Petrotal Corp. · TSX:TAL
Petrotal — Investor Presentation (August 2020)
41 slides from Petrotal's investor presentation, August 2020
Slide 1: Oil-Focused, Balanced Portfolio Pure Play
Investor Presentation December 2019 Oil-Focused, Balanced Portfolio Pure Play Delivering both steady production growth and high impact exploration August 2020 0
Slide 2: Corporate Profile
Corporate Profile ECUADOR COLOMBIA Block 192 Block 8 Market in USD unless stated Iquitos TSX-V Toronto / AIM London TAL / PTAL Talara Saramuro Block 95 Basic Shares 814.5 MM Fully Diluted Shares 921.6 MM Bayovar El Milagro Yurimaguas Bretaña Field $123.4 MM USD Market Cap (basic in USD) 1 (0.20/shar
Slide 3: PetroTal Strategy
PetroTal Strategy A scalable E&P leader in Peru that generates superior returns for stakeholders Production Growth To 20,000 bopd Consistent execution to date and clear path to 20,000 bopd in the future Continued Efficient Reserves Growth Achieved through drilling, superior well performance, and poo
Slide 4: PetroTal Investor Highlights
PetroTal Investor Highlights Strong ▪ 23% increase in 2019 year end 2P reserves to 48 MM bbl Operational ▪ Phased development to 20,000 bopd via pad drilling ▪ First 6 wells drilled with consistent and expected performance Growth ▪ Royalty rates ranging between 5-8% for near term production goals At
Slide 5: History and Key Milestones
History and Key Milestones 2020 flat production exit 2019 13,300 bopd exit 2018 5,500 bopd exit 2017 Inception 1H 2019 2H 2019 2017 Achieved ~5,500 bopd Exit 2019 production of 13,300 bopd (33% ahead of plan) Drilled three additional wells 2H 2020 Dec 2017 inception, brought online by end of 2H Wate
Slide 6: COVID-19 Surveillance and Control Plan
COVID-19 Surveillance and Control Plan ■ Rapid Testing Pre and Post Camp Entrance o Multiple COVID-19 tests required one week and one day prior to entering camp o 146 workers were tested every 5 days o Numerous body temperature readings per day o Data registered with health authorities o 18,000 COVI
Slide 7: ESG
ESG Empowering local communities and promoting sustainable development for unlocking the value of our assets ENVIRONMENTAL SOCIAL GOVERNANCE ▪ Breteña pad (11 hectares) – single ▪ Projects to encourage and mentor ▪ 9 full time CSR employees, 4 full well pad and no encroachment on sustainable local d
Slide 8: Transparency and Responsibility = Empowerment
Transparency and Responsibility = Empowerment ■ 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 CANON(1), which is the share of government-take committed to the Loreto Region Workers ar
Slide 9: Empowering the Communities
Empowering the Communities ■ Sustainable Local Economic Development ➔ This is key for the communities not to depend on oil industry o Construction of the Bretaña community dock that was promised by the previous operator. The Before the new dock: Unloading with municipality is responsible for chargin
Slide 10: Bretaña Field
Investor Presentation December 2019 Bretaña Oil-Focused, Field Balanced Portfolio Pure Play Delivering both steady production growth and high impact exploration 9
Slide 11: Bretaña Field
Bretaña Field Oil field with robust technical merits, high netbacks and significant upside potential Year End 2019 Reserve Report Production Profiles Key Highlights 35,000 1P 2P 3P Asset Overview 30,000 25,000 ■ 100% owned Bretaña Field, located in Block 95, in the Marañón Basin, north east Peru Oil
Slide 12: Bretaña Recovery Factor Comps
Bretaña Recovery Factor Comps Oil – 20 API Oil – 13 API OOIP – 331 #2 Shiviyacu OOIP – 209 EUR = 121 (37% RF) EUR = 46 (22% RF) #3 Carmen #5 San Jacinto Oil – 20 API Oil – 11 API OOIP – 45 OOIP – 414 EUR = 14 (32% RF) #1 Capahuari N. #6 Jibaro/Jibarito EUR = 103 (25% RF) Oil – 35 API OOIP – 48 River
Slide 13: Technical Justification For Higher Recovery Factors
