CALGARY, Aug. 7, 2014 /CNW/ - Madison PetroGas Ltd. Is pleased to provide an operational and financial update.
All dollar values are expressed in United States dollars unless otherwise stated.
- Completed acquisition of 350km of 2D seismic on the West Bakassi Block in Cameroon.
- Drilled one exploration well and three successful development oil wells on Block H, West Gharib, Egypt.
- Entered into financial arrangement to ensure prompt payment of $30.0 million of current and future receivables in Egypt.
West Bakassi, Cameroon (35% working interest)
On July 18, 2014 the acquisition of the planned 350 km of 2D seismic on the West Bakassi Block in Cameroon was completed. This fulfills the work commitment obligation for seismic under the Production Sharing Contract for both the initial and first renewal periods of the Exploration Phase. Working in difficult terrain our partner operator Dana Petroleum along with geophysical company BGP, did an excellent job with no serious accidents or security incidents.
Work is underway to process and interpret the seismic data and we expect to have an inventory of drilling prospects completed by year end. Drilling of our first well is expected to start in Q4, 2015.
Block H, West Gharib, Arab Republic of Egypt (50% Working Interest)
The 2014 drilling campaign began the first week of May 2014. One high risk exploration well and three Meseda development wells have been drilled to date. The exploration well, Raboul South-1X, was located to the western edge of the H Block and was found to be dry. The three Meseda development wells are all successful oil wells.
Meseda-14H was drilled as an appraisal well to test the NE limit of the field. The well encountered 128 ft. of net oil pay in the Asl sand. The well was put on production on June 1, 2014 and is producing at an average of 1,000 bopd with 1% WC (190 bopd net to Madison).
Meseda-10H was drilled as an appraisal well to test the NW limit of the Meseda field. The well encountered 136 ft. of net oil pay in the Asl sand. It was put on production on July 15, 2014 and is producing an average of 850 bopd of clean oil (160 bopd net to Madison).
Meseda-4H was drilled as an appraisal well to test the SW limit of the Asl reservoir in the Meseda Field. The well encountered 17 ft. of net oil pay in the Asl sand and rig released a week ago. Production is expected to start shortly and we anticipate an average production rate of 250 bopd (50 bopd net to Madison).
With the additional volumes from the three wells, net Madison production will be approximately 1,000 bopd after State take. Depending on rig and materials availability, one or two more development wells may be drilled prior to year-end.
In July, 2014 the Company entered into a financial arrangement with a large Egyptian Bank which will ensure $30.0 million of current and future receivables will be paid to Madison on time. The arrangement will last for 12 months and the Company will pay a fee of approximately 8%. An initial payment of $8.0 million was received in July, representing Madison's current outstanding receivable balance with the Egyptian government. The next $22.0 million of receivables, net the 8% fee, will be paid to Madison when due.
This arrangement gives Madison the confidence to continue to meet future capital expenditures in Cameroon and also pursue new opportunities.
With a strong balance sheet, free cash flow and world-class exploration upside, Madison continues to build value as the Company enters into a period of strength with significant optionality.
Madison PetroGas Ltd. is a Calgary-based private oil and gas exploration and development company focused on the Middle East/Africa region with operations in the Arab Republic of Egypt and Cameroon.
Cautionary Statement to Investors:
This news release may include certain statements that may be deemed to be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements relate to possible future events. 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", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Madison's forward-looking statements are based on the beliefs, expectations, opinions and assumptions of the Company's management on the date the statements are made, such statements are inherently uncertain and provide no guarantee of future performance. Actual results may differ materially from Madison's expectations as reflected in such forward-looking statements as a result of various factors, many of which are beyond the control of the Company. Madison does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, other than as required by law, and investors should not attribute undue certainty to, or place undue reliance on, any forward-looking statements.
SOURCE: Madison PetroGas Ltd.
For further information: Madison PetroGas Ltd.: David Mitchell, President & CEO, +1 403 781-5092, [email protected]; Neil Taylor, Chief Financial Officer, +1 403 781-5888, [email protected]; www.madisonpetro.com