PetroTal Announces 2023 Capital Investment Budget of US$125 million

Calgary, AB and Houston, TX - PetroTal Corp. ('PetroTal' or the 'Company') (TSX-V: TAL, AIM: PTAL and OTCQX: PTALF) is pleased to announce a fully funded 2023 capital investment program of $125 million that is expected to generate significant after-tax, pre debt service free cash flow of $55 million in 2023. Combined with the year-end 2022 cash balance of over $100 million, other working capital inflows, and contracted 2023 cash inflows of $57 million from Petroperu, the Company expects to have approximately $240 million of available cash to repay the Company's debt, accrued interest, and initiate a capital return program to shareholders through a combination of share buybacks and dividends. All amounts are quoted in US dollars.

2023 Key Highlights and Objectives(1,2)

Target 2023 production growth of 15% to 19% above 2022 levels, equivalent to 14,000 and 15,000 barrels of oil per day ('bopd') with similar associated sales volumes. Should additional sales capacity become available mid-year, the Company may be able to increase late 2023 production to approximately 17,000 bopd; Generate EBITDA of $220 million, based on the forward strip price of Brent oil for 2023 (at Dec 30, 2022), representing an average of $84/bbl; Drill and complete three horizontal development wells and one water disposal well in 2023, and complete two workovers of previously drilled wells; Invest in production infrastructure to support future development and production, including additional oil storage and water injection systems, the construction of a new west drilling platform ('L2 West Platform'), enabling future drilling until the end of 2025 and spending on erosion control for the Company's site; Generate after-tax free cash flow (before all debt service) of approximately $55 million, net of an estimated $40 million in corporate tax and related obligations; Become debt free in Q1 2023 from full payout of the remaining $80 million in bonds and thereafter maintain a minimum liquidity balance of $50 million, distributing out available cash that exceeds this amount through a share buyback and dividend program; Allocate an estimated $7.5 million in social trust payments in 2023 and another $10 million in other G&A related community projects.

1. See 'Non-GAAP Financial Measures'

2. The Company's bonds restrict any shareholder returns until fully paid out

Drilling and Completion Summary

PetroTal will invest approximately $69 million in drilling and workover activities in 2023. The Company's first operation will include a new water disposal well to enable the Company to have approximately 120,000 barrels of water per day ('bwpd') disposal capacity throughout 2023 and 140,000 bwpd by Q4 2023 once pumping infrastructure installation has been completed. PetroTal will subsequently drill wells 14H and 15H between mid-February 2023 and the end of June 2023. Drilling of the Company's third horizontal well in Q4 2023 will enable sales maximization should the Northern Peruvian Pipeline ('ONP') be operational near the end of 2023, and/or Brazilian sales exports expansion targets are achieved.

Facilities Budget

In 2023, PetroTal will focus on water management facilities, erosion control, construction of the L2 West Platform, and finish a new oil/diluent storage tank. PetroTal was thoughtful in the composition and quantum of its 2023 facilities budget ensuring critical infrastructure is completed earlier in 2023 with more flexible projects starting in H2 2023.

Block 95 Expansion Budget

A total of $3 million is budgeted for permit approvals and seismic preparation for the Block 95 expansion. During 2022, the Company was able to better technically assess the potential of its broad portfolio of Block 95 leads verifying various exciting subsurface features. While waiting for permit approvals, PetroTal will continue to evaluate the Company's deep portfolio of exploration assets for ways to maximize shareholder value.

Community Investment Budget

PetroTal will allocate nearly $18 million in 2023 for social and community programs comprised as follows:

5% social trust - approximately $7.5 million (various projects as approved by the trust)

$10 million in G&A and OPEX allocated to the following key projects in the community:

Community erosion control, New community lodging infrastructure, Process facilities for agricultural products in Puinahua, Diesel supply for Bretana community power generation; and, Bretana community electricity generator maintenance.

PetroTal's recently signed trust addendum unifies and aligns local communities in the operating district together as one. As a result of these successful negotiations, we anticipate a significant reduction in social unrest driven downtime in 2023, signaling an alignment between communities, the Government of Peru and the Company.

