TIDMMYN
RNS Number : 2090Z
Mayan Energy Limited
13 March 2017
13 March 2017
Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 /
Sector: Oil & Gas
Mayan Energy Ltd ("Mayan" or "the Company")
Operations update- Lutcher Moore ("LM") 13 Shallow Well
Perforation and Oklahoma Energy ("OKE") Production Update and First
Non-Core Asset Realisations
Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company,
further to the announcement of 21 February 2017, is pleased to
provide an update on its progress regarding the exploitation of the
new formation recently detected at Shoats Creek Field ("Shoats
Creek"), and progress in the revitalisation and monetization of its
OKE assets.
Shoats Creek
-- LM 13- Shallow Well: Owing to bad weather since last weekend,
planned work has been delayed. Weather and terrain conditions
permitting, the intention is to begin work in the week commencing
13 March 2017 to undertake a re-entry and squeeze with the
intention of isolating the pay formations identified at 2,600 and
2,900 feet. Once the cement job has been completed, the well will
be perforated and swabbed, first at the 2,900 level and if
necessary at the 2,600 level. Indications as to whether these
formations are oil bearing is expected to be determined during the
first two weeks of work on the well.
-- Once the new zone has been proved, further work will be
required to complete the well and install surface equipment, with
further announcements concerning economic viability and sustainable
production rates to be forthcoming in due course.
-- LM 20: The next stage of the rework of this well will follow
on from work on the LM13-Shallow well.
Mayan has a 50.00% WI and 37.7% net revenue interest ("NRI") in
the LM 13 Shallow Well formation. And has a 20.00% WI and 15.08%
NRI in LM 20 in respect of oil, and a 50.00% WI and 37.7% NRI in
respect of gas.
Oklahoma Energy ("OKE")
Since its RNS of 21 February 2017, a further two more wells have
been restarted such that the Company now has 13 wells operating and
is now producing 20 barrels oil per day ("bopd") up from the 18
bopd previously reported. This production comes from Mayan's Libby
and Tinker leases, which as a result of restructuring measures
introduced since the beginning of the year, have now been
reinstated as productive fields. Mayan presently has 100% WI and
NRI of 75% in these fields.
At the same time, the Company has now closed two transactions
which will generate nearly USD 150,000 from its portfolio of OKE
assets (which portfolio was until recently uneconomic to
Mayan).
-- Sale of Libby Lease: The Company has sold its Libby lease, in
Hominy, Oklahoma for US$ 150,000. The new owner, CMO LLC will pay
US$ 50,000 on taking over operations, with the balance of US$
100,000 payable once the assignments of the leases have been
approved and registered (likely to be 4 to 6 weeks from taking over
operations).
-- The new owner of the Libby Lease will also be taking on the
decommissioning liabilities associated with more than twenty other
defunct wells which are part of this field, which based upon
standard industry metrics could be as much as US$ 400,000 if they
were to have crystallised. Mayan had a 100% WI and a 75% NRI in
these leases.
-- Sale of Tinker Lease: The Company has sold its Tinker lease
for US$ 16,000, with the new owner taking on the decommissioning
liabilities associated with more than 25 other defunct wells which
are part of this field, which based upon standard industry metrics
could be as much as US$ 500,000 if they were to have crystallised.
Mayan had a 100% WI and a 75% NRI in these leases.
-- Liabilities to Blue Rock Capital, LLC ("Blue Rock) Following
the successful renegotiation of Royalty and Contingent Liability
settlement terms with Blue Rock which reduced Royalty Payments from
41% down to 5% and waived the overall Contingent liability from US$
1.5 Million in exchange for a 10% stake of sale proceeds up to US$
200,000 and a 50% share of proceeds in excess of US$ 200,000 (see
Company's RNS of 12 January 2017)-the Company expects Blue Rock
will receive US$ 16,000 from these two transactions.
Commenting on the above Eddie Gonzalez said: "I am disappointed
that we have been hit by bad weather in Louisiana- from time to
time access by heavy vehicles to Shoats is rendered almost
impossible by very heavy rain. Unfortunately, the weather means we
will have to wait another few weeks longer before we are in a
position to provide an update on our LM 13- Shallow well. None the
less, I am still of the view that our work will, if it is
successful, have a major bearing on our thoughts as to the further
development of Shoats.
At the same time, I am pleased that our work on our OKE assets
has begun to show some rewards. Our start position was not
favourable: our fields were uneconomic and hence not operating and
were therefore potentially threatened by significant
decommissioning liabilities.
By restructuring the operational obligation to Blue Rock, and
following this up with very modest investment, we have been able to
make the wells economic once again. From this position we have then
successfully closed two transactions. Once again, as a result of
the Blue Rock restructuring which we negotiated, the benefits of
these deals will largely accrue to the Company (as opposed to Blue
Rock). A further upside of the deals is that we have also de been
able to eliminate the risk and cost of decommissioning issues which
were connected to the fields, which we estimate could have been as
much as US$ 800,000.
Having dealt with the Libby and Tinker leases, we are now
working on the restructuring of our remaining Oklahoma assets, the
Horizon and Zinc Ranch leases (both of which are presently
uneconomic to Mayan) and we hope to be in a position to announce
progress on creating more value from these leases in due
course."
Qualified Person
The technical information that is contained in this announcement
has been reviewed by Mr. Kevin Green, a Consultant to the Company
and a Petroleum Geologist who is a suitably qualified person with
over 30 years' experience in assessing hydrocarbon reserves and who
has consented to the inclusion of the technical information.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
**ENDS**
For further information visit www.Mayan energy.com or contact
the following:
+ 1 469 394
Eddie Gonzalez Mayan Energy Ltd 2008
+44 7971 444
Charlie Wood Mayan Energy Ltd 326
Beaumont Cornish +44 20 7628
Roland Cornish Ltd 3396
Beaumont Cornish +44 20 7628
James Biddle Ltd 3396
Beaufort Securities +44 20 7382
Elliot Hance Ltd 8300
Cornhill Capital +44 20 7710
Nick Bealer Limited 9612
St Brides Partners +44 20 7236
Elisabeth Cowell Limited 1177
Notes:
Mayan Energy Limited is an AIM listed (London Stock Exchange)
oil and gas energy company; whose present operations which are
focussed on the redevelopment and enhancement of its upstream oil
and gas interests in Oklahoma and Louisiana.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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