CALGARY, Aug. 25, 2014 /CNW/ - Petromanas Energy Inc. ("Petromanas" or the "Company") (TSXV: PMI) today announced the filing of its financial results for the second quarter of 2014 and provided an update on its activities in Blocks 2-3 onshore Albania. The Company holds a 25% working interest and is the operator with Shell holding the remaining 75% interest.
Petromanas has provided a phased appraisal plan to the Albanian Government for the Shpirag-2 discovery and entered the second exploration period under the Blocks 2-3 PSC on June 3, 2014. The second exploration period has a two-year term. The appraisal plan contemplates drilling additional wells, planning additional seismic, continued fracture studies and the scoping of extended testing facilities.
This plan includes the Molisht-1 well which is currently drilling, followed by the Shpirag-3 well located approximately three kilometres south of Shpirag-2. Long lead items have been ordered for Shpirag-3 and the lease and access road construction that commenced in June is substantially complete. Conductor pipe has been set at the drill site.
In June, the Company announced that the Molisht-1 well had penetrated approximately 250 metres of Eocene carbonate section, before encountering a lower flysch shale zone. Hydrocarbons were present in the drill cuttings from the Eocene zone. The Company logged the upper carbonate zone and cased the well to a depth of 4,175 metres. Based on encouraging logging while drilling results in the upper Eocene carbonate, the Company elected to run intermediate wireline logs. The bore-hole image analysis revealed sections within the Eocene containing natural fractures. The prospective carbonate reservoirs in Albania are the Eocene, Paleocene and Cretaceous with the Cretaceous being the primary target.
Subsequently, drilling ahead from 4,650 metres, the Company encountered challenges in drilling the lower flysch zone due to poor hole stability caused by the extensive fracturing. The drill bit became stuck on two occasions which required sidetracks to be drilled and has extended the timeframe for drilling operations. Management is encouraged that the oil shows and fractures observed in the Eocene are indicative of the conditions that will be encountered in the Cretaceous age target reservoir. The well is currently drilling ahead in the lower flysch zone at a depth of approximately 4,500 metres. The Company expects to drill the well up to a total depth of approximately 5,800 metres with the anticipation that drilling will be completed in the fourth quarter.
"Our immediate focus remains on getting the Molisht-1 well drilled to total depth and assessing the area to the south of the discovery at Shpirag-2," said Glenn McNamara, CEO of Petromanas. "Growing our understanding of the broader field potential of Blocks 2-3 is predicated on drilling multiple wells. We are focused on drilling an optimal wellbore into the Cretaceous so we can test the productivity of this part of the reservoir and gain further information on the potential size of the resource."
Interpretation of the seismic data that was shot in 2013 continued during the second quarter. The interpretation of this data has provided valuable information used for the development of the final plan for the orientation of the Molisht-1 wellbore and the determination of bottom-hole locations for future wells in the exploration and appraisal program. Having completed the technical analysis, the Company has engaged Calgary-based GLJ Petroleum Consultants Ltd. ("GLJ") to provide an updated resource assessment of the Company's prospects on Blocks 2-3. Results of this assessment are expected to be finalized in the fourth quarter of 2014.
On May 15, 2014 the Albanian National Agency of Natural Resources refused the Company's request to enter into the third exploration period for Blocks D-E with a reduced financial commitment. While the Company had until August 11, 2014 to provide a bank guarantee for $6.3 million in order to enter into Phase 3, it has decided not to provide this level of guarantee and expects the Albanian government to terminate the licence. As a result, the Company previously recorded an impairment expense of its carrying value of Blocks D-E which was approximately $23 million. The Company considered Blocks D-E to be of higher risk than Blocks 2-3 and relatively costly to explore based on the lower prospective resource volumes allocated to the Papri prospect which led to the election to relinquish Blocks D-E.
Filing of Q2 2014 Financial Results
The Company has filed its financial statements and related Management's Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2014 on SEDAR. The financial statements and MD&A will be available on the Company's website or at www.SEDAR.com.
About Petromanas Energy Inc.
Petromanas Energy Inc. is an international oil and gas company focused on the exploration and development of its assets in Albania. Petromanas, through its wholly-owned subsidiary, holds a Production Sharing Contract ("PSC") with the Albanian government. Under the terms of the PSC, Petromanas has a 25% working interest in Blocks 2-3 that comprises more than 850,0000 gross acres across Albania's Berati thrust belt. Petromanas also holds exploration assets in France and Australia.
This press release contains forward-looking information within the meaning of applicable securities laws and is based on the expectations, estimates and projections of management of Petromanas as of the date of this news release unless otherwise stated. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release contains forward-looking information concerning the future performance of the Company, including but not limited to the conditions that the Company hopes to encounter while drilling the Cretaceous age target reservoir in the Molisht-1 well; the total depth to be drilled on the Molisht-1 well and the expected timeframe for completing such drilling; the expectation that the next well to be drilled by the Company will be the Shpirag-3 well; the timing of receipt of the GLJ resource assessment of the Company's prospects on Blocks 2-3; and the activities to be completed as contemplated in the appraisal plan for Shpirag-2 provided to the Albanian government. In respect of the forward-looking information concerning the future performance of the Company, Petromanas has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to geological conditions of the Cretaceous reservoir of the Molisht-1 well being consistent with conditions encountered in the Eocene reservoir of the same well, the timing and drilling of wells occuring in a manner consistent with the Company's past experience, the Company's ability to meet its capital and operational commitments, the ability of Petromanas to receive, in a timely manner, necessary regulatory and governmental operational approvals; and expectations and assumptions concerning, among other things: commodity prices and interest and foreign exchange rates; planned construction activities, capital efficiencies and cost-savings; applicable tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.
Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the industries in which Petromanas operates in general such as operational and exploration risks; delays or changes in plans with respect to growth projects or capital expenditures; delays in obtaining or the failure to obtain governmental approvals, permits or financing or political risks in the completion of development or construction activities; access to drilling rigs, completion equipment, seismic equipment and operational personnel; costs and expenses; political risks; risks of litigation; title disputes; health, safety and environmental risks; commodity price, interest rate and exchange rate fluctuations; environmental risks; competition; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws and environmental regulations.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of Petromanas are included in reports on file with applicable securities regulatory authorities, including but not limited to; Petromanas' Annual Information Form for the year ended December 31, 2013, which may be accessed on Petromanas' SEDAR profile at www.sedar.com.
The forward-looking information contained in this press release is made as of the date hereof and Petromanas undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services 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: Petromanas Energy Inc.
For further information: Glenn McNamara, CEO, Bill Cummins, CFO, Petromanas Energy Inc., Suite 1720, 734 - 7th Avenue SW, Calgary, Alberta, Canada T2P 3P8, Tel: +1 403 457 4400, Fax: +1 403 457 4480, Email: [email protected], Website: www.petromanas.com; Nick Hurst, The Equicom Group, 300 - 5th Avenue SW, 10th Floor, Calgary, Alberta, Canada T2P 3C4, Tel: +1 403 218 2835, Fax: +1 403 218 2830, Email: [email protected]