PetroTal announces 2019 Year-End Oil Reserves and Operational Update

20% increase in 1P Reserves to 21.5 million barrels

and 21% increase in 2P Reserves to 47.7 million barrels

Calgary and Houston - February 18, 2020-PetroTal Corp. ("PetroTal" or the "Company") (TSX-V: TAL and AIM: PTAL), the Peruvian focused E&P company, is pleased to announce the results of its 2019 year-end reserve evaluation by Netherland, Sewell & Associates, Inc. ("NSAI") for the Bretana oil field, operated 100% by PetroTal, and to provide an update on current activity and production.  All currency amounts are in United States dollars (unless otherwise stated) and comparisons refer to December 31, 2018.

HIGHLIGHTS:

·    Proved ("1P") reserves  increased by 20%, to 21.5 million barrels ("mmbbl") from 17.9 mmbbl, Proved plus Probable ("2P") reserves increased by 21% to 47.7 mmbbl from 39.4 mmbbl and Proved plus Probable and Possible ("3P") reserves increased by 8% to 84.8 mmbbl from 78.7 mmbbl;

·    Related to 2019 oil production of 1.5 mmbbl, reserve additions replaced 240% in 1P reserves, 553% in 2P reserves and 407% in 3P reserves; Bretana's reserve life index for 1P and 2P reserves is now 7.7 years and 17.0 years, respectively;

·    Net Present Value (before tax, discounted at 10%) (NPV-10) is calculated at $434 million ($20.19/bbl) for 1P reserves, $1.1 billion ($23.02/bbl) for 2P reserves and $1.9 billion ($22.11/bbl) for 3P reserves;

o Using the 2019 year-end Brent oil price strip, NPV-10 is calculated at $280 million for 1P reserves, $722 million for 2P reserves and $1.2 billion for 3P reserves;

·    The successful 2019 development program combined with all future development and abandonment costs represent total finding and development costs of $12.04/bbl for 1P reserves, $5.32/bbl for 2P reserves and $4.06/bbl for 3P reserves;

·    Original oil in place ("OOIP") estimates for each category of reserves have also increased, with the 2P estimate increasing from 329 mmbbl to 364 mmbbl;

·    NSAI attributes a corresponding 2P recovery factor of 13.6%, increased from 12% at year-end 2018;

·    On a 2P basis, this represents a recycle ratio of 6.5 times, based on the total $5.32/bbl finding and development cost relative to a netback of $35/bbl (at $65/bbl Brent oil price);

·    Drilling has commenced for the Bretana 6H well, planned to have the longest lateral to date with an estimated drill time of 60 days; and

·    Current oil production at Bretana is approximately 10,000 barrels of oil per day ("bopd").

2019 Year-end Reserves Summary

The summary below sets forth PetroTal's reserves as at December 31, 2019, as presented in the independent reserves report prepared by NSAI.  The figures in the following tables have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") and the reserve definitions contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101").  In addition to the summary information disclosed in this announcement, more detailed information will be included in PetroTal's annual information form for the year ended December 31, 2019 (the "AIF") to be filed on SEDAR (www.sedar.com) and posted on PetroTal's website (www.Petrotal-corp.com) in April 2020.

Five Year Crude Oil Price Forecast - NSAI Report

(1)      The oil price projections used by NSAI are based upon an average of three December 31, 2019 forecasts of Brent Crude futures prices prepared by Canadian independent consultants.

(2)      Represents the forward strip oil price as at December 31, 2019, escalating at 2% per year after 2025.

Year-End Crude Oil Reserves (mmbbl)

Represents gross and net barrels since PetroTal owns a 100% working interest and a 100% net revenue interest in these properties.  Royalties are paid from sales proceeds.

Year-End Net Present Value at 10% - Before Tax ($ millions)

Year-End Net Asset Value ("NAV") per Share

Represents NPV-10 divided by common shares issued as of December 31 of each respective year.  Canadian share prices are converted at the respective year end foreign exchange conversion rates.

Reserve Life Index ("RLI")

(1)      Based on 2019 year-end reserves divided by average Q4 2019 production of approximately 7,757 bopd, annualized.

(2)      The license for Block 95 expires in 2041.