Technical Justification For Higher Recovery Factors 1P: 235 MM bbl2 2P: 364 MM bbl2 3P: 579 MM bbl2 Key Highlights ■ Analog fields in region1 with similar reservoir characteristics have achieved >20% recovery factors ■ In general, the new wells came in with reservoir thickness and quality at or in e
Slide 14: Historical Well Performance
Historical Well Performance Cumulative Oil vs Days on production Cumulative Oil vs Cumulative Water 750 750 700 700 1XD HORIZONTAL WELL DRILLED by GTE 1XD HORIZONTAL WELL DRILLED by GTE 650 650 VERTICAL or DEVIATED WELLS 600 VERTICAL or DEVIATED WELLS 600 550 550 HORIZONTAL WELLS HORIZONTAL WELLS 50
Slide 15: Horizontal Type Curve Performance and Economics
Horizontal Type Curve Performance and Economics 6,000 54 Key Parameters in USD 5,000 $60 Brent 45 CAPEX ~$12 MM USD/well Brent (Flat) $/bbl $40/bbl and $50/bbl Realized Price ~90-92% of Brent ICE (~$4/bbl diff) 4,000 36 Cumulative NPV(10) MM Royalties ~6% Oil Rate (bopd) Lifting and Transportation 1
Slide 16: Bretaña Field: Geology
Bretaña Field: Geology Simple and well understood geology allows for clear development plan and production uplift Key Highlights Field Structure & Seismic Line (P1 + P2 Locations) ■ Simple 4 way closure anticline – 15 km long and 10,000 acres o Field structure and reservoir continuity delineated by
Slide 17: Bretaña Wells Demonstrate Cross-Field Consistency
Bretaña Wells Demonstrate Cross-Field Consistency NW BN-3D BN-2XD BN-1 BN-1XD B SUR-1X SE 400 m 717 m 785 m 6437 m OWC -2609 m Cross Section Shows Continuity of Vivian Formation and Excellent Oil Sands in 1WD Well 16
Slide 18: Bretaña Field: Infrastructure in Place
Bretaña Field: Infrastructure in Place Clear path to production increases through proved development plan from well understood reservoirs Key Highlights Oil Water Total Capacity Status ■ Discovered in 1974 – $311 MM USD previously invested by prior bopd bwpd operator, with tax pools of $305 MM USD L
Slide 19: Reserves Trending
Reserves Trending Finding and Development (MM USD) NPV(10) 2P (MM USD) 2P Reserves (Gross MM bbl) 325 1,100 48 251 40 39 194 535 282 2017 2018 2019 2017 2018 2019 2017 2018 2019 23% decrease 105% increase 23% increase CAPX Funding Contribution (Jan 2018 - June 2020) Key Highlights Q2 2020 Cash ▪ 23%
Slide 20: Historical Results
Historical Results 1H 2020 Brent 2018 and 2019 Brent Ave ~ $64/bbl ~40/bbl Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 27,851 26,273 Oil Production (bopd) COVID 19 shut in 9,686 FFO vs
Slide 21: Strategic Capital Allocation
Strategic Capital Allocation In MM USD 89 Drilling 2 Key Highlights 145 MM USD to date ▪ Half cycle capital allocation until 16,000 – 18,000 bopd is Facilities 50% on Drilling reached 32 50% Facilities and Other ▪ Phase 2 processing expansion at company directed pace Other ▪ Spending metrics that co
Slide 22: Netback Sensitivity Map (Price vs Production)
Netback Sensitivity Map (Price vs Production) Netback Detail (/bbl) 12,000 bopd 12,000 bopd Operating Netback $/bbl 12,000 14,000 16,000 Brent (USD/bbl) $30.0 50.0 Average Production Range bopd Differential 4 (4.0) (4.0) Realized Price USD/bbl $26.0 $46.0 $30 7.0 7.7 8.2 Royalty 2 (1.5) (2.8) Net Pr
Slide 23: Management and Board
Management and Board Management Team ■ Manuel Pablo Zuniga-Pflucker – President and CEO Manolo Zúñiga, as he is known, is a petroleum engineer with 35 years of industry experience. Mr. Zúñiga was a co-founder and the President and CEO of PetroTal LLC, leading the company to become publicly traded at
Slide 24: Exploration Upside
Investor Presentation December 2019 Exploration Upside Oil-Focused, Balanced Portfolio Pure Play Delivering both steady production growth and high impact exploration 23
Slide 25: Block 95 Prospects & Leads
Block 95 Prospects & Leads Key Highlights Bretaña Field ▪ Four wells drilled within the block (mid 70’s) Bretaña 1X Bretaña Norte Wells Envidia Prospect ▪ Wells drilled with very limited seismic data Bretaña Sur 1X ▪ Most leads on trend with Bretaña Field Envidia 4X Zapote Lead ▪ Structures are very
