CALGARY, March 5, 2014 /CNW/ - Caracal Energy Inc. ("Caracal" or the
"Company") (LSE:CRCL) is pleased to provide an update of exploration,
development and production operations in the Republic of Chad.
Current production increased to 14,200 gross barrels oil per day
("bopd"), from 12,000 bopd as reported on January 20, 2014;
Production at the Badila field is continuing from the original three
wells with a 15-20% water-cut, in line with expectations;
Badila-7 is currently drilling at 1,260 meters and Badila-9 is expected
to spud over the next 7 days. Both of these wells are expected to
provide additional production rate capacity;
Mangara-6 has been completed and testing of the Cretaceous E sands is
underway. The comprehensive completion program is also testing the
Cretaceous D and C sands. Mangara-6 is expected to be on production
later this year when the Mangara field is brought on stream;
Mangara-4 has been successfully side-tracked and cased as a Cretaceous E
The first of the four new drilling rigs contracted in 2014 has arrived
at the port in Cameroon, on schedule, and should be on site in Q2;
The 2014 exploration program is underway in the Kibea - Beche area,
where 3D seismic is nearing completion; and
The Company's first oil sales tanker lifting is now expected before the
end of March 2014.
Gary Guidry, Chief Executive Officer, said:
"We are making good progress maximizing throughput at our Badila
production facilities, and we are on schedule to expand the fluid
handling capacity at Badlia later this summer. In addition, we are
nearing completion of the production facilities at Mangara and the
pipeline connecting Mangara to Badila, and we are looking forward to
having the Mangara field on stream later this year.
An exciting milestone will be moving a drilling rig to the Kibea - Beche
area in the next two months, kicking off our 2014 high impact
exploration program where we plan to test approximately one billion
barrels in gross unrisked "Prospective Resources."1
With Badila-6 now on stream, current production is 14,200 bopd, up from
12,000 bopd in January and in line with the Company's expectations for
the period and the Company's guidance of 22,000 to 26,000 bopd annual
average 2014 production. Production from the Badila field has been
stable since the commissioning of the facilities was completed in
December 2013, with oil production, water production and well pressure
consistent with forecasts.
Badila processing capacity, previously constrained to 14,000 barrels of
fluid per day (bfpd") has now been expanded to 25,000 bfpd with the
completion of the southern processing terminal ("SPT"). The SPT will
handle excess Badila production until expansion of the Badila
facilities is completed, which is expected during the third quarter of
2014. Water rates, relative to total fluid from the Badila field, are
stable between 15 and 20%, in line with expectations. Production from
the Badila field has been increasing since the commissioning of these
facilities was completed in December 2013.
Operations at Badila currently include the drilling of Badila-7 with rig
GWD-96, and preparations to spud Badila-9 with rig GWD-158. The GWD-158
rig is capable of deep drilling and once Badila-9 drilling is finished,
will be move it to the Kibea - Beche area for a continuous
spring/summer exploration drilling program. GWD-96 will continue in the
Badila field, drilling Badila wells for additional production rate
The Company's line fill contribution was completed in January 2014 and
additional production accumulated as inventory. The sale of the
Company's inaugural cargo from the Kribi sales terminal is committed,
with the lifting scheduled for the latter part of March 2014. Tanker
liftings are typically between 900,000 and 1,000,000 barrels of oil.
The Company will jointly lift with its partner, GlencoreXstrata
(therefore, approximately 560,000 barrels of oil will be net to the
Exploration and Development: Drilling Operations
The Company has commenced the mobilization process of an additional four
drilling rigs, which will bring the total rig count to six drilling
rigs by the end of 2014. In addition, two completion rigs will be
mobilized into country during 2014, to bring the total completion rig
count to three. One of these new completion rigs also has the ability
to drill medium depth wells.
The first of the four additional drilling rigs has arrived in the port
of Douala, Cameroon. It is scheduled to arrive in Chad and commence
drilling during the second quarter of 2014.
Bitanda: Exploration Well
The Company has plans to test the Bitanda exploration well in the coming
months. Currently, the workover/completions rig remains in Mangara,
testing and completing Mangara-6.
