Petrotal Corp. · TSX:TAL
Petrotal — Investor Presentation (November 2021)
41 slides from Petrotal's investor presentation, Nov 18, 2021
Slide 1: Investor Presentation
Investor Presentation November 18, 2021 (In USD) Ticker TSXV: TAL AIM: PTAL 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 exchange (Tal and Ptal) TSX-V and AIM Block 192 Basic shares 826 Block 8 Fully diluted shares 931 Iquitos Market capital
Slide 3: PetroTal's history
PetroTal’s history 9,500 – 10,500 bopd 5,675 bopd 4,131 bopd Operational excellence 2022 958 bopd Recalibration and 0 bopd Demonstrated alignment due operational to COVID-19 Infrastructure credibility Source asset preparation and initial and first oil capitalization 2017 2018 2019 2020 2021 • Drille
Slide 4: PetroTal's track record of success
PetroTal’s track record of success Production(1) (bopd) Reserves(2) (mmbbls) ESG leader 120 ▪ Carbon monitoring and reduction 12,500(1) 2P 3P 106 programs 100 9,686 9,508 85 8,839 79 ▪ 11 hectare total field footprint 7,767 COVID-19 and 80 55 social impacts 7,331 6,410 37 ▪ >50 community projects fu
Slide 5: Key strategic initiatives
Key strategic initiatives A focus on generating industry leading free cash flow margins with an option for growth Reserves in mmbbl1 106 Production growth beyond 20,000 bopd 85 79 Possible 55 Possible 37 Clear path to 20,000 bopd through operational excellence 40 2P 48 2P 51 39 Sustainable free cash
Slide 6: 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 ▪ $5b upgrade completed in April 2022 ▪ Materially increasing in country demand for c
Slide 7: ESG leadership
ESG leadership Environmental(1) Social(1) ✓ Carbon monitoring quality certificate obtained with ongoing ✓ Hire local with no expats in Peru reduction plan ✓ Perception assessments from ✓ Approval for “Nature for Nature” Puinahua leaders plan ✓ Delivery of agri/aqua educational ✓ Comprehensive spill
Slide 8: Environmental, social and governance summary
Environmental, social and governance summary Empowering local communities and promoting sustainable development ENVIRONMENTAL SOCIAL GOVERNANCE ▪ Breteña pad – single well pad and no encroachment ▪ Projects to encourage and mentor sustainable ▪ Six full time CSR1 employees, five full time HSE2 on pr
Slide 9: Bretaña Field
Bretana Field @PetroTal *
Slide 10: Large producing and growing reserve base
Large producing and growing reserve base Bretaña (Block 95, 100% WI) - growing production base Reserves and production overview ■ Located in the Marañón Basin of northern Peru 2020 Reserves mmbbl1 Finding and Development ($ millions) Summary Summary 1P – 22 1P – 119 ■ 2020 2P reserves at 51 mmbbl1 (
Slide 11: Well performance
Well performance Historical well performance (1) Key type curve economic indicators(2) PRODUCTION (mbbl) versus NUMBER of DAYS ONLINE SINCE FIRST PRODUCTION Summary Low Mid High PetroTal Hz wells 1,600 1XD HORIZONTAL WELL DRILLED BY EUR mmbbls 2.8 3.1 3.8 4 – 4.5 (extrapolated) PEVIOUS OPERATOR 1,50
Slide 12: 2021 guidance
2021 guidance Development focused with completion of scalable infrastructure Run rate EBITDA heat map4 ■ 2021 production guidance adjusted slightly for revised drilling schedule ■ Executing adjusted plan to drill 3 new horizontals, 1 deviated, and 1 water disposal well in 2021 ■ Revised 2021 EBITDA
Slide 13: Estimated forward drilling schedule
Estimated forward drilling schedule RIG MAINTENANCE BN-4WD BN-13H BN-5WD JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVERMBER DECEMBER JANUARY FEBR. 2022 2023 BN-10H BN-11H BN-12H BN-14H 1) Finalization of schedule and detailed budget to be announced in January 2022 2) Order
Slide 14: 2P reserves based on highly conservative recovery factor vs analogue fields
2P reserves based on highly conservative recovery factor vs 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 pro
Slide 15: Long term development scope and profile
