Page 14 - LatAmOil Week 13 2021

LatAmOil NEWS IN BRIEF LatAmOil

Ecopetrol is Colombia’s largest firm and is an programme and mitigate Brent oil price down- arrangements for the remaining 1.8mn barrels
integrated oil company that is among the 50 side risk prior to oil delivery, PetroTal has exe- of oil in the ONP from previous deliveries, pro-
largest in the world and the four largest in Latin cuted a 590,252 barrel Put option with a strike duced from Bretaña in 2019 and 2020. These
America. In addition to Colombia, where it gen- price of $60 per barrel, for the period April arranged volumes carry an average initial price
erates over 60% of the country’s production, it 1, 2021 to December 31, 2021. The Com- of $44 per barrel and are expected to reach the
is active in exploration and production in the pany hedged these volumes based on the 2021 Bayovar port for export by Petroperu over the
United States (Permian basin and Gulf of Mex- budget’s monthly oil production profile and next six months from April 2021. The current
ico), Brazil and Mexico. Ecopetrol operates the will look to layer on additional H2-2021 and incremental value of the arranged true-up pay-
largest refinery in Colombia, most of the coun- H1-2022 hedges as production levels grow fol- ments to PetroTal, which is subject to change,
try’s oil pipeline and polyduct network and is lowing commencement of drilling activity. is approximately $36mn, based on the March
significantly increasing its share of biofuels. Second Oil Export Sale Through Brazil: The 25, 2021 forward Brent strip oil price forecast.
Ecopetrol, March 25 2021 Company has completed a second oil export As noted below, a Swap arrangement has been
through Brazil of 225,000 barrels of oil, sold FOB placed by Petroperu for the first 360,000 barrels.
Bretaña. The oil was loaded into a series of barges Petroperu will continue to hedge the remain-
PERFORMANCE at Bretaña, destined for transport to a terminal ing arranged 1.4mn barrels and ongoing future
near Manaus, Brazil. The sales invoice is based deliveries into the ONP.
PetroTal announces oil sales on the Brent oil price forecast for April 2021 of First True-up ONP Revenue Sale Tendered in
$61 per barrel, and PetroTal has received full April: The Company was advised that Petroperu
and risk management update payment for this export. Based on run rate cost has arranged a physical sale in April of 360,000
assumptions, inclusive of royalties, operating barrels arriving at the Bayovar port, at April’s
PetroTal is pleased to announce the second and transportation costs, and export related fees, average Brent price less a $2.06 per barrel quality
export of Bretaña crude oil into the Atlantic the Company estimates a netback of approxi- differential. This represents approximately 20%
region through Brazil and the execution of crude mately $31 per barrel, an improvement from the of the arranged barrels that were subject to the
oil price derivative contracts. netback realised from the previously announced contingent derivative liability in 2020. To assure
Highlights: PetroTal has completed the ini- first export sale through Brazil in December price certainty for PetroTal in April, Petroperu
tial implementation of its oil price hedging 2020. PetroTal has now executed a contract for has hedged this volume with a $62 per barrel
programme for 2021. Approximately 590,000 additional Brazilian oil exports through to July Swap.
barrels have been hedged, (representing approx- 31, 2022 that will supplement existing sales Manuel Pablo Zuniga-Pflucker, President
imately 16% of forecast oil production covering arrangements using the ONP, providing flex- and CEO, commented: “We are very pleased to
April 1, 2021, to December 31, 2021), in a Put ibility in the sales programme and production be able to execute our second Brazil shipment,
structure with a $60 per barrel strike; The Com- continuity. demonstrating this is a viable off-take option
pany completed the second Bretaña oil export Petroperu Hedging Programme Update: that can scale up with operational pace and cost
through Brazil, selling 225,000 barrels of oil at For sales into the ONP, the Company is paid an efficiency, based on production activity and
$61 per barrel less a quality differential and com- initial price when oil is delivered to pump sta- ONP availability. Having the Brazilian offtake
mercial fees, similar to the first Brazilian export tion #1 at Saramuro, with a true-up payment option ensures healthy commercial competi-
completed in December 2020; and Physical sales received approximately eight months later from tion amongst all oil sales options. The associated
from the 1.8mn barrels of oil in the Northern Oil Petroperu, based on the Brent price at the Bay- commercial terms on all our recent liftings are
Pipeline (ONP) have commenced, with 360,000 ovar port. To alleviate the oil price risk associ- an indicator of the continued high demand of
barrels to be sold by Petroperu in April for $62 ated with PetroTal’s monthly deliveries into the Bretaña crude. We are also extremely happy to
per barrel less a $2.06 per barrel quality differen- ONP, the monthly sales invoices are, pursuant enter into the first phase of our 2021 hedging
tial, further reinforcing the strong demand for to the previously announced amended oil sales strategy, giving stakeholders greater confidence
Bretaña oil. This will result in PetroTal receiving contract with Petroperu, now priced based on around our 2021 cash flow profile. We have an
an incremental true-up payment of approxi- the eight-month Brent strip price forecast, and exciting operational programme planned over
mately $20 per barrel over the revenue booked Petroperu has placed oil price Swaps for these the coming months and we look forward to
from the original sale, including differential sales to alleviate significant price adjustments. updating our progress shortly.”
adjustments. With the Company’s guidance and in PetroTal is a publicly traded, dual‐quoted oil
Executed Corporate Hedging Contract: In accordance with the amended oil sales contract, and gas development and production company
order to support the 2021 capital development Petroperu is facilitating commodity price hedge domiciled in Calgary, Alberta, focused on the
development of oil assets in Peru. PetroTal’s flag-
ship asset is its 100% working interest in Bretaña
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 sig-
nificant 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-effec-
tively developing the Bretaña oil field.
PetroTal, March 31 2021

P14 www. NEWSBASE .com Week 13 01•April•2021