Kibea and Beche: Seismic Acquisition and Drilling
The Company has mobilized a seismic contractor to shoot 2D and 3D
seismic throughout its asset base in Chad. Much of the planned 1,500
line-kilometers of 2D seismic is completed and was focused on well
placement for structures to be drilled in the 2014-2016 exploration
programs as well as further evaluation of additional prospects
currently not included in the Company's estimates.
Of the 700 square kilometers ("Km2") planned for 2014, 450 Km2 will be focused on the Kibea discovery and nearby Beche exploration
area, which includes three prospects with similar structures to the
discovery at Kibea. Currently, the seismic has been shot over the Kibea
field and nearly competed over the Beche area. Preliminary processing
indicates that the seismic acquired is of excellent quality. The three
prospects in the Beche exploration area are assessed 420 million
barrels of Pmean unrisked gross recoverable Prospective Resource in
aggregate, according to the McDaniel Resource Report.1 Kibea is a light oil discovery (33 - 35 degrees API) with 45.9 million
barrels of gross 2P reserves, and 105.0 million barrels of gross 3P
reserves according to the McDaniel Reserves Report.2
The first well, Kibea-2, scheduled for the second quarter of 2014, in
the Kibea - Beche trend will be an appraisal and deep test on the Kibea
structure. The Kibea-2 well will provide a test of deep Cretaceous
potential identified on prior 2D well data acquired on Kibea-1 and the
new 3D seismic. According to the McDaniel Resource Report, gross
unrisked prospective resources below in the Kibea discovery are
40.1-76.9 million barrels on Pmean and P10 basis, respectively.1 In addition, oil samples to be acquired during testing of existing
discovered reservoirs in Kibea-2 will provide development and pipeline
design information. Drilling two of the three Beche exploration
prospects is expected to commence in Q3 2014, once Kibea-2 is tested.
About Caracal Energy Inc.
Caracal Energy Inc. is an international exploration and development
company focused on oil and gas exploration, development and production
activities in the Republic of Chad, Africa. In 2011, the Company
entered into three production sharing contracts ("PSCs") with the
government of the Republic of Chad. These PSCs provide exclusive rights
to explore and develop reserves and resources over a combined area of
26,103 km2 in southern Chad. The PSCs cover two world-class oil basins
with oil discoveries, and numerous exploration prospects.
The Company's shares trade on the London Stock Exchange under the symbol
This announcement contains certain forward-looking information and
statements. Forward-looking information typically contains statements
with words such as "intend", "target", "anticipate", "plan",
"estimate", "expect", "potential", "could", "will", or similar words
suggesting future outcomes. Information relating to reserves and
resources is deemed to be forward-looking information, as it involves
the implied assessment, based on certain estimates and assumptions,
that the reserves and resources described exist in the quantities
predicted or estimated, and can be profitably produced in the future.
The Company cautions readers not to place undue reliance on
forward-looking information which by its nature is based on current
expectations regarding future events that involve a number of
assumptions, inherent risks and uncertainties, which could cause actual
results to differ materially from those anticipated by the Company. In
addition, any forward-looking information is made as of the date
hereof, and each of the Company and its affiliates expressly disclaim
any obligation or undertaking to update, review or revise such
forward-looking information contained in this announcement to reflect
any change in its expectations or any change in events, conditions or
circumstances on which such information is based unless required to do
so by applicable law.
Forward-looking information is not based on historical facts but rather
on current expectations and assumptions regarding, among other things,
the timing and scope of certain of the Company's operations and the
timing and level of production from the Company's properties, plans for
and results of drilling activity and testing programmes, future capital
and other expenditures (including the amount, nature and sources of
funding thereof), continued political stability, and timely receipt of
any necessary government or regulatory approvals. Although the Company
believes the expectations and assumptions reflected in such
forward-looking information are reasonable, they may prove to be
incorrect. Forward-looking information involves significant known and
unknown risks and uncertainties. A number of factors could cause actual
results to differ materially from those anticipated by the Company
including, but not limited to, risks associated with the oil and gas
industry (e.g. operational risks in exploration and production;
inherent uncertainties in interpreting geological data; changes in
plans with respect to exploration or capital expenditures;
interruptions in operations together with any associated insurance
proceedings; reductions in production capacity, the uncertainty of
estimates and projections in relation to costs and expenses and health,
safety and environmental risks), the risk of commodity price and
foreign exchange rate fluctuations, the uncertainty associated with
negotiating with foreign governments, risk associated with
international activity, including the risk of political instability,
the risk of adverse economic market conditions, the actual results of
marketing activities and the risk of regulatory changes.
