(All dollar figures are expressed in
United States dollars unless
otherwise stated)
CALGARY, July 11, 2016 /CNW/ - Madalena Energy Inc.
("Madalena" or the "Company") (TSXV: MVN and OTCQX: MDLNF) is
pleased to announce that it has entered into definitive agreements
to effect positive ownership changes to the Company's Coirón Amargo
block, which will result in Madalena achieving two of the Company's
important goals in Argentina –
securing increased ownership and operatorship over one of the
Company's key assets and reducing near-term work commitments.
Highlights of the transactions, which were accomplished without
any cash consideration being paid by Madalena to any of the
counterparties, are as follows:
- increases Madalena's working interest ("WI") to 90% and
provides for the Company's operatorship of a large portion of the
evaluation concession in the south ("Coirón Amargo Sur");
- reduces the Company's near-term work commitments at Coirón
Amargo Sur; and
- Madalena's 35% WI is retained in the exploitation concession in
the north ("Coirón Amargo
Norte").
Summary of the Ownership Changes
Madalena currently holds a 35% WI in the entire Coirón Amargo
block. The block consists of an aggregate of approximately 100,000
gross acres (35,000 net) of Vaca Muerta and Sierras Blancas
prospective acreage. The Coirón Amargo
Norte exploitation concession consists of 26,598 gross acres
(9,309 net) and the Coirón Amargo
Sur evaluation concession consists of 72,738 acres (25,458
net).
Pursuant to a series of agreements dated July 11, 2016 involving Madalena, a subsidiary of
Royal Dutch Shell plc ("Shell"),
O&G Developments Ltd S.A. ("O&G"), ROCH S.A. ("Roch"), Apco Oil & Gas
International Inc. (Sucursal Argentina) ("Apco"), which is a
subsidiary of Pluspetrol Resources Corp. and Gas y Petróleo del
Neuquén S.A. ("G&P"), the parties have agreed, subject to
government approvals and an Executive Decree, to divide Coirón
Amargo Sur into two evaluation lots
– Coirón Amargo Sur Este and
Coirón Amargo Sur Oeste. Madalena will assign its
interest in Coirón Amargo Sur Oeste
(5,754 net acres) to its counterparties. In return, Madalena will
increase its WI to 90% at Coirón Amargo Sur
Este, increasing its net acreage by 30,964 to 50,668
acres and become operator on this parcel. G&P will retain its
10% WI.
At Coirón Amargo Norte, Madalena
will retain its 35% WI (9,309 net acres) and Apco will become the
operator.
Benefits
These transactions will enable the Company to control future
operations at Coirón Amargo Sur
Este, reduce near-term work commitments and provide more
flexibility in managing future commitments, all of which have been
accomplished without any cash consideration being paid by Madalena
to any of the counterparties. The previous work commitments at
Coirón Amargo Sur were $17.5 million, which were required to be incurred
by November 8, 2017. Pursuant to
the new arrangements, Madalena will have the following work
commitments at Coirón Amargo Sur
Este:
(1) $5 million before November 8, 2017 to evaluate either the Vaca
Muerta or tight gas commerciality; and
(2) an additional $5 million,
subject to the results in (1) above, before November 8, 2019.
The new evaluation permit for Coirón Amargo Sur Este will expire on November 8, 2019, following which Madalena will
be eligible to enter into an exploitation (development)
concession.
Prior to this transaction, Madalena participated in the drilling
of the following wells on what is now the Coirón Amargo Sur Este concession.
- The CAS.x-16 well was drilled and rig released in December 2014. It encountered 125 metres of Vaca
Muerta shale. The well was opened to flow unstimulated (no
acidization or fracture treatments) on a 2 mm choke at a pressure
of approximately 570 psi with an initial rate of 60 bopd light oil.
The well produced approximately 3,800 bbls over a 290 day test
period. The well has 7" casing set to the top of the Vaca Muerta,
making it suitable for a horizontal re-entry.
- The CAS.x-15 well was drilled in 2014 and encountered 114
metres of Vaca Muerta. The well had continuous oil flows during the
drilling operations. This well has 9 5/8" casing set to the top of
the Vaca Muerta and the Company is in the planning stages for a
horizontal re-entry with 10-15 hydraulic fractures.
- The CAS.x-14 well was drilled in 2013 and encountered 105
metres of Vaca Muerta. This well was never completed but has 7"
casing set to the top of the Vaca Muerta and is also suitable for a
horizontal re-entry.
About Madalena Energy
Madalena is an independent, Canadian-based, Argentina focused upstream oil and gas company
with operations in four provinces of Argentina where it is focused on the
delineation of unconventional resources in the Vaca Muerta shale,
Lower Agrio shale and Loma Montosa
oil plays. The Company is implementing horizontal drilling and
completions technology to develop both its conventional and
resource plays.
Madalena trades on the TSX Venture Exchange under the symbol MVN
and on the OTCQX under the symbol MDLNF.
An updated corporate presentation is available on the Company's
website.
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, matters related to the ownership changes
referred to herein and the expected results and benefits therefrom.
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. 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.
Boes
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.
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.