Petrotal Corp. · TSX:TAL
Petrotal — Investor Presentation (April 2022)
42 slides from Petrotal's investor presentation, Apr 28, 2022
Slide 1: Investor Presentation April 28, 2022
Investor Presentation April 28, 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 summary6 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 835 Block 8 Fully diluted shares 931 Iquitos Mark
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 Reserves in mmbbl1 23% 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 18,000 Historical Production (bopd) 2P Possible programs 16,000 14,000 106.1 ▪ 11 hectare total field footprint 12,000 69.1 84.8 ▪ >50 community projects funded 10,000 75.8 8,00
Slide 6: Low risk development plan with excellent subsurface characteristics
Low risk development plan with excellent subsurface characteristics Bretaña field technical characteristics Drilled locations (Feb 2022) Future development (P1, P2, P3 locations) ■ Well defined four-way structure bounded by a reverse fault to the east – prolific geologic trap system ■ Vivian reservo
Slide 7: 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 BN-10H BN-11H BN-13H Produ
Slide 8: 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 9: 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 10: Peru country and fiscal overview
Peru country and fiscal overview Talara Refinery (upgrade completed) 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 ▪ $5 billion upgrade completed in April 2022 ▪ Materially increas
Slide 11: ESG leadership
ESG leadership Environmental(1) Social(1) ✓ Carbon monitoring quality certificate obtained with ongoing ✓ Hire local with no expats in Peru reduction plan ✓ Perception assessments from ✓ Approval for “Nature for Nature” Puinahua leaders plan ✓ Delivery of agri/aqua educational ✓ Comprehensive spill
Slide 12: Environmental, social and governance summary
Environmental, social and governance summary Promoting sustainable development for the benefit of all and without any discrimination ENVIRONMENTAL SOCIAL GOVERNANCE ▪ Breteña pad – single well pad and no encroachment ▪ Projects to encourage and mentor sustainable ▪ Six full time CSR1 employees, five
Slide 13: Bretaña Field
Bretana Field @PetroTal ”
Slide 14: Large producing and growing reserve base
Large producing and growing reserve base Bretaña (Block 95, 100% WI) - growing production base Reserves and production overview1,2 ■ Located in the Marañón Basin of northern Peru 2021 Reserves mmbbl1 Finding and Development ($ millions) Summary Summary 1P – 37 1P – 141 2P – 78 2P – 289 ■ 2021 2P res
Slide 15: 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 16: Long term development scope and profile
Long term development scope and profile Meaningful production levels for up to 15 years(1-4) Key highlights2 ■ Low risk path to 25,000 bopd 40,000 o ~$240 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
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 ~26,000 Incremental Oil Incremental Water Capacity Stage Complete bopd1 bopd bwpd2 ■ Full field Environmental Imp
Slide 18: Priority of Sales
Export routes Multiple export routes preserving pricing optionality 1 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 Multi-option offtake Storage Capacity(1-5) Storage # of days Cuml. # of days Access to: k bbl @ 12k bopd @ 12k bopd Bretaña 90 7.5 7.5 ONP Barges 360 30.0 37.5 Station 1 300 25.0 62.5 Iquitos Station 5 480 40.0 102.5 Total 1
Slide 20: Exploration Upside
Exploration Upside @PetroTal *°
Slide 21: 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 22: 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 23: Financial Highlights
Financial Highlights @PetroTal 7
Slide 24: 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 2021 2022 (estimated) $230 million FCF4 Cash 26.3 21.1 9.1 74.5 70.0 - 80.0 Amount for dividends and or share buy backs AR 8.6 20.9 12.0 3.8 20.0 if econ
Slide 25: Netback and ONP sensitivity analysis
Netback and ONP sensitivity analysis Robust netback by market(2) ONP downtime Adj. 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
Slide 26: 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 workin
Slide 27: Return of capital timeline
Return of capital timeline Requires $88/bbl Brent in 2022 Key highlights ▪ Contractually, bonds must be paid off prior to a return of capital policy $88.8 Mar 2022 $20 ▪ The optimal time to retire the bonds in 2022 is in Q3 from a call premium minimization standpoint $88.2 Apr 2022 $50 ▪ Retiring th
Slide 28: 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 22 well internal management 4.0x development plan, PetroTal could buyback all
Slide 29: 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 Adj. EBITDA of ~$350 million2 robust cash flow ▪ Resilient to o
Slide 30: Appendix
Appendix @PetroTal 7°
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 ~15 month trailing share price (pence) 9.3 GTE exit3 50 Ptal 45 40 35 30 5.0 8.2 25 3.5 3.6 3.3 3.1 2.9 20 3.3 2.6 2.5 2.1 2.2 2.1 2.1 1.8 15 2.3 2.7 2.8 1.8 1.1 1.8 1.7 1.1 0.9 1.4 1.5 1.3 10 1.1 1.7 3
Slide 34: Oil Sales Commercialization Agreements with Petroperu
Oil Sales Commercialization Agreements with Petroperu Petroperu sales contract illustration (example) Derivative summary as at Dec 31, 2021 Period entered ONP Volume Initially paid to PetroTal True-up due to PetroTal (Pump station #1) (Bayovar) Mbbl USD millions USD millions Start End Q4 2019 44.1 $
Slide 35: PetroTal led solution social unrest issues
PetroTal led solution social unrest issues PetroTal proposed social profit sharing value (2.5% community trust) PetroTal’s social trust illustration1 PetroTal Working table (group) Summary in USD Average realized Undiscounted trust value over ~20 years Comprised of (2P reserves case) (78 mmbbl) reve
Slide 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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