Bengal Energy Announces Closing of Purchase of Additional Interest
in the Cuisinier Oil Field and Operational Update
CALGARY, ALBERTA--(Marketwired - Dec 18, 2013) - Bengal Energy
Ltd. (TSX:BNG) ("Bengal" or the "Company") is pleased to announce
the closing of the previously announced purchase of an additional
5.357% working interest in the Cuisinier Oil Field and Petroleum
Lease 303 ('PL303') (the "Acquisition") in the Cooper-Eromanga
Basin in Queensland, Australia and to provide an operational
update.
Closing of Acquisition
In addition to the incremental working interest acquired in
Cuisinier, the Acquisition also includes a further 8.08% interest
in the Wompi Block (ATP 752), resulting in working interests in
those two projects of 30.357% and 38.08%, respectively. With the
increased working interest in Cuisinier, going forward the Company
will realize a greater proportion of production and a corresponding
impact on cash flows for periods subsequent to December 18, 2013.
As a result, Bengal estimates it will exit calendar 2013 with
corporate net production volumes between 500-550 boe/d, weighted
over 90% to ultra-light crude oil which commands a premium to Brent
pricing and contributes to strong netbacks. This exit production
estimate reflects the increased working interest gained through the
Acquisition, production contributions from all 14 wells currently
tied-in, and incorporates production declines inherent with new
production.
The effective date of the Acquisition is March 15, 2013, and the
purchase price of AUD $7.5 million / CAD $7.2 million remains
subject to final closing adjustments which are anticipated to be
nominal. Bengal funded the acquisition with proceeds from the CAD$8
million (gross) debt financing which closed July 5, 2013.
Operational Update
Bengal continues to advance its exploration and production
projects in both Australia and India.
Tookoonooka,
Australia:
In Bengal's Tookoonooka permit (ATP 732), which is located in
the emerging East Flank oil fairway of the Cooper Basin, the
Company's joint venture partner, Beach Energy Ltd., commenced
activity in December 2013. Under the terms of the joint venture
agreement, Beach will drill two wells and fund the acquisition of
an additional 300 km2 of 3D seismic up to a maximum commitment of
AUD$11.5 million, in order to earn a 50% interest in the permit and
assume operatorship.
On or about December 25, 2013, Beach intends to spud
'Tangalooma-1', the first of its two fully funded wells in
Tookoonooka. Tangalooma-1 is situated in close proximity (2.1 km
northeast) of Bengal's Caracal-1 well, a 52° API light oil
discovery. The target for Tangalooma-1 is a deeper Hutton zone,
which has proven highly prolific in other regions within the East
Flank of the Cooper Basin, and is within 20 km of the Tangalooma-1
location. Based on this spud date, and incorporating the impact of
the holiday break, Bengal anticipates having results from the well
before the end of January 2014. Timing for drilling of the second
well in Tookoonooka will be dependent on the results from
Tangalooma-1, and Bengal will continue to provide updates as
information comes available.
On December 10, 2013, Beach commenced its seismic acquisition
program ("The Nassarius Survey") in the north portion of the
permit, which is expected to continue through the end of January,
2014. Following the acquisition and processing of the Nassarius
Survey, a comprehensive interpretation process will be undertaken
which is designed to identify future drilling locations.
"Bengal is very pleased to be working with one of the Cooper
Basin's premier operators, Beach Energy Ltd.," said Chayan
Chakrabarty, President & CEO of Bengal. "We believe that
Beach's interest in funding the first two wells and seismic
acquisition demonstrates the great potential of our Tookoonooka
asset."
Reg Nelson, President & CEO of Beach Energy Ltd. said,
"Following our success in the Western Flank of the Basin, Beach has
been seeking an equivalent to that region and believe we have found
that opportunity with Tookoonooka in the Eastern Flank. Our joint
venture with Bengal enables Beach to apply its highly successful
Cooper Basin oil exploration and operational experience to further
unlock the potential of this underexplored area of the Basin."
Cuisinier,
Australia:
At the end of November, the sixth and final well of the
Company's 2013/2014 Cuisinier drilling campaign, Cuisinier-12, was
successfully tied-in, bringing the total gross number of wells on
stream to 14.
Based on the results of the most recent drilling program in
Cuisinier, Bengal and its partners have developed a dynamic model
of the field which incorporates all production history and pressure
data from the 14 producing wells, which will directly contribute to
an enhanced understanding of the reservoir and allow for efficient
exploitation of the field. The operator has indicated that the
early implementation of a pressure maintenance system would improve
production and ultimate recovery, and intends to initiate such a
program during 2014, with benefits expected by year-end.
Bengal plans to participate in an expanded 2014/2015 drilling
program in Cuisinier which includes 6 development wells, 2
appraisal wells and 1-2 contingent exploration wells located on new
structures identified on 3-D seismic. This program is scheduled to
commence in second quarter of calendar 2014, and conclude in fourth
quarter 2014. As a result, the impact of new production volumes is
expected in the latter half of calendar 2014.
Offshore AC/P47 Block,
Australia:
In addition to its onshore assets in the Cooper Basin, Bengal
holds a 100% interest in an offshore exploration permit, AC/P 47,
situated in the Timor Sea off Australia's northwest coast. After
extensive technical review internally and externally by potential
farm-in partners, the Company determined that this permit is very
high risk and does not contain sufficient technical merit to
justify further exploration capital expenditures. In February of
2013, the Company lodged an application to relinquish this property
and has now received Notice of Cancellation of the permit from the
Australian regulating authority "NOPTA".
