PetroTal completes acquisition of Peru Block 131

PetroTal Corp. has successfully acquired 100% working interest in Peru Block 131, following its acquisition of CEPSA Peruana, the Peruvian business unit of Compañía Española de Petróleos (CEPSA). The Los Angeles oil field at Block 131 was discovered by CEPSA Peru in 2013.

“The acquisition of Block 131 represents an important milestone for PetroTal, and a pivotal step in our growth strategy,” said Manuel Pablo Zúñiga-Pflücker, President and Chief Executive Officer of PetroTal. “Importantly, Block 131 diversifies our production base within Peru, establishing a new platform for future production and reserves growth.

PetroTal’s technical team has already identified numerous synergies between the Block 131 assets and our existing operations at Block 95. Similar to the strategy we have already successfully employed at Bretaña, we plan to apply modern drilling techniques at the Los Angeles field, which has significant unutilized facility capacity. We are currently finalizing our development plan for the assets and look forward to providing more details at the appropriate time.”

Key highlights

The Los Angeles field at Block 131 has produced an average of 817 bopd from January 1 to September 30, 2024. The on-site facility infrastructure site was built to accommodate throughput of up to 5,500 bopd, providing a clear runway for production growth and improved unit operating cost structure. The produced oil is 45°API, which offers potential for marketing synergies with PetroTal’s heavy Bretaña crude. Additional highlights include:

• Visibility for low-cost, light oil production and reserve additions in the near-term, with upside resource potential in deeper, unproduced zones.
• PetroTal estimates remaining Proved recoverable reserves are 2.0 million barrels (“bbls”) of light oil, and 4.2 million bbls of Proved plus Probable reserves. PetroTal sees upside to reserve bookings given multi-horizon reservoir potential and improved geophysical interpretations.
• Blending of Block 131’s light oil production may allow PetroTal to increase sales of heavy Bretaña crude to the Iquitos refinery, at improved differentials to the Brent benchmark.

Background

The Los Angeles oil field at Block 131 was discovered by CEPSA Peru in 2013. As of September 30, 2024 the field has produced a total of approximately 7.8 million bbls. Block 131 is held under an exploration and production license agreement expiring in 2038, subject to a 23.48% royalty rate at field production levels under 5,000 bopd, with a similar scaling factor to Block 95 above 5,000 bopd. All produced oil is currently sold to PetroPeru, Peru’s state-owned oil company, at Pucallpa. The oil is then transported by barge along the Ucayali River (passing PetroTal’s Bretaña oil field) to the Iquitos refinery.