TSXV Trading Symbol: MVN
CALGARY, Jan. 15, 2014 /CNW/ - Madalena Energy Inc.
(TSX-V: MVN) and (OTC: MDLNF) (the "Company" or "Madalena") is
pleased to provide the following operational updates:
International Update: Neuquén Basin, Argentina
Coiron Amargo Block (35% Working Interest)
- Sierras Blancas Horizontal & Vaca Muerta Shale 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. Details of the
initial 142 hour production test were outlined in a press release
issued on December 27, 2013. The
highest rates during that test period were achieved on a 12mm choke
setting, when the 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. In the 10 day period to
January 7, 2014, the well flowed on a
restricted 6 mm choke through temporary facilities. During this 10
day period, the well produced 6,033 bbls of oil and 10.7 mmscf of
associated gas for a total of 7,815 Boe (77% oil). No significant
flowing pressure declines have been observed to date and no water
has been produced. The well will continue to be produced at
restricted flow rates until permanent facilities are in-place which
is expected in February 2014.
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). 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.
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.
The Company has also recently reached a total
depth of 3,163 meters on the CAS.x-15 vertical well targeting the
Vaca Muerta shale. The CAS.x-15 well is located in the
southern portion of the Coiron Amargo block within the oil window
and the well has been cased with approximately 114 meters of Vaca
Muerta shale on logs. Completion and testing operations are now
planned for the first quarter of 2014 to evaluate this well.
The drilling rig which has just finished
drilling the CAS.x-15 well will now move to the CAN-15(h) lease
site to commence drilling operations on the Company's second
Sierras Blancas horizontal as outlined above.
Cortadera Block Update (37.8% Working
Interest) - Decree Signed with Re-Entry Planned for Q1
2014
On the Cortadera Block, 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. Following an application and
approval process, the first exploration period for Cortadera has
now been extended by way of an official decree signed by the
Province of Neuquén. This extension provides the partnership
until October 26, 2014 to satisfy the
remaining work commitments on the block which involves the upcoming
re-entry work (see below). Under the amended agreement, and
subsequent to conducting the upcoming re-entry work, the
partnership at Cortadera has the option to enter into subsequent
exploration periods involving a second exploration period extending
to October 25, 2018 and a third
exploration period extending to October 25,
2021, or extend the Cortadera block through potential
further evaluation and/or exploitation phases.
The decree stipulates that Gas y Petroleo del
Neuquén SA (the Neuquén provincial petroleum company) upwardly
revises its currently carried working interest in the block to 15%
from the previous 10%, resulting in a proportionate reduction of
Madalena's working interest in the block to 37.7778% compared to
its previous 40% working interest.
In the first quarter of 2014, Madalena and its
partner plan to re-enter the previously drilled CorS.x-1 Vaca
Muerta test well to evaluate an up hole zone of interest in the
wellbore.
Domestic Update: West-Central Alberta - Focused on Ostracod
Oil Development
In the greater Paddle River area, Madalena
drilled two additional (1.92 net) Ostracod horizontal wells in the
month of December. Both wells successfully encountered their
targeted oil zones and multi-port production liners were run in the
horizontal lateral sections. It is currently anticipated that these
two wells will be multi-stage fracture stimulated, tested and
potentially placed on production in the first quarter of 2014.
Following the completions and testing of the two
wells noted above and before the end of the first quarter of 2014,
Madalena anticipates drilling an additional horizontal well on its
Ostracod oil development project.
In 2013, the Company drilled five (4.92 net)
wells on the Ostracod project. Ongoing technical work and
operational enhancements continue to improve the Company's
understanding of the ultimate potential of this project. Madalena
has approximately 58 net sections of land on the Ostracod oil trend
and has a significant inventory of drill-ready horizontal locations
for continued development.
The Company has also recently completed its
evaluation of the Nordegg
horizontal well (100% working interest) at 15-12-55-9W5. Completion
and testing operations ultimately did not result in meaningful
hydrocarbon production and the wellbore has been suspended. The
technical information gained throughout the drilling, completion
and testing of this first horizontal well has furthered Madalena's
understanding of this emerging resource play and will be applied to
future operations. There were no reserves assigned to the 15-12
Nordegg horizontal in Madalena's
2012 year end reserves evaluation. The Company's Canadian
exploration and evaluation assets at December 31, 2013 have yet to be determined and
are expected to be adjusted accordingly, if required, in
conjunction with the preparation of the year-end financial
statements.
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
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.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, 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. While Madalena is
encouraged by the initial results from the CAN.xr-2(h) horizontal
well, the flow back information disclosed above should be
considered preliminary and is not indicative of the well's
long-term performance. 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.