Onshore
India
In Bengal's onshore India block situated within the Cauvery
Basin, the Company continues to coordinate with its partners to
drill three exploration wells, the first of which is scheduled to
commence late in the first quarter of calendar 2014. All three
locations are within an area of newly acquired 3D seismic and are
targeting formations between 1,200m and 2,000m depth, which are
known oil and gas producers in the offsetting Kovilkallappal and
North Kovilkallappal pools. These pools are situated between 6km
and 10kms from Bengal's block, have combined estimated recoverable
reserves of more than 25 million boe according to public sources,
and are in an area with existing oil and gas infrastructure.
Continued activity in onshore India through the balance of calendar
2014 and beyond will be dependent on the drilling results under the
current planned work program. Bengal has a 30% working interest in
the block.
About Bengal
Bengal Energy Ltd. (TSX:BNG) is an international oil and gas
exploration and production company with producing and prospective
light oil-weighted assets in Australia and India. Bengal offers
exposure to lower risk current production and cash flow, combined
with longer-term high potential impact exploration projects. The
Company's strategy is to achieve per share growth in cash flow,
production and reserves while establishing an attractive portfolio
of future drilling and exploration opportunities.
Additional information is available at www.bengalenergy.ca.
Forward-Looking Statements
This news release contains certain forward-looking
statements or information ("forward-looking statements") as defined
by applicable securities laws that involve substantial known and
unknown risks and uncertainties, many of which are beyond Bengal's
control. These statements relate to future events or our future
performance. All statements other than statements of historical
fact may be forward looking statements. The use of any of the words
"plan", "expect", "prospective", "project", "intend", "believe",
"should", "anticipate", "estimate", or other similar words or
statements that certain events "may" or "will" occur are intended
to identify forward-looking statements. The projections, estimates
and beliefs contained in such forward looking statements are based
on management's estimates, opinions, and assumptions at the time
the statements were made, including assumptions relating to: the
impact of economic conditions in North America, Australia, India
and globally; industry conditions; changes in laws and regulations
including, without limitation, the adoption of new environmental
laws and regulations and changes in how they are interpreted and
enforced; increased competition; the availability of qualified
operating or management personnel; fluctuations in commodity
prices, foreign exchange or interest rates; stock market volatility
and fluctuations in market valuations of companies with respect to
announced transactions and the final valuations thereof; and the
ability to obtain required approvals and extensions from regulatory
authorities. We believe the expectations reflected in those
forward-looking statements are reasonable but, no assurances can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits that Bengal will derive from them. As such, undue reliance
should not be placed on forward-looking statements.
Forward-looking statements contained herein include, but are
not limited to, statements regarding: Bengal's estimated oil
production volumes after giving effect to the organization of the
additional interest in ATP 752; the anticipated benefits of the
Acquisition and anticipated year end production increases as a
result of the Acquisition; the anticipated closing adjustments in
respect of the Acquisition; the Company's expected drilling program
in Cuisinier for 2014/2015, as well as the expected timing for
commencement and conclusion of such drilling program; additional
production volumes from Cuisinier as a result of the 2014/2015
drilling programs; a proposed pressure maintenance system; Beach's
ongoing seismic acquisition program; Beach's intentions to spud
Tangalooma-1 and Bengal's anticipated announcement of results of
such well; and Bengal's proposed exploration wells onshore India.
The forward looking statements contained herein are subject to
numerous known and unknown risks and uncertainties that may cause
Bengal's actual financial results, performance or achievement in
future periods to differ materially from those expressed in, or
implied by, these forward-looking statements, including but not
limited to, risks associated with: the failure to obtain required
safety assessments and rig acceptance; failure to secure required
equipment and personnel; changes in general global economic
conditions including, without limitations, the economic conditions
in North America, Australia, India; increased competition; the
availability of qualified operating or management personnel;
fluctuations in commodity prices, foreign exchange or interest
rates; changes in laws and regulations including, without
limitation, the adoption of new environmental and tax laws and
regulations and changes in how they are interpreted and enforced;
the results of exploration and development drilling and related
activities; the results of seismic activities and related
operations; changes in anticipated operating and transportation
costs; changes in pipeline accessibility; the ability to access
sufficient capital from internal and external sources; failure to
obtain or delays in obtaining regulatory approvals; and stock
market volatility.
Readers are encouraged to review the material risks
discussed in Bengal's Annual Information Form for the year ended
March 31, 2013 under the heading "Risk Factors" and in Bengal's
annual MD&A under the heading "Risk Factors". The Company
cautions that the foregoing list of assumptions, risks and
uncertainties is not exhaustive. The forward-looking statements
contained in this news release speak only as of the date hereof and
Bengal does not assume any obligation to publicly update or revise
them to reflect new events or circumstances, except as may be
require pursuant to applicable securities laws.
Netbacks
Netback is a non-IFRS measure. Netback per bbl is calculated
by dividing the revenue less royalties, operating and
transportation costs in total for the Company by the total
production of the Company measured in boe.
Bengal Energy Ltd.Chayan ChakrabartyPresident & Chief
Executive Officer(403) 205-2526Bengal Energy Ltd.Jerrad
BlanchardChief Financial Officer(403)
205-2526investor.relations@bengalenergy.cawww.bengalenergy.ca
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