PetroTal Announces Q1 2021 Operations Update

2021 drilling program underway, Q1 2021 4H workover successfully completed, and Q1 2021 exit production on budget

Calgary, Alberta and Houston, Texas--(Newsfile Corp. - April 7, 2021) - PetroTal Corp. (TSXV: TAL) (AIM: PTAL) ("PetroTal" or the "Company") is pleased to announce the following operational update for Q1 2021. All currency amounts are in United States dollars (unless otherwise stated).

Highlights:

• PetroTal has commenced its 2021 drilling program by spudding the first well ("7D") on March 29, 2021, with expected completion the first week of May 2021;
• Successfully completed the workover of well 4H on time and under budget;
• Continued the installation of expanded production facilities ("CPF-2") that have arrived at the field with start-up dates finalized;
• Achieved Q1 2021 exit production of 8,275 barrels of oil per day ("bopd") with Q1 2021 production averaging approximately 7,300 bopd;
• Following completion of the 7D well, the team will drill the second water disposal well ("3WD") on the western flank of the structure, adding 50,000 barrels per day of water disposal capacity;
• Following completion of the 3WD well, the team will drill four development horizontal oil wells in H2 2021;
• Total cash liquidity of approximately $76 million, inclusive of an unrestricted balance of $53 million ($23 million are restricted for acquisitions and commodity price hedging). In addition, future Petroperu true-up payments of approximately $36 million to PetroTal are expected, significantly enhancing the 2021 cash flow profile compared to budget; and
• PetroTal will hold a general investor conference call on April 7, 2021 at 10:30am CT / 4:30pm UK. Details are outlined below.

Q1 2021 Operations Update

The first well in the 2021 development program was spud on March 29, 2021. The 7D deviated well is expected to be complete in the next 30 days, reaching a total depth of 2,880 meters and costing $9.5 million to drill, complete, and tie-in. This well is planned to develop the south side of the Bretana structure and execute an operationally straight forward drill.

Following the 7D well, the Company will drill a water disposal well (3WD), the second water disposal well drilled by PetroTal, that is expected to be completed and online by mid-June 2021. The Company plans to core the 3WD to gather technical data from the western flank of the Bretana structure, which will provide valuable reservoir information for future field development. Following completion of the 3WD well, and as part of the approved 2021 budget, the team will focus on drilling four additional horizontal oil wells, with the first one to the south of the structure and the following three in the northern section of the structure.

The Company has successfully completed the workover of its 4H well which was previously announced on February 18, 2021. The budget for this operation was $1.1 million with an actual spend of $984,000, 7% under budget. The new electro-submersible pump ("ESP") that was installed has a nominal capacity of 12,000 barrels of fluid per day ("bfpd") versus 8,000 bfpd with the old model. Since the workover, the 4H well has been producing approximately 2,300 bopd, compared to 1,872 bopd, prior to the pump failure. The Company plans to install similar higher capacity ESPs in most of the Bretana oil wells to optimize production and oil recoveries.

Notwithstanding the downtime of the 4H well, production still averaged approximately 7,300 bopd in Q1 2021, with a promising March 31, 2021 exit production rate of 8,275 bopd. This is materially on budget and 2021 production guidance is unchanged as announced on February 18, 2021, with an expected year end exit rate of 18,000 to 19,000 bopd.

The Company continues to progress the installation and tie-in of the CPF-2 expansion facilities which will take overall processing capacity to 124,000 bfpd with the ability to handle 24,000 bopd by mid-September 2021, coinciding with completion of two new oil storage tanks, bringing storage capacity at the field to 90,000 barrels of oil. The remaining components of the CPF-2, principally the additional formation water treatment facilities, will be ready in Q3 2021, coinciding with expected production increases. The CPF-2 total investment remains at $24 million, with the remaining $12 million in the 2021 budget, costing $4 million less than originally estimated.

March 31, 2021 Liquidity Update

At March 31, 2021, PetroTal has a cash position of approximately $76 million, of which $53 million is unrestricted, with $20 million dedicated to accretive acquisitions and $3 million as collateral for commodity price hedges. Accounts payable and accrued liabilities are approximately $37 million, a 16% reduction from $44 million at December 31, 2020. Ongoing payments will be managed from expected oil field revenues and internal cash resources. Pursuant to contractual terms with our suppliers, approximately $6 million (16%) is not due until after Q2 2021.

As previously announced on March 31, 2021, PetroTal will benefit from commodity prices hedges that have been placed to ensure cash flow stability for the capital expenditure program and a sufficient cushion over all the bond covenants. The current incremental value of the arranged true-up payments to PetroTal, which is subject to change, is approximately $36 million, based on the March 25, 2021 forward Brent strip oil price forecast.

