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Madalena Announces New Oil & Gas Discovery, Continued Drilling Success in Argentina and Vaca Muerta Shale Drilling Update

Madalena has made a new oil and gas discovery (100% WI) in the Nordegg formation through the drilling, casing and stimulation of an exploratory well. The well was drilled horizontally in the Nordegg formation to a total measured depth of 2,533 metres, with a horizontal lateral section of approximately 830 metres in length. The well was subsequently completed, stimulated and flowed-back on clean-up for 67 hours.

During the 67 hour clean-up period the well flowed continuously up 7 inch casing at an average rate of 396 bbls/d of oil and 1.6 MMscf/d of natural gas for a total of 663 Boe/d (60% Oil). During the final 24 hours of the clean-up period the well flowed at an average rate of 367 bbls/d of oil and 2.1 MMscf/d of natural gas for a total of 718 Boe/d (51% Oil). During the total 67 hour clean-up period the well recovered a total of 1,100 Bbls of 30.5? API oil, 4.5 MMcf of natural gas and 1,416 barrels of water.

This exploration well was drilled and stimulated for an estimated cost of CDN $2.3 million and is currently being prepared for an extended flow test.

Madalena holds over 140 net sections of Nordegg rights across its land base in the greater Paddle River area and has an inventory of potential horizontal drilling locations.

Additionally, Madalena has drilled and cased two Ostracod horizontal wells (100% WI) offsetting its Paddle River Ostracod oil pool. As these wells were drilled from the same surface pad field operations are being staged. Completion operations are currently ongoing.

INTERNATIONAL OPERATIONS UPDATE - ARGENTINA

Coiron Amargo (35% WI) Block - Sierras Blancas Horizontal Exploitation & Vaca Muerta Shale Delineation

Madalena's third Sierras Blancas horizontal (CAN-18(h)) was recently drilled and completed in Argentina and was placed on production on October 18, 2014.

The CAN-18(h) well was drilled horizontally in the Sierras Blancas light oil reservoir to a total measured depth of 3,642 metres with a horizontal lateral section of approximately 450 metres in length. This horizontal well was subsequently cased and completed with a 3.5" slotted liner and for operational efficiencies was immediately placed on production through permanent facilities.

The CAN-18(h) well is flowing without artificial lift equipment and has been on production for approximately 12 days at choke settings ranging from 6 mm to 8mm in size with the following production rates observed to date:

-- The highest production rate was on a 8 mm choke setting, when the CAN-18(h) well produced at approximately 755 bbls/d of oil with 930 mcf/d of associated natural gas for a total of 910 Boe/d (83% oil) at an average flowing pressure of approximately 990 psi over the initial 24 hour period. -- On a 6mm choke setting, the CAN-18(h) well has produced at an average rate of 342 bbls/d of oil with 566 mcf/d of associated natural gas for a total of 436 Boe/d (78% oil) over a 7 day period and at an average flowing pressure of approximately 901 psi. Water cuts have ranged from 5 to 17%.

The CAN18(h) well is the third horizontal well drilled into a third separate pool of the six Sierras Blancas conventional light oil pools discovered to date on the Coiron Amargo block. The Company has an inventory of horizontal development locations on the Coiron Amargo block and a fourth horizontal well targeting the Sierras Blancas light oil reservoir (CAN-16(h)) is now expected to spud in late November 2014 once the drilling operations are completed at CAS.x-16 (see below) and the drilling rig is moved to the CAN-16(h) location.

With the Coiron Amargo block located within the oil window of the Vaca Muerta shale, the Company is currently drilling a Vaca Muerta shale delineation well at the CAS.x-16 location in the southern portion of the Coiron Amargo block. Completion and testing operations on this well and a previously drilled Vaca Muerta shale well at the CAS.x-15 location are both expected to be carried out as part of a multi-well completion program in late 2014 and early 2015. The CAS.x-15 well was previously drilled and cased after encountering approximately 114 metres of Vaca Muerta shale.

Puesto Morales (100% WI) Field - Workover Program Optimizing Production & Drilling Rig Secured for Horizontal Drilling of Loma Montosa Oil Resource Play

Madalena has completed a four well recompletion program in the Loma Montosa formation at Puesto Morales. The recompletions focused on zones which had been successfully recompleted in other wells within the field. Three of the four wells have been placed on production and the fourth well is expected to soon be on-stream. Results of the program are expected to offset natural field declines as planned.

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Copyright:
http://www.marketwatch.com/story/madalena-announces-new-oil-gas-discovery-continued-drilling-success-in-argentina-and-vaca-muerta-shale-drilling-update-2014-11-04-7202450
Published on:
November 4, 2014
Source url:
http://www.marketwatch.com/story/madalena-announces-new-oil-gas-discovery-continued-drilling-success-in-argentina-and-vaca-muerta-shale-drilling-update-2014-11-04-7202450
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