Future Development Costs

The following information sets forth development and abandonment costs deducted in the estimation of PetroTal's future net revenue attributable to the reserve categories noted below:

                Proved                                                                  $124 million

                Proved plus Probable                                      $194 million

                Proved plus Probable & Possible                $299 million

The future development and abandonment costs are estimates of capital expenditures required in the future for PetroTal to convert the corresponding reserves to proved developed producing reserves.  

OPERATIONS UPDATE

The Company commenced drilling the Bretana 6H well on February 17, 2020, following successful completion of the annual rig maintenance program.  This well will take approximately 60 days to drill and complete and is expected to have a 1,100-meter lateral section; longer than the 5H (863 meters) and 4H (500 meters) wells.  Following 6H, the Company will drill a second water disposal well followed by three other horizontal oil wells.  PetroTal's current oil production is approximately 10,000 bopd.  Production has fluctuated during the commissioning of the Central Processing Facility which commenced in late December and is now nearing completion.

Manolo Zuniga, President and Chief Executive Officer, commented:

"Following the Company's successful drilling campaign in 2019, we are very pleased to see a meaningful upgrade of reserves in the 1P and 2P categories.  PetroTal is glad to see that NSAI's 2P OOIP estimate now approximates our internal estimate.  We are confident that future production data will substantiate the higher recovery factors, and in the end, all of the above serves to create value for our stakeholders. 

We look forward to achieving further growth in 2020, with new oil wells and increases in recovery factor, and I would like to sincerely thank our team, as well as our shareholders for their ongoing support of PetroTal."

Qualified Person's Statement

Estuardo Alvarez-Calderon, the Company's Vice President, Exploration and Development, who has over 35 years of relevant experience in the oil industry, has approved the technical information contained in this announcement.  Mr. Alvarez-Calderon received a Bachelor of Science degree in Geology from the University of Texas at Austin and is registered on the Texas Board of Professional Geoscientists. 

The recovery and reserve estimates provided in this news release are estimates only, and there is no guarantee that the estimated reserves will be recovered.  Actual reserves may eventually prove to be greater than, or less than, the estimates provided herein.  In certain of the tables set forth below, the columns may not add due to rounding.

ABOUT PETROTAL

PetroTal is a publicly‐traded, dual‐quoted (TSXV: TAL and AIM: PTAL) oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru.  PetroTal's flagship asset is the Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, six months after acquisition, and within 18 months has exceeded the initial 10,000 bopd goal.  Additionally, the Company has large exploration upside and is actively engaged to find a partner to drill the Osheki prospect and other prospects in Block 107.  The Company's management team has significant experience in developing and exploring for oil in all of Peru's oil producing basins and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field.  More information on the Company can be found at www.PetroTal‐Corp.com.

For further information, please see the Company's website at www.petrotal-corp.com, the Company's filed documents at www.sedar.com, or below:

Douglas Urch

Executive Vice President and Chief Financial Officer

Durch@PetroTal-Corp.com

T: (713) 609-9101

Manolo Zuniga

President and Chief Executive Officer

Mzuniga@PetroTal-Corp.com

T: (713) 609-9101

Celicourt Communications

Mark Antelme / Jimmy Lea

petrotal@celicourt.uk

T : 44 (0) 208 434 2643

Strand Hanson Limited (Nominated & Financial Adviser)

James Spinney / Ritchie Balmer

T: 44 (0) 207 409 3494

Numis Securities Limited (Joint Broker)

John Prior / Emily Morris

T: +44 (0) 207 260 1000

Stifel Nicolaus Europe Limited (Joint Broker)

Callum Stewart / Nicholas Rhodes / Ashton Clanfield

Tel: +44 (0) 20 7710 7600

READER ADVISORIES 

FORWARD-LOOKING STATEMENTS: This news release contains forward-looking statements. More particularly, and without limitation, this news release contains statements concerning PetroTal's assessment of future plans and operations for the Company. When used in this document, the words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by PetroTal. Although PetroTal believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to: PetroTal may not obtain the required approvals from the TSX Venture Exchange and other factors more fully described from time to time in the reports and filings made by PetroTal with securities regulatory authorities. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2018 and management's discussion and analysis for the three and ninex months ended September 30, 2019 which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.