TSXV Trading Symbol: MVN
OTC Trading Symbol:
MDLNF
CALGARY,
Nov. 4, 2014 /CNW/ -
Madalena Energy Inc. ("Madalena" or the "Company")
(TSXV: MVN and OTC: MDLNF) is pleased to provide the
following operational update.
KEY HIGHLIGHTS:
CANADA
- Successfully drilled and completed a new horizontal oil and gas
exploration discovery (100% WI) in the Nordegg formation on Madalena's Western
Canadian assets. This new discovery well flowed continuously
up 7 inch casing and ended its initial clean-up period flowing at a
rate of 718 Boe/d (51% Oil).
ARGENTINA
- Madalena drilled, completed and placed on production its third
Sierras Blancas light oil horizontal (CAN-18(h)) after successfully
targeting a third separate oil pool on its Coiron Amargo block (35%
WI). The CAN-18(h) horizontal was initially placed on production
through permanent facilities at a total of 910 Boe/d (83%
oil);
- Drilling of a fourth Sierras Blancas light oil horizontal is
expected to commence in late November
2014;
- The Company has commenced drilling a Vaca Muerta shale
delineation well at its CAS-x-16 location in the Neuquen basin and
plans to complete and subsequently conduct testing and evaluation
operations on two Vaca Muerta shale wells at both the CAS-x-16 and
the previously drilled CAS-x-15 locations; and
- Madalena has secured two additional drilling rigs for its
Puesto Morales and Curamhuele blocks in Argentina where it plans to drill a horizontal
well on its Loma Montosa oil resource play and evaluate its Agrio
shale and Mulichinco unconventional plays.
DOMESTIC OPERATIONS UPDATE – WESTERN CANADA
Nordegg Horizontal Play– New Oil & Gas Exploration
Discovery
Madalena has made a new oil and gas discovery (100% WI) in the
Nordegg formation through the
drilling, casing and stimulation of an exploratory well. The well
was drilled horizontally in the Nordegg formation to a total measured depth of
2,533 metres, with a horizontal lateral section of approximately
830 metres in length. The well was subsequently completed,
stimulated and flowed-back on clean-up for 67 hours.
During the 67 hour clean-up period the well flowed continuously
up 7 inch casing at an average rate of 396 bbls/d of oil and 1.6
MMscf/d of natural gas for a total of 663 Boe/d (60%
Oil). During the final 24 hours of the clean-up period
the well flowed at an average rate of 367 bbls/d of oil and 2.1
MMscf/d of natural gas for a total of 718 Boe/d (51%
Oil). During the total 67 hour clean-up period the well
recovered a total of 1,100 Bbls of 30.5⁰ API oil, 4.5 MMcf of
natural gas and 1,416 barrels of water.
This exploration well was drilled and stimulated for an
estimated cost of CDN $2.3 million
and is currently being prepared for an extended flow test.
Madalena holds over 140 net sections of Nordegg rights across its land base in the
greater Paddle River area and has an inventory of potential
horizontal drilling locations.
Additionally, Madalena has drilled and cased two Ostracod
horizontal wells (100% WI) offsetting its Paddle River Ostracod oil
pool. As these wells were drilled from the same surface pad
field operations are being staged. Completion operations are
currently ongoing.
INTERNATIONAL OPERATIONS UPDATE - ARGENTINA
Coiron Amargo (35% WI) Block - Sierras Blancas Horizontal
Exploitation & Vaca Muerta Shale Delineation
Madalena's third Sierras Blancas horizontal (CAN-18(h)) was
recently drilled and completed in Argentina and was placed on production on
October 18, 2014.
The CAN-18(h) well was drilled horizontally in the Sierras
Blancas light oil reservoir to a total measured depth of 3,642
metres with a horizontal lateral section of approximately 450
metres in length. This horizontal well was subsequently cased
and completed with a 3.5" slotted liner and for operational
efficiencies was immediately placed on production through permanent
facilities.
The CAN-18(h) well is flowing without artificial lift equipment
and has been on production for approximately 12 days at choke
settings ranging from 6 mm to 8mm in size with the following
production rates observed to date:
- The highest production rate was on a 8 mm choke setting, when
the CAN-18(h) well produced at approximately 755 bbls/d of oil with
930 mcf/d of associated natural gas for a total of 910 Boe/d
(83% oil) at an average flowing pressure of approximately 990
psi over the initial 24 hour period.
- On a 6mm choke setting, the CAN-18(h) well has produced at an
average rate of 342 bbls/d of oil with 566 mcf/d of associated
natural gas for a total of 436 Boe/d (78% oil) over a 7 day
period and at an average flowing pressure of approximately 901 psi.
Water cuts have ranged from 5 to 17%.
The CAN18(h) well is the third horizontal well drilled into a
third separate pool 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 fourth horizontal well targeting the
Sierras Blancas light oil reservoir (CAN-16(h)) is now
expected to spud in late November
2014 once the drilling operations are completed at CAS.x-16
(see below) and the drilling rig is moved to the CAN-16(h)
location.