Forward-looking information cannot be relied upon as a guide to future
performance. Well-test results are not necessarily indicative of
long-term performance or ultimate recovery.
Terms related to reserves and resources classifications referred to in
this announcement are based on definitions and guidelines in the
Canadian Oil and Gas Evaluation Handbook which are as follows.
"Proved reserves" are those reserves that can be estimated with a high
degree of certainty to be recoverable. It is likely that the actual
remaining quantities recovered will exceed the estimated proved
"Probable reserves" are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than the
sum of the estimated proved plus probable reserves.
The qualitative certainty levels referred to in the definitions above
are applicable to individual reserves entities (which refers to the
lowest level at which reserves calculations are performed) and to
reported reserves (which refers to the highest-level sum of individual
entity estimates for which reserves estimates are presented). Reported
reserves should target the following levels of certainty under a
specific set of economic conditions:
at least a 90 percent probability that the quantities actually recovered
will equal or exceed the estimated proved reserves. This category of
reserves can also be denoted as 1P;
at least a 50 percent probability that the quantities actually recovered
will equal or exceed the sum of the estimated proved plus probable
reserves. This category of reserves can also be denoted as 2P; and
at least a 10 percent probability that the quantities actually recovered
will equal or exceed the sum of the estimated proved plus probable plus
possible reserves. This category of reserves can also be denoted as 3P.
Additional clarification of certainty levels associated with reserves
estimates and the effect of aggregation is provided in the COGE
Handbook. The estimates of reserves and future net revenue for
individual properties may not reflect the same confidence level as
estimates of reserves and future net revenue for all properties, due to
the effects of aggregation.
"Prospective resources" are those quantities of petroleum estimated, as
of a given date, to be potentially recoverable from undiscovered
accumulations by application of future development projects.
Prospective resources have both an associated chance of discovery
(geological chance of success) and a chance of development (economic,
regulatory, market, facility, corporate commitment or political risks).
The chance of commerciality is the product of these two risk
components. The prospective resource estimates referred to herein have
not been risked for either the chance of discovery or the chance of
There is no certainty that any portion of the prospective resources will
be discovered. If a discovery is made, there is no certainty that it
will be developed or, if it is developed, there is no certainty as to
the timing of such development or that it will be commercially viable
to produce any portion of the prospective resources.
Figures related to the Company's reserves and resources are derived
from the McDaniel Reserves Report and McDaniel Resources Report, each
as defined below.
A description of the uncertainties and significant positive and negative
factors associated with the estimates of resources in respect of the
June 30, 2013 McDaniel Report is contained in the Company's July 25,
2013 material change report. Copies of these documents are
available on the internet under the Company's profile at www.sedar.com.
1 Report prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"),
an independent qualified reserves evaluator, evaluating the prospective
resources of the Company effective as of June 30, 2013 (the "McDaniel
2 Report prepared by McDaniel, an independent qualified reserves
evaluator, evaluating the reserves of the Company effective as of
December 31, 2013 (the "McDaniel Reserve Report").
SOURCE: Caracal Energy Inc.
For further information:
Caracal Energy Inc.
Gary Guidry, President and Chief Executive Officer
Trevor Peters, Chief Financial Officer
Longview Communications - Canadian Media Enquiries
Alan Bayless +1 604-694-6035
Joel Shaffer +1 416-649-8006
FTI Consulting - UK Media Enquiries
Ben Brewerton / Ed Westropp
+ 44 (0) 207 8313 3113