ Bond refinancing has repaid the Petroperu facility and will finance further Estimated cash contributions and uses until 2023 development of the producing Bretaña field 450 o Will provide funds to develop B
Slide 23: Corporate highlights
Corporate highlights ▪ First oil in H1 2018 reached five months ahead of time and significantly below budget Proven ability to execute ▪ Increased Bretaña production from 1,000 bopd to 13,300 bopd in 18 months from mid-2018 ▪ Drilled six wells on budget and on time, consistently with better than exp
Slide 24: Exploration Upside
Exploration Upside @PetroTal 7
Slide 25: 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 totaling ■ Leads are very similar to Bretaña and other producing fields in the basin which Bretaña Field Block Area: follow the same geologica
Slide 26: Block 107 – significant exploration opportunity
Block 107 – significant exploration opportunity Block 107 Constitución prospect ■ 100% owned and operated block with >252 million hectares, located in ■ Due to location adjacent to a new road, drilling cost is estimated to $20 million, well the Ucayali basin below the $40 million estimated for the l
Slide 27: Appendix
Appendix @PetroTal 7
Slide 28: 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 29: 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 30: Hedging considerations and strategy
Hedging considerations and strategy Overview ■ PetroTal plans to implement a hedge program for the next 12 months with a focus on i) protecting the $100 million capital program for 2021 and ii) ensure compliance with covenants should Brent drop materially below $45/bbl ■ Next 12 months hedging plan
Slide 31: Government long-term solution to Covid-19 and related social unrest issues
Government long-term solution to Covid-19 and related social unrest issues Export pipeline and production shut-in Government long-term solution to related social unrest issues ■ Export pipeline shut-in from early May 2020 due to Covid-19 measures ■ During the past five months the Government made fiv
Slide 32: COVID-19 surveillance and control plan
COVID-19 surveillance and control plan Key highlights Proactive approaches to COVID 19 mitigation ■ Rapid Testing Pre and Post Camp Entrance On-site clinic o Multiple COVID-19 tests required one week and one day prior to entering camp o 146 workers are continuously tested every five days o Numerous
Slide 33: 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 o H
Slide 34: 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 35: 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 36: 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”). Reserves Disclosure. The reserve estimates
Slide 37: 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 38: 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 39: Ltd. Manolo Zuniga Douglas Urch
Ltd. Manolo Zuniga Douglas Urch (713) 609-9101 (713) 609-9026 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