With the Coiron Amargo block located within the oil window of
the Vaca Muerta shale, the Company is currently drilling a Vaca
Muerta shale delineation well at the CAS.x-16 location in the
southern portion of the Coiron Amargo block. Completion and testing
operations on this well and a previously drilled Vaca Muerta shale
well at the CAS.x-15 location are both expected to be carried out
as part of a multi-well completion program in late 2014 and early
2015. The CAS.x-15 well was previously drilled and cased
after encountering approximately 114 metres of Vaca Muerta
shale.
Puesto Morales (100% WI) Field – Workover Program
Optimizing Production & Drilling Rig Secured for Horizontal
Drilling of Loma Montosa Oil Resource Play
Madalena has completed a four well recompletion program in the
Loma Montosa formation at Puesto Morales. The recompletions
focused on zones which had been successfully recompleted in other
wells within the field. Three of the four wells have been
placed on production and the fourth well is expected to soon be
on-stream. Results of the program are expected to offset natural
field declines as planned.
A multi-well horizontal drilling program in the Loma Montosa oil
resource play is planned for 2015 in the Puesto Morales field. A
drilling rig has been contracted and it is expected that the first
well will commence drilling in December
2014 or January 2015.
Curamhuele (90% WI) Block – Drilling Rig Secured for Agrio
Shale & Mulichinco Appraisal Program
Madalena and its partner Gas Y Petroleo (GyP, the Provincial Oil
company) have secured a drilling rig for the re-entry, sidetrack
and completion (frac and test) of the CH-x-1 well targeting the
Agrio shale and the deepening of the YP-x-1001 well to frac and
test the Mulichinco liquids-rich gas resource play.
Regulatory approvals have been received and the Company anticipates
commencing operations in Q1 2015. Madalena's Curamhuele block is
within the oil window of the Agrio shale with an estimated
thickness of 225 metres and is directly offsetting a recently
announced Agrio shale discovery by the Argentina state company YPF. In addition
to the Agrio shale, the primary zones of interest on the Curamhuele
block are the unconventional Vaca Muerta shale and liquids rich
Mulichinco sands. The block is also prospective for other
conventional reservoirs.
El Vinalar (100% WI) Block – Evaluation
Underway
The Company recently re-entered the LR.x-1 vertical well on the
El Vinalar block to retest an oil discovery in the Yacoraite zone
of interest. Madalena's re-entry and testing program for the
LR.x-1 was designed to evaluate the potential to stimulate the well
and subsequently place it on production. Pressure recorders were
run and have been recovered. The ongoing evaluation of pressure
data is expected to determine if a stimulation program is
warranted. If so, those operations will be planned for 2015 and
with successful results, multiple additional opportunities exist
and may be pursued on the block.
While Madalena is encouraged by the initial results from the
Nordegg exploratory well in
Canada and the CAN-18h Sierras
Blancas horizontal in Argentina,
the initial flowback information disclosed above should be
considered preliminary and is not necessarily indicative of the
long-term performance of these wells. Ongoing technical work is
expected to improve the Company's understanding of the ultimate
potential of the Nordegg
horizontal play and the ongoing horizontal development in the
Sierras Blancas.
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 interests in 14 large land
blocks within five provinces in Argentina where it is focused on the
delineation of large petroleum in-place shale and unconventional
resources in the Vaca Muerta and Agrio shales and in multiple tight
sand plays. As part of its balanced business strategy, the Company
is also focused on implementing horizontal drilling and completions
technology to develop high impact resource plays and conventional
oil & gas projects.
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 79% average
W.I.) encompassing light oil and liquids-rich gas resource plays.
Madalena's primary domestic focus is to exploit its inventory of
horizontal drilling locations across the Nordegg, Ostracod and other oil and
liquids-rich gas resource plays.
Madalena trades on the TSX Venture Exchange under the symbol MVN
and on the OTC under the symbol MDLNF.
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, but not limited
to, with respect to the characteristics of the properties held by
the Company, current and future production levels, the strategic
value and opportunities available to Madalena, capital expenditure,
operational and business development plans and the ability of
Madalena to execute on such plans. 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.
Meaning of Boe
The term "boe" or barrels of oil equivalent may be
misleading, particularly if used in isolation. A boe conversion
ratio of six thousand cubic feet of natural gas to one barrel of
oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. Additionally,
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 ratio of 6:1 may
be misleading as an indication of value.
Analogous Information
Certain information in this news release 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 within lands on which
Madalena holds an interest and such information has been presented
to help demonstrate the basis for Madalena's business plans and
strategies. However, management cannot confirm whether such
analogous information has 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 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.
Initial Production Rates
Any references in this document 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. Such rates may be estimated
based on other third party estimates or limited data available at
this time and are not determinative of the rates at which such
wells will continue production and decline thereafter.
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.