COVID-19 Surveillance and Control

The Company has fully integrated a robust COVID-19 surveillance and control process into its operations and is equipped to handle increased operational activity to execute its 2021 capital budget. The Company has approximately $1 million budgeted in 2021 for COVID-19 related support. Key features of this plan include a one week quarantine and testing protocol for all incoming field personnel, revamped working conditions into smaller pod teams with mandatory protective equipment, and designated clinics and offsite isolation areas to address issues as they arise.

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:

"We are excited to start our 2021 drilling campaign. Due to an unprecedented decrease in world commodity prices, the impact of COVID-19, and government related social issues, it has been over a year since our team was drilling for growth and we are very happy to be back doing what we do best for our stakeholders. I am also very encouraged that considering the deferral of drilling, required maintenance activities, and natural field declines, our production levels remain strong as base oil production declines have performed as expected. The successful workover of the 4H well was a valuable operational test that, as a result of the higher production levels and revised expected ultimate recovery, sets the stage for us to do the same in other oil wells, at the appropriate time. With our strong current liquidity position, approximately $36 million of unbudgeted true-up revenue coming in 2021, and a fully funded capital program, I anticipate an exciting growth trajectory for our Company over the coming years.

Investor Presentation Update

PetroTal has updated the corporate presentation and is now available on the Company's website at www.petrotal-corp.com.

General Investor Call Participant Information

Time: 10:30am CT / 4:30pm UK on Wednesday April 7, 2021
Duration: 60 minutes
Dial in (Europe): +44 (0)330 336 9434
Dial in (United States): +1 720-543-0214
Dial in (Canada): +1 647 794 4605
Conference Code: 1609902

ABOUT PETROTAL

PetroTal is a publicly traded, dual‐quoted (TSXV: TAL) (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 its 100% working interest in Bretana oil field in Peru's Block 95 where oil production was initiated in June 2018, and in early 2020 became the second largest crude oil producer in Peru. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect in Block 107. The Company's management team has significant experience in developing and exploring for oil in Northern Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field.

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

PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com

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

Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
Tel: +44 (0) 20 7710 7600

Auctus Advisors LLP (Joint Broker)
Jonathan Wright / Rupert Holdsworth Hunt / Harry Baker
T: +44 (0) 7711 627449

READER ADVISORIES

FORWARD-LOOKING STATEMENTS: This press release contains certain statements that may be deemed to be forward-looking statements. Such statements relate to possible future events, including, but not limited to: PetroTal's business strategy, objectives, strength and focus; drilling, completions, workovers and other activities and the anticipated costs and results of such activities; the ability of the Company to achieve drilling success consistent with management's expectations; anticipated future production and revenue; drilling plans including the timing of drilling; oil production levels, including average production and exit production in 2021; the 2021 capital program and budget, including drilling plans; future true-up payments from Petroperu; the scale-up of CPF-2 and the timing thereof; COVID-19 surveillance and control process; hedging program and the terms thereof; and future development and growth prospects. All statements other than statements of historical fact may be forward-looking statements. In addition, statements relating to expected production, reserves, recovery, costs and valuation are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "estimate", "potential", "will", "should", "continue", "may", "objective" and similar expressions. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the ability of existing infrastructure to deliver production and the anticipated capital expenditures associated therewith, reservoir characteristics, recovery factor, exploration upside, prevailing commodity prices and the actual prices received for PetroTal's products, including pursuant to hedging arrangements, the availability and performance of drilling rigs, facilities, pipelines, other oilfield services and skilled labour, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the accuracy of PetroTal's geological interpretation of its drilling and land opportunities, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of new wells, the Company's growth strategy, general economic conditions and availability of required equipment and services. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price volatility, price differentials and the actual prices received for products, exchange rate fluctuations, legal, political and economic instability in Peru, access to transportation routes and markets for the Company's production, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to the risk factors identified in the Company's annual information form for the year ended December 31, 2019 and management's discussion and analysis for theyear ended December 31, 2020 and for the three and nine months ended September 30, 2020 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.

OIL AND GAS INFORMATION: References in this press release to production test rates, initial test production rates, and other short‐term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PetroTal. A pressure transient analysis or well‐test interpretation has not been carried out in respect of all wells. Accordingly, the Company cautions that the test results should be considered to be preliminary.

OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or sales in this press release mean "heavy crude oil" as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). All references to Brent indicate Intercontinental Exchange ("ICE") Brent.

FOFI DISCLOSURE: This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about PetroTal's prospective results of operations, production and production capacity, 2021 capital program and budget, cash flow profile, liquidity and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about PetroTal's anticipated future business operations. PetroTal disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. All FOFI contained in this press release complies with the requirements of Canadian securities legislation, including NI 51-101.

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.

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