LONDON, April 14, 2015 /PRNewswire/ --
The first of four significant resource plays for small-cap
Canadian explorer Madalena has been described as a "sleeper" that
has now awakened, with successful horizontal well testing at Loma
Montosa in Argentina showing 860
barrels of oil equivalent per day.
On 8 April, Madalena Energy Inc. (TSXV: MVN and OCT:MDLNF)
announced the completion of testing at a horizontal well in the
Loma Montosa formation at Puesto Morales, which is only one of four
strategic resource plays in the company's ambitious Argentina portfolio.
The Loma Montosa well was drilled and cased to a total depth of
2,600 meters and a horizontal length of 1,095 meters, flowing a
total of 860 boe/d including 480 barrels of oil per day plus 2,300
mcf/d of gas. Over the last five days, 2,140 barrels of oil plus
gas volumes were produced here.
The Loma Montosa oil resource play is one of Madalena's high-impact
plays that with successful well testing for oil and gas flows
promised to be a game-changing play for the small-cap company,
which is the only junior left in Argentina's shale.
The company has also finished drilling and completion operations at
a fourth horizontal well in Argentina's Sierras Blancas at Coiron Amargo,
in which it has a 35% working interest. The well was drilled to a
total depth of 4,214 meters with a horizontal lateral section of
1,011 meters, and testing began on 15 March. The well was tied into
production facilities on 27 March at a total rate of 600 boe/d,
including 480 barrels of oil per day and 730 mcf/d of associated
gas.
But it is the Loma Montosa that everyone is eyeing right now.
Success here set the company up for a large, scalable in-place oil
play at Puesto Morales, and it is sure to attract the attention of
the major oil companies that already surround Madalena in
Argentina. And Madalena has 100%
working interest here.
At Loma Montosa, Madalena is using North American horizontal
multi-frac technology to increase recovery and improve the
economics of play, which internal geological mapping of 60 historic
vertical wells already shows a cumulative oil production of around
2.3 million barrels.
And this is only one of four Argentina plays for Madalena this year. The
other three include the prized Vaca Muerta shale and the Agrio
shale-both oil plays-and the liquids-rich gas play at
Mulichinco.
All told, Madalena holds over 950,000 net acres across five
provinces in Argentina, which is
poised be the venue for the next North American-style shale
boom.
Argentina is home to 27 billion
barrels of recoverable oil and 802 trillion cubic feet of natural
gas and its two shale basins could end up being bigger than
the Eagle Ford and Bakken. But adding to the
attraction is another significant aspect at a time of slumping oil
prices: For producers in Argentina, the price of natural gas and oil is
fixed at $7.5 per million British
Thermal Units (BTU) and $77 per
barrel respectively, well above international prices.
Not only is Argentina shaping up
to the be the next big-time shale venue, but Madalena's acreage is
right in the middle of massive unconventional exploration
activities of some of the world's biggest companies, including
ExxonMobil (NYSE: XOM), Royal Dutch Shell (NYSE:
RDS.A), Total (NYSE: TOT), Petronas,
Wintershall, Chevron (NYSE: CVX) and Argentina's state-owned YPF. All this
positioning and drilling activity has significantly de-risked the
Madalena resource plays, and makes it a target for takeover in
2015.
There has been talk of this company potentially doubling its share
price this year, even if it struck oil at only one of the four
strategy resource plays in Argentina-now with the Loma Montosa success,
this prediction is set to become a reality.
By. James Burgess of
Oilprice.com
SOURCE Oilprice.com