TSXV Trading Symbol: MVN
CALGARY, April 28, 2014 /CNW/ - Madalena Energy Inc.
(TSX-V: MVN and OTC: MDLNF) (the "Company" or "Madalena") is
pleased to announce the results of a multi-rate production test for
its CAN-15(h) horizontal well, which is the Company's second
horizontal well drilled on its international assets in the Neuquén
Basin in Argentina as well as a
production update and drilling program update on its assets in the
Neuquén Basin, Argentina:
International Update: Neuquén Basin, Argentina -Coiron Amargo Block
Sierras Blancas Test Results at CAN-15(h):
Second Horizontal Well of a Multi-well Program in 2014
The CAN-15(h) well was recently drilled
horizontally in the Sierras Blancas light oil reservoir in the
Coiron Amargo block to a total measured depth of 3,750 metres with
a horizontal lateral section of approximately 692 metres in
length. This well is the second horizontal well drilled into
the Sierras Blancas which is a conventional light oil reservoir
sourced from the Vaca Muerta shale across the Coiron Amargo
block. The 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-15(h) well flowed without artificial lift
equipment and was tested for approximately 75 hours at various
choke settings ranging from 6 mm to 12 mm in size with the
following flow rates observed during the test:
With the production test only being carried out
on a portion of the horizontal lateral section as planned, the
highest rates were achieved on a 12 mm choke setting, when the
CAN-15(h) well was flowed at a rate of 1,393 bbls/d of oil with
3,301 mcf/d of associated natural gas for a total of 1,943 Boe/d
(72% oil) over a 5 hour period and at an average flowing
pressure of approximately 1,263 psi.
On an 8mm choke setting, the CAN-15(h) well was
flowed at a rate of 745 bbls/d of oil with 1,990 mcf/d of
associated natural gas for a total of 1,077 Boe/d (69% oil)
over a 29 hour period and at an average flowing pressure of
approximately 1,629 psi.
During the test period of 75 hours, the total
gross produced cumulative volumes were approximately 2,553 barrels
of oil and approximately 7,210 mcf of natural gas, for a total of
approximately 3,754 barrels of oil equivalent (68% oil)
gross. No significant flowing pressure declines were observed
throughout the testing period and water cuts ranged from 0% to 3%
throughout the test period. Madalena has a 35% working
interest in the CAN-15(h) well.
Production Update at CAN.xr-2(h): First International
Horizontal Well Exceeding Expectations
The CAN.xr-2(h) well, which was Madalena's first
use of horizontal drilling technology internationally, was
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.
The CAN.xr-2(h) well has now been producing
since late 2013 and has exceeded management's expectations. The
well has been producing oil at restricted rates for most of Q1 -
2014.
Cumulative oil production for Q1-2014, based on
field estimates, was approximately 63,000 barrels of oil plus
associated solution gas. Average daily production was approximately
700 bbls/d and 1,560 mcf/d of associated solution gas for a total
of 978 boe/d (72% oil) over a three month period in
Q1-2014. The well has been recently tied into a permanent
pipeline system to the central plant and gas dehydration and
compressor facility and, accordingly, associated solution gas
volumes will be realized as sales in future quarters.
Madalena has a 35% working interest in the CAN.xr-2(h) well.
International Drilling Program
Update
The Company has an inventory of high impact
horizontal locations across the Coiron Amargo block (35,000 net
acres) and based on the horizontal results achieved to date is
moving forward with its planned multi-well horizontal program in
2014. A third horizontal well targeting the Sierras Blancas light
oil reservoir is expected to be drilled in Q2 into the same pool as
that developed with the CAN-15(h) well which is one of the largest
Sierras Blancas pools identified on the Coiron Amargo block to
date. After this third horizontal is executed in the field, one to
two additional horizontal wells targeting the Sierras Blancas light
oil play is expected to be drilled, completed and tied-in to
production facilities prior to year-end 2014.
Recently, the Company has intensified its focus
on the Vaca Muerta shale with a view to further unlocking the
unconventional resources across the block. The Coiron Amargo block
is strategically positioned within the Neuquén basin in the
shallower portion of the Vaca Muerta oil window and in an area
where over 150 Vaca Muerta shale wells have been drilled over the
last 12 to 14 months. Industry activity continues to increase
offsetting the Coiron Amargo block where Madalena drilled the
CAS.x-14 and the CAS.x-15 vertical wells in Coiron Amargo Sur
(South) for the Vaca Muerta shale in 2013. The CAS.x-14 and
CAS.x-15 wells were drilled and cased encountering approximately
105 and 114 metres respectively of Vaca Muerta shale on logs.
Completion (stimulation work and/or multi-stage frac) and testing
activities on these wells are expected to commence in Q2 -
2014.
About Madalena - International and Domestic Assets
Madalena is an independent, Canadian-based,
international and domestic 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 implementing
horizontal drilling and completions technology to high impact
international plays and is currently focused on 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 (approximately
78% average W.I.) encompassing multiple 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, Notikewin/Wilrich and other 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 test results, production from Madalena's properties and
anticipated operational initiatives. 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 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 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. While Madalena is very
encouraged by the initial results from the CAN-15(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.
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.
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 areas, assets, wells and/or operations that
are in geographical proximity to or believed to be on-trend with
lands held by Madalena. Such information has been obtained from
public sources, government sources, regulatory agencies or other
industry participants. Management of Madalena believes the
information may be relevant to help define the reservoir
characteristics in which Madalena may hold an interest and such
information has been presented to help demonstrate the basis for
Madalena's business plans and strategies.
However, such analogous information has not been
prepared in accordance with NI 51-101 and the Canadian Oil and Gas
Evaluation Handbook and Madalena is unable to confirm that the
analogous information was prepared by a qualified reserves
evaluator or auditor. Madalena has no way of verifying the
accuracy of such information. There is no certainty that the
results of the analogous information or inferred thereby will be
achieved by Madalena and such information should not be construed
as an estimate of future production levels or the actual
characteristics and quality of Madalena's assets. Such information
is also not an estimate of the reserves or resources attributable
to lands held or to be held by Madalena and there is no certainty
that such information will prove to be analogous in the future. 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.
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.