TSXV Trading Symbol: MVN
CALGARY, Nov. 28, 2013 /CNW/ - Madalena Energy Inc. (TSXV:
MVN) (the "Company" or "Madalena") is pleased to announce the
filing on SEDAR of the unaudited interim consolidated financial
statements and related Management's Discussion and Analysis
("MD&A") for the three and nine months ended September 30, 2013. Selected financial and
operational information is outlined below and should be read in
conjunction with Madalena's unaudited interim consolidated
financial statements and related MD&A which are available for
review under the Company's profile at www.sedar.com and on the
Company's website at www.madalena-energy.com.
SUMMARY FINANCIAL AND OPERATIONAL RESULTS
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Three months
ended
September 30 |
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Nine months
ended
September 30 |
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2013 |
2012 |
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2013 |
2012 |
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Financial - Canadian $000s, except per
share amounts |
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Oil and gas revenue |
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4,840 |
1,762 |
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12,327 |
2,533 |
Net loss |
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(118) |
(916) |
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(2,758) |
(3,932) |
Per share - basic and diluted |
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(0.00) |
(0.00) |
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(0.01) |
(0.01) |
Capital expenditures |
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7,146 |
3,633 |
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30,174 |
16,542 |
Working capital |
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8,924 |
58,752 |
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8,924 |
58,752 |
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Equity outstanding - 000s |
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Common shares |
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338,698 |
314,307 |
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338,698 |
314,307 |
Stock options |
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20,430 |
16,324 |
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20,430 |
16,322 |
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Operating |
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Average Daily Production |
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Crude oil and condensate - Bbls/d |
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401 |
250 |
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338 |
121 |
Natural gas - Mcf/d |
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3,838 |
84 |
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3,340 |
28 |
NGLs - Bbls/d |
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137 |
- |
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129 |
- |
Total - boe
/d(1) |
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1,177 |
264 |
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1,024 |
125 |
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Average Sales Prices |
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Crude oil and condensate - $/Bbl |
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89.51 |
75.11 |
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83.01 |
75.66 |
Natural gas - $/Mcf |
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2.43 |
4.37 |
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3.05 |
4.37 |
NGLs - $/Bbl |
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54.54 |
- |
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53.33 |
- |
Total - $/boe(1) |
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44.72 |
72.52 |
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44.11 |
73.81 |
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Operating Netbacks(2) |
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$/boe(1) |
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14.82 |
35.15 |
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14.61 |
26.16 |
(1) |
"boe/d" means barrels of oil equivalent ("boe") per day.
Refer to - "Oil, Natural Gas Liquids and Natural Gas Conversions to
boe" in Advisory. |
(2) |
Operating netbacks is considered a non-GAAP term. Operating
netbacks are calculated by subtracting royalties, transportation,
and operating costs from revenues before other income. |
THIRD QUARTER 2013 HIGHLIGHTS AND OUTLOOK
- Q3 -2013 production averaged 1,177 boe/d (46% oil and liquids),
an increase of 345% from Q3 - 2012;
- Subsequent to Q3 - 2013, the Company's latest Ostracod
horizontal (100% W.I.) was brought on stream in early November,
2013. During its initial 24 operating days of production, the
average rate of this horizontal well was approximately 606 boe/d
(84% oil & NGLs);
- Closed a $7.25 million equity
financing in early July, 2013;
- Exited the third quarter with positive working capital of
$8.9 million and unutilized credit
facilities of $13 million;
- On November 14, 2013 announced an
$11 million financing through an
$8 million bought deal and concurrent
$3 million private placement.
The private placement closed on November 21,
2013 and the bought deal is scheduled to close on or about
December 3, 2013; and
- On November 28, 2013 Madalena
increased its 2013 capital budget to $42
million. The increased budget will be primarily allocated to
the Company's Ostracod oil project.
International Operations - Neuquen Basin, Argentina
Coiron Amargo Block
- The exploration period for Coiron Amargo Sur (southern portion
of the block) was extended until November 8,
2014 by way of an official decree signed by the Province of
Neuquén in Argentina on
November 12, 2013. Coiron Amargo
Norte (northern portion of the block) is currently under a 25 year
exploitation (development) concession;
- The CAS.x-14 vertical well in the southern portion of the
Coiron Amargo block was drilled and cased encountering
approximately 105 meters of Vaca Muerta shale on logs.
