Madalena Ramps Up Domestic Drilling Operations with Two Rigs
Focused on Three Horizontal Resource Plays & Production Growth;
Internationally, Drilling Moves Ahead to Delineate the Vaca Muerta
Shale as One of Three Shale Plays Across its Blocks
TSXV Trading Symbol: MVN
CALGARY,
Dec. 6, 2012 /PRNewswire/ - Madalena
Ventures Inc. ("Madalena") (TSX-V: MVN), an international
and Canadian ("domestic") focused upstream oil and gas company is
pleased to provide the following operational update.
Canadian Operations Update - Greater
Paddle River Core Area:
Madalena has moved two drilling rigs into its
core area of operations located in the Greater Paddle River
Area of Central Alberta, where
the company holds a significant acreage position of 197 gross (153
net) sections of land (78% average working interest and largely
operated by Madalena) across multiple light oil and liquids-rich
gas resource plays. Madalena's focus domestically is to
exploit its large inventory of horizontal development locations
with the expectation to increase production and cash flow year over
year.
The plan between now and spring break-up is to
drill, multi-stage frac, equip and place on production four to five
gross (4.0 to 4.2 net) horizontals focused across three key
resource plays. To increase production and reserves, the
focus throughout 2013 will be to drill horizontals targeting: 1.)
Ostracod oil, 2.) Notikewin / Falher / Wilrich liquids-rich gas stacked
development plays, and 3.) Nordegg oil & liquids-rich gas
Horizontal Resource Play #1 focuses on
Ostracod light oil and is highlighted by a 54 net section
position on the play and over 50 already identified, drill ready,
horizontal locations. Madalena's most recent Ostracod
horizontal (Paddle River 01-05) which was put on-stream in
mid-October 2012 is currently
exceeding the company's expectations with this horizontal
continuing to flow without the assistance of pumping
equipment. In July 2012 the
well tested at an average rate of 438 boe/d (73% oil & liquids)
over a three-day period following a fourteen stage frac
completion. The IP 30 day average rate on this horizontal was
307 boe/d (65% oil & liquids).
Horizontal Resource Play #2 focuses on
the low-risk development of Madalana's regionally stacked
Mannville channel trend
highlighted by 133 net sections with liquids-rich Notikewin /
Falher / Wilrich stacked
development plays, vertical well production or control
throughout, already in place underutilized pipeline &
infrastructure in the area, with liquid contents in the range of 28
to 35 bbls/mmcf, and significant running room for horizontal
development.
Horizontal Resource Play #3 which is
expected to be drilled, multi-stage frac'd and tested in the
near-term involves an emerging oil & liquids-rich
Nordegg play. Madalena
has 144 net sections of Nordegg
rights, containing or proximal to vertical well production which
produces oil, and/or high liquids-rich content gas of over 100
bbls/mmcf. Madalena plans to utilize North American
horizontal technology to test this emerging resource play which is
widespread across its sizeable land position.
International Operations Update - Neuquén
Basin
Madalena, which holds three large blocks (or
concessions) within the prolific Neuquén basin in Argentina, continues to move forward to
delineate its large in-place oil & gas unconventional resources
with shale positions in the Vaca Muerta, Agrio and
Los Molles shales. Madalena holds 135,000 net acres
across the Coiron Amargo (35,027 net acres), Curamhuele (50,400 net
acres) and Cortadera (49,600 net acres) blocks.
On the Coiron Amargo Block (35% working
interest), the CAN 8 development well located 800 meters south east
of the CAN 7 well is drilling ahead at approximately 7,824 feet to
a planned target depth of approximately 10,430 feet. The objectives
for the CAN 8 well are both the conventional light oil in the
Sierras Blancas formation as well as to further delineate and
assess the Vaca Muerta shale on the block. Offset to CAN 8,
production from the CAN-7 Sierras Blancas alone has now reached
over 60,000 bbls since coming on stream in July this year and
continues to flow at over 300 bopd gross with associated gas.
At the end of November, Argentina announced plans to increase gas
prices to $7.50/mmbtu for new gas
developments. With import prices significantly above this, gas
related drilling activity in the country will contribute to reduced
gas imports while receiving a substantially higher price than
obtained previously. All three of Madalena's Blocks have the
potential to benefit in the future from this recent announcement
via the contribution of new gas production from both conventional
zones of interest and the large-in-place unconventional shale
resources.
Corporate Update - Newly Focused Team,
Production Update and Balance Sheet Strength
With a full cycle corporate, technical and
operational team now in place, Madalena is well positioned with
expertise to operate assets both domestically & internationally
and is focused on delivering results in 2013 onward. Madalena's
current corporate production is approximately 950 boe/d net (60 %
oil and liquids) including an estimated 650 boe/d net (51% oil and
liquids) from its domestic assets and 300 boe/d net (81 % oil and
liquids) from its international assets. Madalena continues to
have a strong balance sheet for go-forward growth, with
approximately $36 million in positive
working capital, zero debt and an undrawn initial $4.75 million bank facility with a major Canadian
bank.
Reader Advisories
The information in this news release contains
certain forward-looking statements. These statements relate to
future events or our future performance. 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.
Any references in this news release to test
rates, flow rates, initial and/or final raw test or production
rates, early production 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.
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 Ventures Inc.