Madalena - Cases CAS X-5 for the Vaca Muerta Shale, Continues with
Steady Horizontal Development, Provides Team Update and Layers in
Production Hedges
TSXV Trading Symbol: MVN
CALGARY, Feb. 4, 2013 /CNW/ - Madalena Ventures Inc. (the
"Company" or "Madalena" (TSX VENTURE: MVN) is pleased to provide
the following updates:
International Operations Update - Neuquen
Basin
In Argentina,
exploration and delineation activity continues on the Company's
large petroleum in-place unconventional shales and conventional
tight sand plays. In the southern portion of the Coiron
Amargo block (Madalena 35% W.I.), Madalena continues to define and
quantify the Vaca Muerta shale potential on the block with the
recent drilling of the CAS X-5 exploration well. The CAS X-5
location was drilled to a total depth of 3,400 meters (or 11,155
feet) and encountered hydrocarbon in the Vaca Muerta as expected.
CAS X-5 has now been cased with approximately 100 meters of Vaca
Muerta shale on logs and an average total organic content ("TOC")
over the 100 meter section of over 4%, confirming the high quality
of the Vaca Muerta on the block. Based on technical
information gathered to date, Coiron Amargo has some of the highest
TOC content within the Neuquen basin, and based on core data on the
block, the lower Vaca Muerta at CAS X-5 is expected to have
approximately 7% porosity.
With recent Joint Venture partnerships being
announced near the Coiron Amargo block by both Chevron and Bridas
(on YPF held acreage) for an estimated U.S. $1.0 - $1.5 billion to earn various working
interests in the Vaca Muerta shale, Madalena is focused on
continuing to delineate and prove-up this significant resource at
Coiron Amargo. Madalena is also actively working to move forward on
its other two blocks within the Neuquen basin at Cortadera (40%
W.I.) and Curamhuele (90% W.I.).
Western Canada Operations Update - Greater
Paddle River Core Area
With the focus on production growth from its
three key resource plays in the Greater Paddle River Area,
Madalena continues to move forward on its plan to drill,
multi-stage frac and tie-in four to five net horizontal wells prior
to spring break-up.
At Paddle River, the Company is currently
drilling the 100% W.I. 8-5 Ostracod oil horizontal well.
Once drilling is completed at this location and a production liner
is run, the drilling rig will move to a follow-up Ostracod oil
horizontal location (Madalena 100% W.I.) to continue to exploit its
54 net sections on this resource play.
In the Wildwood area, Madalena is preparing to
complete its recently drilled 100% W.I. 15-12 Nordegg liquids-rich horizontal well
(estimated at over 100 bbls/mmcf). It is anticipated that a
multi-stage frac program will be undertaken on the well within the
next two weeks and subsequently tested and tied-in to Madalena's
local infrastructure. The Company plans, weather permitting, to
drill an additional 100% W.I. Nordegg liquids-rich horizontal well prior to
spring break-up. Madalena has 144 net sections on the
Nordegg oil & liquids-rich
resource play.
At Niton, the Company is also currently
constructing wellsite facilities to enable its recently drilled
100% W.I. 6-27 Notikewin horizontal well to be placed on
production by mid-February. The well was completed with a
multi-stage frac and was flow tested as disclosed in a January 17, 2013 press release.
Corporate Update
Mr. Anthony
Potter has resigned from his positions of Vice-President,
Chief Financial Officer effective February
28, 2013 and as Director of Madalena and its subsidiaries
effective immediately. The Board of Directors and Management of
Madalena wish to thank Mr. Potter for his tenure.
Mr. Thomas
Love, C.A., the former CFO and Director of Online Energy
Inc. ("Online") has been providing consulting services since the
acquisition of Online, and go-forward, will continue to be
available to assist the Company during and after the transition
period. Mr. Love has over 35 years of experience in the oil
and gas industry, including both Western Canadian and International
experience. Prior to his role at Online, he was the CFO of Trimox
Energy Inc. and Moxie Exploration Ltd., and President and Chief
Executive Officer of Moxie Petroleum Ltd. Earlier in Mr.
Love's career, he was involved in running the Canadian operations
of a U.K. based International E&P and articled at Ernst &
Young LLP.
Layering in Gas Hedges on Base
Production
As at February 4th,
2013, Madalena has the following natural gas commodity fixed
price risk management contracts in place for 2013.
Product |
Term |
Volume |
Average Price |
Natural Gas |
Apr. 1, 2013 to Oct. 31, 2013 |
300 GJ/d |
$3.00 CDN/GJ |
Natural Gas |
Apr. 1, 2013 to Oct. 31, 2013 |
300 GJ/d |
$4.47 CDN/GJ |
The natural gas fixed price swap of 300 GJ/d at
a price of CDN$4.47/GJ was enhanced
and received a premium price in 2013 by placing a call on 50 bbl/d
at US$100 for the calendar year
2014.
As at February 4th,
2013, the details of the above commodity price risk
management arrangements are as follows:
Type |
Period |
Volume |
Price
Floor |
Price
Ceiling |
Index |
Natural gas fixed |
April 1, 2013 to Oct. 31, 2013 |
300 GJ/d |
$3.00 CDN |
$3.00 CDN |
AECO |
Natural gas fixed |
April 1, 2013 to Oct. 31, 2013 |
300 GJ/d |
$4.47 CDN |
$4.47 CDN |
AECO |
Crude oil call options |
Jan. 1, 2014 to Dec. 31, 2014 |
50 bbl/d |
- |
$100.00 US |
WTI |
About Madalena - Domestic and International
Assets
Madalena is an independent, Canadian-based,
domestic and international upstream oil and gas company whose main
business activities include exploration, development and production
of crude oil, natural gas liquids and natural gas.
