PetroTal today announced that following the recommencement of operations of Petroperu’s Northern Oil Pipeline (“ONP”), oil production at the Bretana oil field is currently at 9,500 barrels per day (“bopd”) and expected to reach 10,000 bopd in the next few days. Total oil production for 2020 was 2.08 million barrels (5,675 bopd), as compared to 1.5 million barrels (4,131 bopd) in 2019. All amounts herein are in United States dollars (“US$”) unless otherwise stated.

Highlights

• Total oil produced in 2020 was 2.08 million barrels (5,675 bopd), significantly impacted by the Covid-19 pandemic and ensuing social unrest;
• 59% of the 2020 oil production was produced during the first four months of the year, before the pandemic forced Petroperu to shut down the ONP in early May 2020;
• In December 2020, the Company successfully completed a 106,000 barrel FOB Bretana pilot oil export via Brazil, and is preparing for a second pilot of 200,000 barrels during February 2021;
• The successful initial Brazil export pilot, as well as the storage of produced oil in contracted barges, allowed the Company to produce 590,000 barrels in the fourth quarter (“Q4”) of 2020, even with the ONP shut down during the entire quarter;
• With the ONP now fully operational, production from the Bretana oil field is currently 9,500 bopd and is expected to reach 10,000 bopd in the next few days;
• As a result of higher oil prices, the Company’s contingent derivative liability was reduced to $2.7 million at December 31, 2020; and,
• At year-end 2020, the Company had cash resources of approximately $9.6 million.

Petroperu Pipeline Operations

Petroperu announced on January 3, 2021 that they had completed their assessment of the pump stations and the ONP, including the area of the ONP that required an inspection, and that the ONP is now fully operational. Pump Station No.1, at Saramuro, started pumping oil towards Pump Station No.5 on December 28, 2020 allowing the Company to unload, before the end of the 2020, 38,000 barrels of the 131,300 barrels of oil stored in six contracted barges at Saramuro, with the remaining 93,300 barrels unloaded during the first week of January. All oil unloaded at Pump Station No.1 is invoiced to Petroperu at the beginning of each following month.

2020 Oil Production

The Company achieved annual oil production for 2020 of 2.08 million barrels (5,675 bopd), as compared to annual oil production in 2019 of 1.5 million barrels (4,131 bopd). The Bretana oil field was shut in for a total of 121 days as a result of the Peruvian government health department-directed Covid-19 related shut in (71 days) and subsequent social disruption (50 days). Considering the need to also constrain production during this period, PetroTal had to shut in or constrain production for approximately 47% of 2020.

For Q4 2020, PetroTal produced throughout the quarter, although at constrained rates in order to manage market availability to deliver oil to the Iquitos refinery, the ONP, the successful 106,000 barrel pilot Brazilian export, and ultimately store oil in the Company’s tanks and contracted barges prior to delivery. Average oil production from the Bretana oil field in Q4 2020 was 6,413 bopd, compared to 2,444 bopd for Q3 2020, and 7,757 bopd for Q4 2019.

At December 31, 2020, PetroTal held 29,700 barrels of oil in its tank inventory and 133,300 barrels of oil in contracted barges, comprising 93,300 barrels awaiting delivery into the ONP at Saramuro and 40,000 barrels on their way to the Iquitos Refinery. The barges have now completed delivery of this oil to the ONP and Iquitos.

KeyFacts Energy: PetroTal Peru country profile