Calgary and Houston - December 16, 2019-PetroTal Corp. ("PetroTal" or the "Company") (TSX‐V: TAL and AIM: PTAL) is pleased to provide an update on its operations and production at the Bretaña oil field in Block 95 in Peru (100% working interest). All monetary amounts in this release are in United States dollars.
· Initial three‐day production rate at the BN 95-5H horizontal well ("5H") is 8,250 barrels of oil per day ("BOPD"), exceeding management's expectations.
· 5H well completed on time and came in approximately 20% ($3.0 million) less than the original $14.5 million budget.
· Completed the 5H well using new technology to maximize oil production.
· The Bretaña oil field reached new record production of over 9,000 BOPD, currently with just two (the 5H and the 1XD) of the six wells online.
· Close to completion of the central production facilities ("CPF-1"), which will increase overall production capacity to 15,000 BOPD.
· Fourth quarter average production of at least 7,500 BOPD and 2019 exit rate between 11,000 BOPD to 13,000 BOPD reconfirmed.
PetroTal has successfully completed the 5H well, the Company's second horizontal well in the Bretaña oil field. The well reached the target Vivian formation at the prognosed vertical depth of 2,696 meters. The 863-meter horizontal section inside the main productive oil reservoir makes the 5H well the longest horizontal well drilled to date in Peru. Just like in well 4H, the 5H well completion also utilizes autonomous inflow control device ("AICD") valves to maximize oil production. Initial production from the 5H well during the first three days of production was 8,250 BOPD. The 5H well was drilled updip towards the crest of the structure and the results confirmed management's forecast of the reservoir, including high reservoir permeability that is allowing the well to flow at high rates. The well cost was approximately $11.5 million, under budget by approximately $3.0 million (representing a 20% saving), which will expedite payback of the well. The Company will announce additional well data, including sustained rates, with its operations update in January 2020.
PetroTal will commission phase one of the Bretaña central production facilities ("CPF‐1") before year-end 2019, which will increase full field production capacity to approximately 15,000 BOPD. With this additional capacity, PetroTal will be able to bring the other wells back online. Incremental implementation of phase two of the Company's central production facilities ("CPF‐2") is planned for September 2020. When CPF‐2 is fully integrated by year‐end 2020, PetroTal will have the capacity to produce approximately 20,000 BOPD. Facility expansion is being implemented on a modular basis to time facilities with well completions to most efficiently deploy capital.
With this production from the 5H well, the Company expects to meet its 2019 year-end production guidance of between 11,000 - 13,000 BOPD, as stated on November 25, 2019. The drill rig will now undergo annual maintenance for about six weeks, after which, the Company plans to drill a second water disposal well followed by additional oil wells.
Manolo Zuniga, President and Chief Executive Officer, commented:
"PetroTal is pleased with the success of the 5H well and proud to play a historical role by drilling Peru's longest horizontal well to date. I wish to thank the technical and drilling team for their efforts to ensure safe operations and their dedication directed to the 5H well. The strong well performance emphasizes the significant upside of the Bretaña oil field and the considerable growth potential the asset possesses. Our interpretation of the reservoir has been confirmed with this well and the increased production will enhance field economics. The ongoing facility enhancements will enable us to effectively manage the increasing oil field production."