TSXV Trading Symbol: MVN
CALGARY, Dec. 27, 2013 /CNW/ - Madalena Energy Inc.
(TSX-V: MVN) (the "Company" or "Madalena") is pleased to announce
the results of a multi-rate production test for the CAN.xr-2(h)
horizontal well which is the Company's first horizontal well to be
drilled on its international assets:
International Update: Neuquén Basin, Argentina
Coiron Amargo Block (35% Working Interest)
- Sierras Blancas Test Results and Drilling Update
The CAN.xr-2(h) well was recently re-entered and
drilled horizontally in the Sierras Blancas light oil reservoir to
a total measured depth of 3,751 meters with a horizontal lateral
section of approximately 530 meters in length. This
horizontal well was subsequently cased and completed with a 3.5"
slotted liner and a multi-rate production test was carried out
through temporary production facilities. Throughout the
multi-rate production test, the CAN.xr-2(h) well flowed without
artificial lift equipment and was tested for approximately 142
hours at various choke settings ranging from 4 mm to 12 mm in size
with the following flow rates observed during the test:
The highest rates were achieved on a 12mm choke
setting, when the CAN.xr-2(h) well was flowed at a rate of
1,791 bbls/d of oil with 2,683 mcf/d of associated natural gas for
a total of 2,238 Boe/d (80% oil) over a three hour period
and at an average flowing pressure of approximately 1,304 psi.
On an 8mm choke setting, the CAN.xr-2(h)) well
was flowed at a rate of 912 bbls/d of oil with 1,364 mcf/d of
associated natural gas for a total of 1,139 Boe/d (80% oil)
over a 16 hour period and at an average flowing pressure of
approximately 1,433 psi.
During the test period of 142 hours, the total
produced cumulative volumes were approximately 2,736 barrels of oil
(38 degree API) and approximately 4,154 mscf of natural gas, for a
total of approximately 3,428 barrels of oil equivalent (80% oil).
No significant flowing pressure declines were observed throughout
any of the test rates and no water was produced throughout the test
period.
This well represents the first horizontal well
drilled into one of the six Sierras Blancas conventional light oil
pools discovered to date on the Coiron Amargo block. The
Company has an inventory of horizontal development locations
on the Coiron Amargo block and a second horizontal well targeting
the Sierras Blancas light oil reservoir (CAN-15(h)) is now
expected to spud in January 2014 once
the drilling operations are completed at CAS.x-15 (see below) and
the drilling rig is moved to the CAN-15(h) location. The
CAN-15(h) horizontal well will be drilled into one of the largest
Sierras Blancas pools on the block and targets a separate pool than
was drilled by the CAN.xr-2(h) horizontal well.
The Company is currently drilling a Vaca Muerta
shale delineation well at the CAS.x-15 location in the
southern portion of the Coiron Amargo block. Completion and testing
operations on this well and on a previously drilled nearby Vaca
Muerta shale well at the CAS.x-14 location are both expected
to be carried out as part of a multi-well completion and frac
program in 2014. The CAS.x-14 well was previously drilled and
cased with approximately 105 meters of Vaca Muerta shale on
logs.
While Madalena is very encouraged by the initial
results from the CAN.xr-2(h) horizontal well, the flowback
information disclosed above should be considered preliminary and is
not indicative of the well's long-term performance. Ongoing
technical work and operational enhancements are expected to
continue to improve the Company's understanding of the ultimate
potential of its Sierras Blancas horizontal oil play.
About Madalena - International and Domestic 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 large
blocks within the Neuquén basin in Argentina where it is focused on the
delineation of large petroleum in-place shale and unconventional
resources in the Vaca Muerta and Lower Agrio shales, in addition to
multiple tight sand plays. The Company is also developing a
conventional oil play in the Sierras Blancas formation. Madalena
holds approximately 132,200 net acres on the Coiron Amargo (34,951
net acres), Curamhuele (50,595 net acres) and Cortadera (46,656 net
acres) blocks.
Domestically, Madalena's core area of operations
is located in the Greater Paddle River area of west-central
Alberta where the Company holds
approximately 200 gross (>150 net) sections of land (78% average
W.I.) encompassing light oil and liquids-rich gas resource plays.
Madalena's primary domestic focus is to exploit its large inventory
of horizontal drilling locations on its Ostracod oil and emerging
Nordegg oil & liquids-rich gas
resource plays.
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-energy.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, in particular with respect
to the Company's reserves and production from its properties. 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.
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. In addition, the
Company's Ostracod project is a resource project, like many other
projects where operators deploy similar operational approaches to
those utilized by the Company, and may be subject to high initial
decline rates of production and pressure. Such production rates may
also include recovered "load" fluids used in well completion
stimulation. Readers are cautioned: (a) not to place reliance on
such rates in calculating the aggregate production for Madalena;
and (b) test or early production results are not necessarily
indicative of long-term performance or of ultimate recovery.
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.