Risk Management Update

PetroTal Provides Risk Management Update

Remaining 1.4 million barrels of oil in the ONP now hedged by Petroperu

Additional 622,000 barrels hedged by PetroTal

PetroTal maintains low cash flow exposure from Peruvian currency fluctuations

Calgary, AB and Houston, TX - April 20, 2021-PetroTal Corp. ("PetroTal" or the "Company") (TSXV: TAL and AIM: PTAL) is pleased to announce the following risk management update.  All currency amounts are in United States dollars ("USD"), unless otherwise stated.

Highlights:

-      Further to the Company's press release dated March 31, 2021, the remaining 1.4 million barrels of oil in the North Peruvian Pipeline ("ONP") have now been hedged by Petroperu, thereby securing future total true-up revenue payments of approximately USD$31 million for the original 1.8 million barrels;

-      At the corporate level, over 1.2 million barrels in total are now hedged, representing 32% of forecast oil production for April 2021 to December 2021.  PetroTal completed a second layer of its oil hedging program for 2021.  Approximately 338,000 barrels have been hedged (representing 9% of forecast oil production covering August 2021 to December 2021) in a Put structure with a $60/bbl strike.  In addition, 284,000 barrels have been hedged (representing 8% of forecast oil production covering May 2021 to July 2021), in a synthetic Put structure with a swap price of $62.15/bbl and a call strike of $66.00/bbl; 

-      To address the recent volatility of the Peruvian Sol, the Company has maintained low cash flow exposure to the currency, with Peruvian Sol accounting for an estimated 8% of operating costs, 60% of Peruvian general and administrative ("G&A") costs, and 8% of capital expenditures; and

-      2020 year-end results will be announced on April 22, 2021.

Petroperu Hedging Update

Further to the press release dated March 31, 2021, Petroperu has now finalized hedges for the remaining 1.4 million barrels of oil in the ONP, produced from Bretana in 2019 and 2020.  In doing so, PetroTal benefits from reduced volatility around the future value of the true-up revenue payments to be received during the remainder of 2021.  Based on the hedged amounts, the true-up payment is expected to be approximately USD$31 million, which will be paid to PetroTal when the barrels in the ONP reach the Bayovar port and are exported in batches by Petroperu.  In total, 1.8 million barrels of oil in the ONP have been hedged at prices between $60.60/bbl and $62.00/bbl and will be realized when the batches are sold.

Corporate Hedging Update

PetroTal has executed two additional hedges totaling 622,000 barrels to further protect the 2021 capital program.  The first hedge is in a Put structure for 338,000 barrels with a strike price of $60.00/bbl covering August 1, 2021 to December 31, 2021.  The second hedge is in a costless synthetic Put structure for 284,000 barrels, with a swap price of $62.15/bbl and a call strike of $66.00/bbl, covering May 1, 2021 to July 31, 2021, that allows the Company to receive the floating Brent price above the call strike should commodity prices continue to increase.  Including the hedged volume announced on March 31, 2021, PetroTal has hedged a total of 1.2 million barrels at the corporate level, representing 32% of forecast oil production for April 1, 2021 to December 31, 2021.  The Company plans to maintain a rolling hedge book as hedges mature and will look to be opportunistic if oil prices increase in the summer driving season.

Foreign Currency Exposure

PetroTal uses USD as its functional currency.  Revenues are received in USD and the majority of expenses, including debt service, are paid in USD creating limited consolidated cash flow exposure to fluctuations in the Peruvian Sol.  An estimated 8% of operating costs, 60% of Peruvian G&A, and 8% of capital expenditures are paid in Peruvian Sol and therefore a 1% movement in Peruvian Sol would impact these expenditures by approximately USD$180,000 on an annualized basis.  From a functional currency perspective, a weakening of the Peruvian Sol versus the USD would consolidate into lower USD translated expenses for the Company. 

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

"Over the past month we have been working closely with Petroperu to finalize hedging arrangements for the remaining barrels in the ONP.   Working with their risk management team has been seamless and we have an efficient working process to execute further derivative strategies together for future oil deliveries through the ONP.  The total true-up revenue of around USD$31 million will be a welcome addition to our 2021 liquidity. 

Furthermore, we are now in a position of strength to potentially layer on additional opportunistic hedges with approximately 32% of our volumes currently price protected.  We are naturally hedged from a currency standpoint from fluctuations in the Peruvian Sol, which has experienced increased volatility recently. 

Internally, financial and technical fundamentals have never been stronger, and our management team have many years of experience operating in different environments that transition politically.  Peru has attracted material external global capital and we believe it will continue to remain an attractive jurisdiction for investment, following the results of the upcoming Peruvian elections."

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 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

[email protected]

T: (713) 609-9101

Manolo Zuniga

President and Chief Executive Officer

[email protected]

T: (713) 609-9101

PetroTal Investor Relations

[email protected]

Celicourt Communications

Mark Antelme / Jimmy Lea

[email protected]

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; future true-up payments from Petroperu; hedging program and the terms thereof; timing of year end filings; and future development and growth prospects, including future acquisitions.  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 (including volatility of the Peruvian Sol), legal, political and economic instability in Peru (including in respect of the Peruvian election), 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 the year 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 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, hedging arrangements, exposure to Peruvian Sol, 2021 capital program and budget 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.