CALGARY, Oct. 30, 2014 /CNW/ - Petromanas Energy Inc. ("Petromanas" or the "Company") (TSXV: PMI) today provided an update on key operational and corporate initiatives for its European assets located in Albania and France.
As announced in the press release dated August 25, 2014, the Company was drilling a sidetrack well targeting the lower carbonate reservoir. While drilling ahead, the drill bit became stuck in the lower flysch shale zone at a depth of approximately 4,700 metres. The bottom hole assembly was subsequently severed from the drill pipe and the well is currently ready to drill ahead from a depth of approximately 4,200 metres without losing hole diameter.
In conjunction with its joint venture partner, Shell, Petromanas has decided to temporarily suspend the Molisht-1 well. The partners intend to re-enter the well in the future with a higher powered rig to continue drilling to the lower carbonate reservoir with the goal of reaching target depth in the Cretaceous zone. The Company is in the process of releasing the rig currently on site.
"Having encountered challenges drilling the lower flysch shale below the upper Carbonate Eocene zone, the joint venture believes that the best option to reach the target depth with an optimally sized well bore is through the use of a more powerful rig," said Glenn McNamara, CEO of Petromanas. "In the near term we intend to move ahead with drilling the Shpirag-3 appraisal well using the 3,000 horsepower rig we recently secured."
The Company previously announced that the Molisht-1 well had penetrated approximately 250 metres of Eocene carbonate. Hydrocarbons were present in the drill cuttings from the Eocene zone. 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. With this information the Company continues to be optimistic about the potential of both the upper Eocene carbonate and the lower carbonate zones to bear hydrocarbons and contain the natural fractures required to demonstrate productive capablility. The prospective carbonate reservoirs in this structure are the Eocene, Paleocene and Cretaceous with the Cretaceous being the primary target.
Based on the costs associated with drilling the Shpirag-2 and Molisht-1 wells, management is currently in the process of identifying and reviewing all options to support the financial requirements of a longer-term appraisal and development of Blocks 2-3. Initiatives currently under consideration include, but are not limited to, a further farm down of Petromanas' working interest in Blocks 2-3, the disposition of selected assets, and raising additional capital. In addition, the Company has retained Peters & Co. Limited to act as its financial advisor in connection with such review process. The review process is ongoing and Petromanas does not intend to disclose developments with respect to the review process until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is necessary or appropriate.
"Securing the future development of the Albanian assets over the longer term requires exploring all funding alternatives to minimize dilution to the current shareholders," said Glenn McNamara. "We are evaluating a range of options that we believe can support development beyond the drilling of the third well envisioned in our current joint venture agreement with Shell."
Under the terms of the amended definitive farm out agreement, Shell will carry Petromanas on a third well to a maximum value of US $42.5 million gross drilling costs. The Company holds a 25% working interest and is the operator with Shell holding the remaining 75% interest.
As previously announced, the Company is working with Macquarie Capital Markets Canada Ltd. on a marketing initiative to support discussions with potential joint venture partners for its French assets. To this point, the Company has received expressions of interest from multiple parties. Petromanas has a 100% working interest in both the Ledeuix and Ger Permits.
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. For further information please contact:
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 near term plans for drilling the Shpirag-3 appraisal well, future plans for re-entering and drilling the Molisht-1 well, securing additional funding to support the financial requirements of its activities in Albania and securing a joint venture partner for its French assets. 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 reservoir of the Molisht-1 well and the drilling of wells and performance of rigs 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. There is a specific risk that the Company may be unable to complete the drilling, completion and testing of the Molisht-1 well in the manner described in this press release or at all. If the Company is unable to drill, complete and test the Molisht-1 well at costs estimated and in the manner described in this press release or at all there could be a material adverse impact on the Company and on the value of the Company's securities. There is a specific risk that the Company may not be able to secure a funding solution for the longer term appraisal and development of Blocks 2-3 on acceptable commercial terms, or at all. If the Company is unable to secure such a funding solution in the manner described in this press release, or at all, there could be a material adverse impact on the Company and on the value of the Company's securities.
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]