Madalena Provides an Update on its Domestic and International Operations and Increases its Production Capability to Approximately 2,000 boe/d
TSXV Trading Symbol: MVN
CALGARY, April 15, 2013 /PRNewswire/ – Madalena Ventures Inc. (TSXV: MVN) (the
“Company” or “Madalena”) is pleased to provide operational updates
across its Western Canadian (“domestic”) and International assets.
With the focus on production growth to start 2013, Madalena’s productive
capability is approximately 2,000 boe/d (44% oil and natural gas
liquids (“NGLs”)), representing a 900% increase from the Company’s
October 2012 production level. The Company has a current base
production of approximately 1,200 boe/d (43% oil & NGLs) with in excess
of 1,200 boe/d of tested volumes behind pipe from recently completed
Ostracod horizontal development wells.
Western Canada Operations Update – Greater Paddle River Core Area
Horizontal Resource Play #1 - Ostracod light oil
At Paddle River, fracing and testing operations have been completed at
Madalena’s two recently drilled 100% working interest Ostracod
horizontal oil wells. The first well reached a total depth of 2,776
metres, including a 1,056 metre horizontal trajectory. Completion
operations included a 13-stage multi-frac program where a total of
6,094 barrels of water-based load fluid was pumped. The well was
subsequently production tested for three days during which time the
well flowed continuously and recovered a total of 4,633 barrels of load
fluid (76%). During the three day test, the well flowed 37° API oil and
gas at an average rate of 707 boe/d (39% oil). Flowing pressures
remained relatively stable at approximately 1,400 kPa during the final
24 hours of the test. After accounting for shrinkage and NGLs recovery
at the local production facility, sales production over the final 24
hours would equate to approximately 719 boe/d (46% oil & NGLs).
The second well reached a total depth of 2,880 metres, including a 1,140
metre horizontal trajectory. Completion operations included a 14-stage
multi-frac program where a total of 6,320 barrels of water-based load
fluid was pumped. The well was subsequently production tested for three
days during which time the well flowed continuously and recovered a
total of 2,430 barrels of load fluid (38%). During the three day test,
the well flowed 33° API oil and gas at an average rate of 566 boe/d
(24% oil). Flowing pressures remained relatively stable at
approximately 5,400 kPa during the final 24 hours of the test. After
accounting for shrinkage and NGLs recovery at the local production
facility, sales production over the final 24 hours would equate to
approximately 547 boe/d (38% oil & NGLs).
Both wells are currently shut-in and operations to equip them for
production and tie-in the solution gas to existing Madalena facilities
are ongoing. The Company anticipates that these two horizontal wells
will be brought on production during the second quarter of 2013.
While Madalena continues to be very encouraged by the initial results
from these horizontal wells, it cautions that these test results are
not indicative of their long-term performance. Ongoing technical work
continues to improve the Company’s understanding of its Paddle River
Ostracod oil play and the ultimate potential of the assets.
Madalena controls approximately 55 net sections of land and a
significant inventory of drill-ready horizontal locations on the
Ostracod oil trend in the Paddle River area. The Company plans to
drill additional horizontal wells on this play throughout the remainder
of 2013, focusing on increasing production and reserves.
Horizontal Resource Play #2 - Stacked Mannville Channel Trend
At Niton, the Company’s recently drilled and completed 100% working
interest Notikewin horizontal well was placed on production in Q1 2013.
Since early March, the well has produced at relatively stable rates of
approximately 400 boe/d (14% NGL’s). Madalena has 133 net sections of
land across its regional Mannville channel trends and has a significant
inventory of horizontal drilling locations focussed on the liquids-rich
Notikewin and Wilrich formations.
Horizontal Resource Play #3 – Nordegg oil & liquids-rich gas
In the Wildwood area, Madalena is continuing its evaluation of its
recently drilled and completed 100% working interest Nordegg horizontal
well. With the onset of spring break-up the Company has temporarily
shut-down operations on this location with plans to re-commence
evaluation operations as soon as road and lease conditions improve.
