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PetroTal Announces Q2 2021 Financial and Operating Results PetroTal completes 8th producing well , increases water disposal capacity , and outperforms Q2 2021 production guidance under restricted flow conditions Calgary , Alberta and Houston , Texas -- ( Newsfile Corp. - August 26 , 2021 ) - PetroTal Corp. ( TSXV : TAL ) ( AIM : PTAL ) ( " PetroTal " or the " Company " ) is pleased to announce its financial and operating results for the six ( " H1 " ) and three months ( " Q2 " ) ended June 30 , 2021 . Selected financial and operational information is outlined below and should be read in conjunction with the Company's unaudited consolidated financial statements ( " Financial Statements " ) , and management's discussion and analysis ( " MD & A " ) for Q2 2021 , which are available on SEDAR at www.sedar.com and on the Company's website at www.PetroTal-Corp.com . All amounts herein are in United States dollars ( " USD " ) unless otherwise stated . Highlights : • Outperformed Q2 2021 production guidance by 2 % and Q1 2021 production by 21 % , delivering 8,839 bopd under constrained production conditions , as previously described in the Company's July 20 , 2021 RNS ; • Generated a significant increase in revenue of $ 42.8 million ( $ 53.20 / bbl ) in Q2 2021 versus $ 32.4 million ( $ 41.91 / bbl ) in Q1 2021 ; • Achieved record netback and net operating income in Q2 2021 of $ 36.88 / bbl and $ 29.7 million , respectively ; • Operating and direct transportation costs in Q2 2021 were $ 10.8 million ( $ 13.45 / bbl ) as compared to $ 10.6 million ( $ 13.78 / bbl ) in Q1 2021 ; • Generated free cash flow ( 1 ) , before leverage and working capital adjustments , in Q2 2021 of $ 2.4 million and in H1 2021 of $ 11.5 million , a record for the Company ; • Strong liquidity position , building total cash quarter over quarter to over $ 79.5 million as at June 30 , 2021 up 5 % from March 31 , 2021. $ 25.4 million of total cash is restricted ; • Net income of $ 11.4 million for the quarter , demonstrating an efficient operating cost structure , attractive capital base , and supportive fiscal terms ; • All Q2 2021 bond covenants met with substantial headroom . The Company exited Q2 2021 with a 0.41x leverage ratio which included $ 40.6 million of net debt calculated per the bond indenture ; • Continued to de - risk commodity price exposure that brings the total corporate hedge percentage to 44 % for the remaining four months of 2021 forecast production , protecting prices of $ 60 / bbl Brent ; • Necessary modifications to the water disposal system are ongoing . The field can now actively dispose of approximately 80,000 barrels of water per day ( " bwpd " ) and 100,000 bwpd when the modifications are completed in September ; • Achieved payback on well 7D , approximately 2.5 months post completion ; • Current constrained production is 8,513 bopd ( last seven - day average to August 20 , 2021 ) . Unrestrained production is expected to be restored in September ; • Revised H2 2021 production guidance as a result of a rescheduled and deferred drilling program stemming initially from the COVID - 19 protocol's impact and from the water disposal well drilling delays . The 2021 average production range is now guided at 10,000 to 11,000 bopd ( from 11,000 - 12,000 bopd ) . Exit December 2021 production has been slightly revised down to 17,000 - 18,000 bopd ( from 18,000 - 19,000 bopd ) , as the impact of the BN - 10H well won't be incorporated until early next year ;