Q2 2020 Financial Highlights

• Revenue decreased to $9.8 million ($22.87/bbl) compared to $41.8 million ($44.51/bbl) in Q1 2020, due to the global oil price collapse and the COVID-19 pandemic, which led to the field being shut in on May 7, 2020. The average Brent oil price dropped by 42% to $29.19/bbl from $50.14/bbl for Q1 2020;

• Royalties to the Peruvian government were $0.1 million (1.3% of revenue) compared to $1.8 million (4.3% of revenue) for Q1 2020;

• Cash flow from operations was $0.9 million compared to $15.1 million in Q1 2020;

• Operating costs were $2.4 million ($5.67/bbl), a reduction from $6.0 million ($6.42/bbl) for Q1 2020;

• Transportation costs were $4.5 million ($10.50/bbl) compared to $16.1 million ($17.18/bbl) for Q1 2020, reflecting the variable cost nature associated with lower production;

• The Company had cash of $20.4 million at the end of Q2 2020 compared to $7.4 million at the end of Q1 2020;

• Net operating income was $2.8 million ($6.40/bbl) compared to net operating income of $17.8 million ($18.98/bbl) in Q1 2020;

• The Company has a contingent derivative liability relating to oil sold to PetroPeru, and the timing difference between when PetroPeru provides an initial payment for the oil and when the final settlement price is calculated. As at March 31, 2020, this liability was $40.4 million, as a result of the fall in oil prices in that quarter. As at June 30, 2020, this amount was reduced to $22.2 million, reflecting the rise in oil prices during the most recent quarter. The amount of the ultimate actual liability will be crystallized when the oil is actually sold by PetroPeru, which is expected to occur in Q3 and Q4;

• During May 2020, the Company received financial support related to the COVID-19 economic impact totaling $3.2 million. The Peruvian government sponsored a stimulus program that provided $2.9 million (to be repaid over three years, with repayment commencing after one year for a two year period, at an annual interest at 1.12%) and the US government provided $0.3 million under the Paycheck Protection Program (no repayment is required);

• On June 12, 2020, the Company announced that the contingent liability pertaining to the Brent oil price reduction had been structured into a three-year payment arrangement ("Arrangement") with PetroPeru (the "Parties"):

  • The amount of this contingent liability to PetroPeru will be definitively determined when the security arrangements for PetroTal's obligations are finalized, which is expected to be by the end of August 2020. Based on current Brent oil prices, the liability is expected to be lower than $22 million;

  • The Arrangement allows PetroTal to settle the obligations to PetroPeru now while still allowing the Company to benefit from higher oil prices forecasted by the Brent forward strip pricing curve, when the physical oil sales occur;

  • The Parties have agreed to extend the one-year Oil Sales Contract to three years upon expiry of the current term on December 23, 2020;

  • The Parties established a framework to ensure that future oil sales under the Oil Sales Contract have adequate hedge protection to avoid future downside losses;

  • The Parties have agreed to further amendments to the Oil Sales Contract for lower pipeline tariffs and fees during the period of low oil prices; and,

• On June 18, 2020, the Company completed an equity issue, raising gross proceeds of approximately $18 million. The Company intends to use the net proceeds for the ongoing development of the Bretana oilfield and for general corporate purposes.

June 30, 2020 Subsequent Events

• Bretana oil production recommenced on July 15, 2020 and achieved over 12,000 bopd when all seven wells were online. Oil deliveries commenced initially to the Iquitos refinery, where approximately 40,000 barrels were delivered during July 2020. Oil was also barged to the Saramuro Pump Station ready for delivery into the Northern Oil Pipeline ("ONP") for recommencement of its operations. Approximately 40,000 barrels were delivered to Saramuro in July 2020. To manage the Company's inventory and barge storage capacity, production at that time was reduced to approximately 8,000 bopd until such time as the ONP is back to full capacity;

• As disclosed in the Company's announcement on August 10, 2020, on August 9, 2020, as a preemptive measure, the Bretana oil field was shut down due to civil unrest against the government outside the field camp that resulted in a violent confrontation between protestors, intending to occupy the Bretana facilities, and the police. The civil unrest has been conducted by the same group that, the prior week, took over PetroPeru's pump station No.5 at Saramiriza, seeking government assistance against the COVID-19 crisis. The field closure is expected to last until the inquiry into the incident is completed. The inquiry is progressing and favorable discussions between the Government of Peru and the communities has resulted in the protestors allowing operations at the ONP to restart this week. The Company expects that it will be able to recommence oil production at Bretana by the end of August 2020; and,

• On June 25, 2020, PetroTal entered a commodity swap transaction with an international bank and commodity broker to hedge 460,000 barrels of crude oil at $40.58 per barrel. This transaction had a termination date of July 17, 2020 to coincide with a physical oil sale of a similar amount.

Liquidity Update

At August 17, 2020, PetroTal has cash resources of $13.5 million, with accounts payable and accrued liabilities of approximately $37 million, a reduction of $12 million from the end of Q2 2020. Ongoing payments will be managed from expected oil field revenues and internal cash resources. Pursuant to contractual terms with our suppliers, approximately 23% of the amount are not due until into 2021.

Updated Corporate Presentation

PetroTal is pleased to announce that on August 19, 2020, an updated corporate presentation will be available on the Company's website at www.petrotal-corp.com.

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

"In the face of a difficult macro environment, I am very pleased with PetroTal's performance during the second quarter of the year. A number of the steps we took to preserve the Company's liquidity began to yield results, which enabled us to deliver a break-even quarter.

"Whilst it is disappointing that we had to shut in the Bretana oil field post period end, it is a testament to the team as to how quickly we were able to get production back up and running prior to this shutdown, quickly achieving over 12,000 bopd when all seven wells commenced production. First and foremost, we are a Peruvian led and operated oil company whose mission and vision is in tune with the local communities, so we look forward to working with all our stakeholders to get production at the field up and running as soon as practically possible."

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 contact:

Douglas Urch
Executive Vice President and Chief Financial Officer
Durch@PetroTal-Corp.com
T: (713) 609-9101

Manuel Pablo Zuniga-Pflucker
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101

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; the Company's ability to operate in accordance with developing public health efforts to contain COVID-19; the timing of filing the Interim Filings. All statements other than statements of historical fact may be forward‐looking statements. 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. 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 and 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 and management's discussion and analysis for the year ended December 31, 2019 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.

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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