PetroTal Provides Additional Details on $65 Million Term Loan to Finance Erosion Control Investments at Bretana - Seite 2

Jose Antonio Sarmiento Giove, General Manager COFIDE, commented:

"PetroTal has played an important role in the district of Puinahua since 2017. The Company has always sought to ensure that the local communities benefit from production at Bretana, through improvements in education, health, infrastructure, and sustainability, and this erosion control project is another example of that. The project will aim to reduce further erosion along the river line, protecting local communities and ensuring that villagers can continue to go about their day to day lives without further worry. We look forward to working with the PetroTal team on this project."

Juan C. García-Vizcaíno, General Manager of BanBif, commented:

"This loan represents a milestone in our commitment to strengthening collaboration and trust between the private banking sector and the extractive resources industry. The recent formalization of the loan with PetroTal reflects our shared dedication to a stronger and more sustainable energy future."

Rationale for the Term Loan

Although PetroTal remains well capitalized to execute its 2025 capital program, which includes investments in erosion control infrastructure, the Company has been evaluating alternate means of financing the project. PetroTal sees the erosion control project as critical infrastructure that will ensure the Company captures the full value of Bretana resource for years to come. However, these costs are ultimately expected to be non-recurring, and the Company acknowledges investor concerns that the project represents a drain on near-term free cash flow. With that in mind, this loan essentially ring-fences erosion control expenses within a credit facility, allowing PetroTal to repay project costs over the next four years on favorable terms. There are no material changes to cost estimates for the erosion control project at this time; PetroTal continues to guide to total project costs of $65-75 million, of which $35-40 million has been budgeted for 2025.

Additional Information on the Term Loan

The Term Loan is drawable in two tranches, the first for $50 million and the second for $15 million. With the signing of the contract and the disbursement documents, the amount of the first tranche will be deposited in the escrow account, from which PetroTal will be able to withdraw amounts corresponding to the disbursements already paid. The balance will be held in the escrow account until it is withdrawn to fund cash expenses associated with the erosion control project. The project will begin with the construction of breakwaters 1, 2, and 3, which are for the benefit of the community and in which COFIDE is involved. The second tranche can be drawn within 18 months of the first tranche and will come due at the same date. This is an amortizing term loan, with a maturity date of April 2029. The loan is being extended to PetroTal's Peruvian subsidiary, PetroTal Peru, with a parent guarantee in place.