Maglan Capital Asks To Conduct A Review Of Alternatives For Madalena Energy
Dec 8 14
Maglan Capital LP has asked through a letter to Madalena Energy Inc. (TSXV:MVN) to conduct a strategic review of alternatives for Madalena Energy. In the letter, Maglan Capital said, "It is our view that the key to value creation for shareholders is to prove up and derisk the shale assets, whether by self-funded capex and/or joint ventures/partnerships. Everything else is noise. Accordingly, the time has come for the board to review the management of the company and to bring in seasoned oil and gas executives to drive value for shareholders by developing the shale assets, growing production, monetizing non-core assets and reducing the share float. At the same time, the board should consider a sale of the company or other strategic transactions to maximize value for shareholders."
Madalena Energy Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2014; Provides Capital Budget Guidance for the Second Half of 2014, Earnings and Production Guidance for the Year 2014 and Production Guidance for the First Quarter of 2015
Nov 26 14
Madalena Energy Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2014. For the quarter, the company reported oil and gas revenue of CAD 30,860,000 against CAD 4,840,000 a year ago. Funds flow from operations was CAD 8,750,000 or CAD 0.02 per basic and diluted share against CAD 1,828,000 or CAD 0.01 per basic and diluted share a year ago. Net loss was CAD 2,267,000 or CAD 0.00 per basic and diluted share against CAD 118,000 or CAD 0.00 per basic and diluted share a year ago. Capital expenditures were CAD 12,543,000 against CAD 7,171,000 a year ago.
For the nine months, the company reported oil and gas revenue of CAD 46,310,000 against CAD 12,327,000 a year ago. Funds flow from operations was CAD 13,368,000 or CAD 0.03 per basic and diluted share against CAD 2,239,000 or CAD 0.01 per basic and diluted share a year ago. Net loss was CAD 5,480,000 or CAD 0.01 per basic and diluted share against CAD 2,758,000 or CAD 0.01 per basic and diluted share a year ago. Capital expenditures were CAD 27,256,000 against CAD 30,175,000 a year ago.
For the third quarter, the company reported crude oil and condensate average daily sales of 3,377 Bbls/d against 401 Bbls/d a year ago. Natural gas average daily sales were 7,135 Mcf/d against 3,838 Mcf/d a year ago. NGLs average daily sales were 140 Bbls/d against 137 Bbls/d a year ago. Total average daily sales were 4,707 boe/d against 1,177 boe/d a year ago.
For the nine months, the company reported crude oil and condensate average daily sales of 1,592 Bbls/d against 338 Bbls/d a year ago. Natural gas average daily sales were 4,604 Mcf/d against 3,340 Mcf/d a year ago. NGLs average daily sales were 125 Bbls/d against 129 Bbls/d a year ago. Total average daily sales were 2,485 boe/d against 1,024 boe/d a year ago.
The company provided capital budget guidance for the second half of 2014, earnings and production guidance for the year 2014 and production guidance for the first quarter of 2015. For the second half of 2014, the company had previously established a CAD 36 million capital budget for the second half of 2014. The company expects to spend an estimated CAD 26 million of such amounts by the end of 2014 with certain drilling and operational activities related to the company's International programs being carried over into 2015.
The company continues to be well positioned heading into an active 2015 year and expects to be in a positive working capital position with no debt at the end of 2014. The company's current base production is approximately 4,400 boe/d plus an additional estimated 200 bopd which is currently shut-in on its El Vinalar block pending maintenance work. This production is expected to be restored prior to the end of 2014.
In addition, the company also has an estimated 500 boe/d of production additions to be brought on stream in first quarter-2015 from recent drilling and completion operations conducted in fourth quarter-2014.
Madalena Energy Inc. Announces New Oil & Gas Discovery, Continued Drilling Success in Argentina and Vaca Muerta Shale Drilling Update
Nov 4 14
Madalena Energy Inc. provided the following operational update. Nordegg Horizontal Play-- New Oil & Gas Exploration Discovery: 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 CAD 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. 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 higher 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 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. A multi-well horizontal drilling program in the Loma Montosa oil resource play is planned for 2015 in the Puesto Morales field. A drilling rig has been contracted and it is expected that the first well will commence drilling in December 2014 or January 2015. Curamhuele (90% WI) Block -- Drilling Rig Secured for Agrio Shale & Mulichinco Appraisal Program: Madalena and its partner Gas Y Petroleo (GyP, the Provincial Oil company) have secured a drilling rig for the re-entry, sidetrack and completion (frac and test) of the CH-x-1 well targeting the Agrio shale and the deepening of the YP-x-1001 well to frac and test the Mulichinco liquids-rich gas resource play. Regulatory approvals have been received and the Company anticipates commencing operations in first quarter of 2015. Madalena's Curamhuele block is within the oil window of the Agrio shale with an estimated thickness of 225 metres and is directly offsetting a recently announced Agrio shale discovery by the Argentina state company YPF. In addition to the Agrio shale, the primary zones of interest on the Curamhuele block are the unconventional Vaca Muerta shale and liquids rich Mulichinco sands. The block is also prospective for other conventional reservoirs.