Slide 26: Block 107 – Exploration Opportunity
Block 107 – Exploration Opportunity Multiple High-Impact Prospects and Leads Key Highlights ■ 100% owned and operated, located in the Ucayali basin ■ Osheki prospect has a mean unrisked prospective resources estimate of 5341 mmbbl ■ Constitución prospect has a mean unrisked prospective resource esti
Slide 27: Block 107 – Prospective Resources MMbbl (NSAI 2020)
Block 107 – Prospective Resources MMbbl (NSAI 2020) Bajo Pozuzo Lead San Juan Lead Constitución Sur Oxapampa 17-C1 Prospect Osheki Prospect Oxapampa 19-2 Lead A Oxapampa 19-1 Prospects in MMbbl1 Best Mean Osheki 278.4 534.2 Legend Constitucion Sur 31.6 68.5 Seismic Line Oxapampa 7-1 Leads in MMbbl1
Slide 28: Constitución Prospect – Exploration Opportunity
Constitución Prospect – Exploration Opportunity Perfect Step Towards Drilling the Osheki Prospect Key Highlights ■ Constitución prospect has 32 mmbbl of best1 unrisked BLOCK 200 Road to Lima Pucallpa prospective resources ■ Constitución is adjacent to a new road, could be considered an initial targe
Slide 29: Summary
Investor Presentation December 2019 SummaryOil-Focused, Balanced Portfolio Pure Play Delivering both steady production growth and high impact exploration 28
Slide 30: Investment Summary and Considerations
Investment Summary and Considerations A scalable E&P leader in Peru that generates superior returns for stakeholders Proven Operational Execution 0 to >13,000 bopd in < 2 years Material Reserves Upside Large recovery factor upside vs similar fields, backed by a proven management team Exploration Ups
Slide 31: Appendix
Investor Presentation December 2019 AppendixOil-Focused, Balanced Portfolio Pure Play Delivering both steady production growth and high impact exploration 30
Slide 32: Trading History
Trading History 35 0.6 AIM Daily Closing Price (in GBP) TSX-V Daily Closing Price (in CAD) 30 0.5 AIM TSX-V 25 0.4 20 0.3 15 0.2 10 5 0.1 0 0 7,000 4,500 TSX-V 15 day Rolling Average Daily Thousands Thousands AIM 15 day Rolling Average Daily 4,000 6,000 AIM TSX-V 3,500 5,000 3,000 4,000 2,500 Volume
Slide 33: Bretaña Field: Export Routes
Bretaña Field: Export Routes Multiple export routes, diversifying evacuation risk and preserving pricing optionality Key Highlights 1 Alternative Export Routes ■ First 1,200 bopd sold to Petroperu’s 10,000 bopd Iquitos refinery o Shortest route to market and potential for expansion with improved qua
Slide 34: Peru – Stable, Pro-Business and Tax-Friendly
Peru – Stable, Pro-Business and Tax-Friendly Stable and Pro-Business in a Growth Economy Talara Refinery: Key Market for Bretaña Oil ▪ Peru is one of the fastest growing economies in Latin America. Since 2000, it achieved an impressive accumulated growth rate of 147.3% GDP1 ▪ Democratic, investment
Slide 35: Scalable Cost Structure
Scalable Cost Structure Fixed Costs/Month Variable Costs Volume Break Even (7 wells) MM USD ($/bbl) ~5,000 bopd break even $1.15 $4.0/bbl Net with Revenue volume at $40 Brent Fixed Lifting Costs Differential $4.0-$6.0/bbl Transportation Barging and Diluent $0.42 $8.0-$9.0/bbl Fixed Well Costs Tariff
Slide 36: Derivative Obligation and Risk Mitigation
Derivative Obligation and Risk Mitigation Delivery Settlement Production Delivered (bbl) Invoiced (USD/bbl) Strip (USD/bbl 2 Liability/(Asset) (USD MM) Aug-19 July-20 1 200,001 59.7 42.9 3.3 Oct-19 July-20 1 207,922 64.4 42.9 4.5 Dec-19 July-20 1 172,009 68.2 42.9 4.4 Dec-19 Sept-20 294,372 64.3 45.
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 Reserves Disclosure. The reserve estimates contained herein were derived from a reserves assessment and evaluation prepared by Netherland Sewell & Associates, Inc. (“NSAI”), a qualified independent reserves evaluator, with an effective date of December
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: PetroTal
(6 PetroTal