Production Guidance

PetroTal forecasts an average production and sales range of 14,000 bopd to 15,000 bopd for 2023. The production forecast considers a 5% social unrest driven downtime assumption, no access to the ONP, a constrained dry low river season (starting in mid Q3 2023 running until mid Q4 2023), and a barge route normalization period in January 2023. Current production in the field from January 8 to 14, 2023 has averaged 11,506 bopd as barge transportation routes have started to normalize from extensive December 2022 backlogged oil loadings.

Guidance on Operating Expenses

The Company is anticipating total Operating Expenses ('OPEX') to be under $9.00/bbl for 2023. Expected fixed and variable OPEX run rates have increased over 2022 levels, due to a higher producing well count, power needs and inflation pressures. Materially offsetting these increases are significant savings on barging, diluent, and COVID-19 costs compared to prior years.

Fixed lifting costs totaling approximately $37 million ($7.55/bbl) for 2023 and include:

Fuel

Various field and camp contract services

Variable transportation costs totaling $5 million ($1.02/bbl) for 2023 and include:

Gross diluent costs and diluent transportation - $0.50/bbl

Barging - $0.52/bbl

Variable transportation costs will be negligible in 2023 as no ONP oil sales are forecast. The Brazilian export sales are FOB Bretana and all transportation costs are deducted in the net realized oil price.

ABOUT PETROTAL

PetroTal is a publicly traded, tri?quoted (TSXV: TAL, AIM: PTAL and OTCQX: PTALF) 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. In early 2022, PetroTal became the largest crude oil producer in Peru. The Company's management team has significant experience in developing and exploring for oil in Peru and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretana oil field. It is actively building new initiatives to champion community sensitive energy production, benefiting all stakeholders.

Contact:

Douglas Urch

Executive Vice President and Chief Financial Officer

E: [e-mail]

T: [phone]

Manolo Zuniga

President and Chief Executive Officer

E: [e-mail]

T: [phone]

PetroTal Investor

E: [e-mail]

Celicourt Communications

Mark Antelme

Jimmy Lea

E: [e-mail]

T: [phone]

Strand Hanson Limited

Nominated & Financial Adviser

Ritchie Balmer

James Spinney

Robert Collins

T: [phone]

Stifel Nicolaus Europe Limited

Joint Broker

Callum Stewart

Simon Mensley

Ashton Clanfield

Tel: [phone]

Auctus Advisors LLP

Joint Broker

Jonathan Wright

T: [phone]

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; the impact of social disruption on the Company's operations; drilling, completions, workovers including of oil producing and water disposal wells and the results and timing of such activities; and other activities and the anticipated costs and results of such activities; PetroTal's 2023 budget and financial/operational guidance; PetroTal's anticipated operational results for 2023 including, but not limited to, anticipated production levels, capital expenditures and drilling plans; the Company's intentions with respect to return of capital, including returning $100 million to shareholders using dividends and share buybacks; the commencement of a normal course issuer bid and receipt of stock exchange approval thereof; the dividend policy; PetroTal's liquidity and financial position; the capacity for increased production in the event additional sales capacity is identified; PetroTal's plans to deliver strong operational performance and to generate free cash flow and growth; capital requirements; the ability of the Company to achieve drilling success consistent with management's expectations; the ability of the Company to achieve near term production targets and operate at unrestricted levels; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup and the impact of delays thereon; oil production levels, including average and exit production in 2023; sales expansion through alternative exports routes, including barging; the Company's proposals for collaboration with local communities and capital contributions in relation thereto including in respect of its investments in community, education, and support programs; 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', 'target', 'potential', 'will', 'should', 'continue', 'may', 'objective' and similar expressions. Without limitation of the foregoing, future dividend payments and share buybacks,, if any, and the level thereof, are uncertain, as the Company's return of capital and dividend policy and the funds available for the payment of such activities from time to time is dependent upon, among other things, free cash flow financial requirements for the Company's operations and the execution of its growth strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of PetroTal to pay dividends and buyback shares will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness. 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, the ability of the Ministry of Energy to effectively achieve its objectives in respect of reducing social conflict and collaborating towards continued investment in the energy sector, 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, impact of inflation on costs, 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, wars (including Russia's military actions in Ukraine), 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. Ongoing military actions between Russia and Ukraine have the potential to threaten the supply of oil and gas from the region. The long-term impacts of the actions. 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, increased operating and capital costs due to inflationary pressures, 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, 2021 and management's discussion and analysis for the three and nine months ended September 30, 2022 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.

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