Madalena Ventures Inc. is pleased to provide the following operational updates:
International Operations Update – Neuquen Basin
On the Coiron Amargo Block (35% working interest), the CAN-8 development well located 800 meters southeast of the existing CAN-7 oil producer on the northern portion of the block (i.e. Coiron Amargo Norte) which was cased to a total depth (“TD”) of 10,433 feet in December 2012, was completed over the last few weeks following a successful remedial cement squeeze executed across the Sierras Blancas light oil zone, which is one of two oil zones encountered in the wellbore. The CAN-8 well was then perforated without any stimulation and production tested in the Sierras Blancas light oil zone for a period of three days. The well flowed at an initial flowing pressure of 750 psi and declined to 440 psi at the end of the test period. The average production rates over the three day test period were 482 bbls/day (168 bbls/day net) at an oil cut of ~96%, and 525 mcf/d (184 mcf/d net) of associated gas. Gas rates were accurately measured over only the final 12 hours of the test period.
Given the results of the test, the Company placed this wellbore on production without further stimulation or a fracture treatment to further assess the overall production performance of the well. After 12 days of continuous production CAN-8 is currently flowing at approximately 178 bbls/day gross (62 bbls/day net) at an oil cut of ~88% and 337 mcf/d gross (118 mcf/d net) of associated gas, at a relatively stable flowing pressure of ~300 psi. This location may be further stimulated in the Sierras Blancas in the future, and also has an approximate 340-foot (or 104 meter) thick section of unconventional Vaca Muerta shale.
In 2013, Madalena is planning to have steady operational activity on its International assets focused on a combination of workovers and new development and exploration drilling. Madalena expects to execute 6 to 7 gross new drills, multiple workovers and additional seismic, focused on oil in the Vaca Muerta shale alongside development work in the Sierras Blancas at Coiron Amargo (35% W.I.), and the go-forward evaluation of a thick ~577m Quintuco zone (sourced from a thick ~520m Vaca Muerta shale which lies directly below) on the Cortadera block (40% W.I.). Later in 2013, additional high impact zones of interest may be further evaluated across Madalena’s assets, including further work in the Vaca Muerta shale, the Lower Agrio shale and thick tight sands within the Mulichinco.
Western Canada Operations Update – Greater Paddle River Core Area
With the focus on production growth from its three key resource plays in the Greater Paddle River area, Madalena continues to make progress on its plan to drill, multi-stage frac and tie-in four to five net horizontal wells prior to spring break-up.
At Paddle River, the Company has recently completed drilling two 100% W.I. horizontal Ostracod oil wells. Multi-port liners have been run in each and fracing operations are scheduled to commence in early March with plans to multi-stage frac these two Ostracod horizontals back to back. Madalena expects both wells to be on-stream prior to spring break-up. With a focus on oil and liquids-rich horizontal development, the Company will continue to exploit its 55 net sections on this resource play on an ongoing basis through 2013.
In the Wildwood area, completion operations are now underway at Madalena’s recently drilled 100% W.I. Nordegg liquids-rich (estimated at over 100 bbls/mmcf) horizontal well. It is anticipated that once fracing has been completed, the well will be tested and tied-in to Madalena’s local infrastructure. Madalena has 144 net sections on the Nordegg resource play.
At Niton, the Company is finalizing construction of its pipeline and wellsite facilities to enable its recently drilled 100% W.I. Notikewin horizontal well to be placed on production over the next week. The well was completed with a multi-stage frac and was tested as disclosed in a January 17, 2013 press release.