Madalena holds 144 net sections of Nordegg rights containing or
proximal to vertical well production which produces oil, and/or high
liquids-rich content gas.
International Operations Update – Neuquen Basin
In Argentina, Madalena has commenced its planned 2013 activity program
involving a combination of workovers, 3D seismic, new development
drilling, and exploration drilling focused on the Company’s
unconventional resources (in the Vaca Muerta shale and Lower Agrio shale), alongside conventional zones of interest.
In March, Madalena and its partners commenced the first of multiple
planned workovers for 2013 at its Coiron Amargo (35% W.I.) block to
optimize current field production. To begin the workover program,
Madalena conducted a successful cement squeeze, perforation and
fracture stimulation of its CAN X-3 well to enhance oil recoveries from
the Sierras Blancas light oil formation. Prior to the workover, CAN
X-3 was producing approximately 25 bbls/d of oil gross (9 bbls/d net).
After completing the workover, CAN X-3 was put back on stream in late
March and is currently producing approximately 115 bbls/d of oil gross
(40 bbls/d net). Additional workovers will be executed in 2013 to
optimize the existing field assets.
In early May, the Company anticipates commencing 3D seismic operations
to acquire up to 160 square kilometers of data in the south-west and
east-central areas of the Coiron Amargo block. This seismic data is
being acquired directly offsetting a horizontal multi-stage frac well
that was recently tested in the regional Vaca Muerta shale, resulting
in a new oil discovery by the operator of the block (a major integrated
Madalena and its partners at Coiron Amargo are currently working to
contract a rig for an upcoming drilling program involving multiple Vaca
Muerta shale wells in the southern part of the block and the Company’s
first horizontal Sierras Blancas (light oil) development well in the
north. Madalena expects to mobilize a drilling rig for this program
during the second quarter of 2013.
Madalena is also working to move forward activities on its other two
blocks within the Neuquen basin at both Cortadera (40% W.I.) and
Curamhuele (90% W.I.).
About Madalena – Domestic and International Assets
Madalena is an independent, Canadian-based, domestic and international
upstream oil and gas company whose main business activities include
exploration, development and production of crude oil, natural gas
liquids and natural gas.
Domestically, Madalena holds a significant acreage position in Western
Canada, with a core area of operations located in the Greater Paddle
River area, where the company holds approximately 200 gross (>150 net)
sections of land (78% average W.I.) across multiple light oil and
liquids-rich gas resource plays. Madalena’s focus domestically is to
exploit its large inventory of horizontal development locations in its
Ostracod oil, Notikewin/Wilrich liquids-rich gas, and Nordegg oil &
liquids-rich gas resource plays. Madalena also holds more than 100 net
sections (100% W.I.) which are prospective for the Duvernay shale.
Internationally, Madalena holds three large blocks within the prolific
NeuquÃ©n basin in Argentina and is focused on the delineation of its
large petroleum in-place shale & unconventional resources in the Vaca
Muerta and Agrio shales, alongside plays in the Quintuco, Mulichinco
and Sierras Blancas formations. 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.
Madalena trades on the TSX Venture Exchange under the symbol MVN. Basic
corporate information, recent news releases and regularly updated
corporate presentations are available on the Company’s website at www.madalena-ventures.com.
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.
Certain information in this document 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 the areas in
geographical proximity to prospective lands held by Madalena and
production information related to wells that are believed to be on
trend with the Company’s properties. Such information has been
obtained from government sources, regulatory agencies or other industry
participants. Management of Madalena believes the information is
relevant as it helps to define the reservoir characteristics in which
Madalena may hold an interest. Madalena is unable to confirm that the
analogous information was prepared by a qualified reserves evaluator or
auditor. Such information is not an estimate of the reserves or
resources attributable to lands held or to be held by Madalena and
there is no certainty that the reservoir data and economics information
for the lands held or to be held by Madalena will be similar to the
information presented herein. 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.
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.