Domestically, Madalena holds a significant
acreage position in Western
Canada, with a core area of operations located in the
Greater Paddle River area, where the company holds 197 gross (153
net) sections of land (78% average W.I.) across multiple light oil
and liquids-rich gas resource plays. Madalena's focus domestically
is to exploit its large inventory of horizontal development
locations in its Ostracod oil, Notikewin/Wilrich liquids-rich gas,
and Nordegg oil & liquids-rich
resource plays. Madalena also holds ~103 net sections (100%
W.I.) which are prospective for the Duvernay shale.
Internationally, Madalena holds three large
blocks within the prolific Neuquén basin in Argentina and is focused on the delineation
and prove-up of its large petroleum in-place shale &
unconventional resources in the Vaca Muerta and Agrio shales,
alongside high impact plays in the Quintuco and Mulichinco
formations. Madalena holds 135,000 net acres across the
Coiron Amargo (35,027 net acres), Curamhuele (50,400 net acres) and
Cortadera (49,600 net acres) blocks.
Madalena trades on the TSX Venture Exchange
under the symbol MVN. Basic corporate information, recent
news releases and regularly updated corporate presentations are
available on the Company's website at
www.madalena-ventures.com.
Reader Advisories
The information in this news release contains
certain forward-looking statements. These statements relate to
future events or our future performance. 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 "seek", "anticipate", "plan", "continue",
"estimate", "approximate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe", "would" and similar expressions. In
particular, this news release contains forward-looking statements
pertaining to operational activities to be conducted by the
Company. These statements involve substantial known and unknown
risks and uncertainties, certain of which are beyond the Company's
control, including: the impact of general economic conditions;
industry conditions; changes in laws and regulations including the
adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced; fluctuations in commodity
prices and foreign exchange and interest rates; stock market
volatility and market valuations; volatility in market prices for
oil and natural gas; liabilities inherent in oil and natural gas
operations; uncertainties associated with estimating oil and
natural gas reserves; competition for, among other things, capital,
acquisitions, of reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; changes in
income tax laws or changes in tax laws and incentive programs
relating to the oil and gas industry; geological, technical,
drilling and processing problems and other difficulties in
producing petroleum reserves; and obtaining required approvals of
regulatory authorities. The Company's actual results, performance
or achievement could differ materially from those expressed in, or
implied by, such forward-looking statements and, accordingly, 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, what benefits the Company will derive from them. These
statements are subject to certain risks and uncertainties and may
be based on assumptions that could cause actual results to differ
materially from those anticipated or implied in the forward-looking
statements. The forward-looking statements in this news release are
expressly qualified in their entirety by this cautionary statement.
Except as required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statements. Investors
are encouraged to review and consider the additional risk factors
set forth in the Company's Annual Information Form, which is
available on SEDAR at www.sedar.com.
Any references in this news release to test
rates, flow rates, initial and/or final raw test or production
rates, early production and/or "flush" production rates are useful
in confirming the presence of hydrocarbons, however, such rates are
not necessarily indicative of long-term performance or of ultimate
recovery. Such rates may also include recovered "load" fluids used
in well completion stimulation. Readers are cautioned not to place
reliance on such rates in calculating the aggregate production for
Madalena. In addition, the Vaca Muerta shale is an unconventional
resource play which may be subject to high initial decline
rates.
All calculations converting natural gas to
barrels of oil equivalent ("boe") have been made using a conversion
ratio of six thousand cubic feet (six "Mcf") of natural gas to one
barrel of oil, unless otherwise stated. The use of boe may be
misleading, particularly if used in isolation, as the conversion
ratio of six Mcf of natural gas to one barrel of oil is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of
crude oil as compared to natural gas is significantly different
from the energy equivalency of 6:1, utilizing a conversion on a 6:1
basis may be misleading as an indication of value.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Analogous Information
Certain information in this document may constitute "analogous
information" as defined in National Instrument 51-101 - Standards
of Disclosure for Oil and Gas Activities ("NI 51-101"),
including, but not limited to, information relating to the areas in
geographical proximity to prospective lands held by Madalena and
production information related to wells that are believed to be on
trend with the Company's properties. Such information has
been obtained from government sources, regulatory agencies or other
industry participants. Management of Madalena believes the
information is relevant as it helps to define the reservoir
characteristics in which Madalena may hold an interest. Madalena is
unable to confirm that the analogous information was prepared by a
qualified reserves evaluator or auditor. Such information is not an
estimate of the reserves or resources attributable to lands held or
to be held by Madalena and there is no certainty that the reservoir
data and economics information for the lands held or to be held by
Madalena will be similar to the information presented herein. The
reader is cautioned that the data relied upon by Madalena may be in
error and/or may not be analogous to such lands to be held by
Madalena.
Total Organic Content ("TOC")
Any references in this news release to TOC levels is useful in
determining the presence of organic material and the likelihood of
the discovery of hydrocarbons, however, the presence of such levels
of TOC is not necessarily indicative of ultimate recovery, economic
or otherwise, of hydrocarbons. Readers are cautioned not to place
reliance on such levels in calculating the aggregate reserves or
resources for Madalena.
SOURCE Madalena Ventures Inc.