Molopo Energy Limited (MPO) is pleased to announce an update on well results from its drilling in Texas, along with an indication of overall current corporate productive capacity, and capital expenditures relative to budget.
In the latter half of 2012, Molopo drilled two Bench B wells in its Barnhart area, and three wells in its Fiesta area - 2 wells into Bench A, and 1 well into Bench B. Four of those wells are currently producing in various stages of flow back and the fifth commenced completion October 24, 2012 (North America).
Currently, aggregate productive capacity estimates from all of Molopo’s producing wells (which includes Texas and Saskatchewan) ranges between approximately 1,100 barrels of oil equivalent per day (boe/d) to 1,300 boe/d, split approximately 75% to light crude oil and liquids, and 25% to natural gas. Of this production, Molopo’s two Barnhart wells are materially contributing to the estimated volumes, with further production additions expected once the wells in Fiesta finish completion, flow back and clean up.
In light of Molopo’s increased focus in the Wolfcamp, and greater capital efficiencies due to lower realized well costs relative to budget in Texas, the Company elected to reduce capital spending in Saskatchewan and drill only 1 of the 4 wells budgeted in that area. It was expected that the 3 budgeted Saskatchewan wells would have added approximately 200 bbl/d to the year-end production estimates. If the three Fiesta wells drilled in Texas perform as per type curve, the production from the Wolfcamp and the current Saskatchewan production should enable Molopo to achieve a 2012 year-end exit rate of approximately 2,100 boe/d after factoring in the incremental volume reduction from Saskatchewan.
The reduction in capital spending is approximately $15 million which will result in an increased year end 2012 cash balance. Having a higher cash balance positions Molopo very well to proceed with additional drilling in its Wolfcamp acreage through 2013, the budget for which will be announced at the end of November.
Tim Granger, CEO and Managing Director of Molopo commented, “We are very encouraged by the performance of the wells in our Wolfcamp acreage to date, and expect to commence the drilling of our final Texas well before the end of 2012. With continued well performance and higher than forecast cash balances at year end 2012, Molopo will enter 2013 in a strong position to continue with Wolfcamp development in order to maximize value for our current and future shareholders.”