Completion activities on this well are expected to commence as part
of a two-well completion program after the CAS.x-15 well is drilled
in the fourth quarter of 2013;
- The CAN.xr-2(h) well was re-entered and is currently being
drilled and completed horizontally in the Sierras Blancas light oil
reservoir. This well represents the first horizontal well drilled
into one of the six Sierras Blancas conventional light oil pools
discovered on the block to date; and
- Two 3D seismic programs were shot at Coiron Amargo Sur during
the second quarter and were subsequently processed in the third
quarter of 2013. The Coiron Amargo block (both north and south
regions) is now almost entirely covered with 3D seismic.
Curamhuele Block
- The Company continues to examine opportunities in respect of a
possible a joint venture or other transaction with respect to its
90% Curamhuele block in the Neuquén basin in Argentina. RBC Capital Markets ("RBC"),
Madalena's exclusive advisor related to its Neuquen basin assets,
is in communication with a broad spectrum of parties to solicit
interest in a joint venture or other transaction with the Company.
The Company cautions that there are no assurances that an
acceptable joint venture arrangement or other transaction will be
reached.
- Madalena is currently planning to shoot a 75 km2 3D
seismic survey at Curamhuele during the first quarter of 2014. The
Company plans to merge this newly acquired data with the existing
125 km2 3D survey on the block. This will provide
3D seismic coverage on the entire northern portion of the
Curamhuele block.
Cortadera Block
- On the Cortadera Block in the Province of Neuquén, the joint
venture signed an amended contract agreement on September 24, 2013 to formalize a multi-year
agreement for the extension of the initial exploration period and
inclusion of subsequent exploration periods.
- The Company plans to re-enter the CorS.x-1 well to conduct
re-entry work to evaluate an uphole zone of interest in the
wellbore. Re-entry operations at CorS.x-1 are planned to commence
in late Q4, 2013 or during the first quarter of 2014.
Domestic Operations - Greater Paddle River Area,
Alberta,
Canada
- Drilled, completed and tied-in a 100% working interest ("W.I.")
horizontal Ostracod oil well at 1-32-55-7W5M in the Paddle River
area of west-central Alberta. This
well commenced production in early November, 2013. During its
initial 24 operating days of production the well flowed at an
average rate of 476 bbls/d of 30° API oil and 838 mscf/d of raw
natural gas for a total of 616 boe/d (77% oil). After accounting
for shrinkage and NGLs recovery at the local production facility,
the average rate over the initial 24 operating days would equate to
approximately 606 boe/d (84% oil & NGLs). This well was drilled
to a total depth of 3,250 metres with a horizontal length of 1,380
metres and was completed with a 16 stage multi-frac program.
- In support of the Company's plan to recommence drilling
operations in the greater Paddle River area in Q4 2013, Madalena
conducted upfront survey, permitting and in some cases road and
lease preparation work associated with additional horizontal
development locations on the Company's multiple resource
plays.
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.
Internationally, Madalena holds three blocks
within the Neuquén basin in Argentina comprised of approximately 135,000
net acres consisting of the Coiron Amargo block (approximately
35,000 net acres), the Curamhuele block (approximately 50,500 net
acres) and the Cortadera block (approximately 49,500 net
acres).
Domestically, Madalena's core area of operations
is located in the Greater Paddle River area of west-central
Alberta, where the Corporation
holds approximately 200 gross (155 net) sections of land (78%
average working interest).
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.madalenaenergy.com.
Reader Advisories
Forward Looking Information
The information in this news release contains
certain forward-looking statements. These statements relate to
future events or our future performance, including, without
limitation, with respect to the expected timing of closing for
certain financings, expected operational activities, including
drilling, completion, re-entry, evaluation and seismic activities,
and the timing thereof and matters pertaining to Madalena's efforts
to seek a joint venture partner for certain assets. 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 planned
operational activities to be conducted by the Company. In addition,
statements relating to "reserves" or "resources" are deemed to be
forward-looking statements as they involve the implied assessment,
based on certain estimates and assumptions, that the reserves and
resources described exist in the quantities predicted or estimated
and can be profitably produced in the future. 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
Reserves and Other Oil and Gas
Disclosure
Any references in this news release to test
rates, flow rates, initial and/or final raw test or production
rates, early production, test volumes behind pipe 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.
SOURCE Madalena Energy Inc.