Long term development scope and profile Meaningful production levels for up to 12 years(5) Key highlights3 ■ Low risk path to 20,000 bopd 30,000 2P & 3P Production Profiles o Only $210 million in total CAPEX spent since 2018 20 cuml. wells 3P Wedge contributing to smaller DD&A charges 25,000 ■ Proce
Slide 16: 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 bwpd2 ■ Continued abili
Slide 17: Export routes
Export routes Multiple export routes preserving pricing optionality 2 Export optionality 1. Iquitos Route ▪ Based on Dated Brent (premium to ICE) ▪ Shortest route to market Iquitos Refinery 1,300 bbl/d Brazil route Talara Refinery ▪ $5.0/bbl differential and $8.0/bbl 20,000 bbl/d Iquitos Up to 240k
Slide 18: 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 route Bretaña Field 902 7.5 7.5 Main export route ONP Barges 1323 11.0 18.5 Manaus Statio
Slide 19: Financial Highlights
Financial Highlights @PetroTal *
Slide 20: Financial summary
Financial summary Financial highlights5 +3 new producers P&L and cash flow 2018 2019 2020 Q3 2021 Revised (millions) YTD 2021 Guidance Production Bopd 958 4,131 5,675 8,567 9,500-10,500 Contracted Brent, (gross) USD/bbl $63.8 $64.3 $41.7 $65.7 $71.9 Realized Sales Price USD/bbl $59.1 $56.2 $36.7 $49
Slide 21: PetroTal vs peers
PetroTal vs peers Key Highlights1 ▪ PetroTal currently trades at significant discount to peers on a cash flow basis EV/2022 Cash Flow ▪ At current Brent levels, market capitalization, and under a 2P development plan 4.0 PetroTal could buyback all outstanding shares in 2.5 to 3 years from 2022 on 3.9
Slide 22: Solid cash flow upside
Solid cash flow upside Strong financial position 3P free cash generated over 3 years at Nov 8, 2021 strip 2,3 ▪ 3 year estimated cash build to over $365 million at current strip including full debt service and working capital burdens ($0.44/share) Robust 3 year free cash flow profile (in USD million
Slide 23: Netback and ONP sensitivity analysis
Netback and ONP sensitivity analysis Robust netback by market(2) ONP downtime EBITDA sensitivity (USD millions) Netback Iquitos Brazil Saramuro Total Annualized 0% $220 Summary $/bbl USD millions 5% $215 ONP % downtime in year Production (bopd) 1,300 8,000 5,700 15,000 15,000 10% $210 15% $205 Brent
Slide 24: Investment highlights
Investment highlights Large producing ▪ 100% WI in the Bretaña field in Peru with 2P reserves1 of 51 mmbbl with a before tax 2P NPV(10%) of $830 million oil field with ▪ 15,000 bopd of run rate production generates annual EBITDA of ~$255 million2 at $80/bbl realized Brent robust cash flow ▪ Resilien
Slide 25: Exploration Upside
Exploration Upside @PetroTal 7
Slide 26: 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 27: 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 28: Appendix
Appendix @PetroTal 7
Slide 29: 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 30: 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 31: Hedging Summary
Hedging Summary Two different price risks now mitigated Bayovar Port (8-10 month journey) Production to ONP Bretaña Saramuro *All future production entering the ONP will be hedged by Petroperu Jan 2022 June 2022 Dec 2022 ~0.86 million barrels hedged at $70/bbl put options ~25% hedged(1) ~3.4 million
Slide 32: 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 33: 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 34: 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 35: 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 36: Recent Community and Government Meetings
Recent Community and Government Meetings Local community engagement Community meetings increasing transparency on social profit allocation Ministry of Mines meeting ratifying community commitments 35
Slide 37: 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 38: 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 39: 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 40: 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 41: 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