Madalena Energy Inc. is pleased to announce it has recently completed the testing of an operated horizontal multi frac well in the Loma Montosa formation on its 100% working interest property at Puesto Morales, one of Madalena's four strategic resource plays in Argentina. Madalena is also pleased to provide an update on its horizontal well development on its Coiron Amargo Block.
Loma Montosa Oil Resource Play –Horizontal Well Test The PMS-1135(h) well on Madalena's Puesto Morales block, was successfully drilled and cased with a tapered mono-bore assembly to a total depth of 2,600 metres with a horizontal length of approximately 1,095 metres. The horizontal section had twelve open hole frac packers and ports while the main 5.5"casing string was cemented
using a staged cement collar. Madalenathen completedArgentina'sfirst 12 stage ball drop fracoperation. All 12 stages were completed using a hybrid slickwater/gel frac that pumped a total of 10,900 bbls of water and360 tonnes of sand (approximately 30 tonnes per stage).
Testing operations commenced on March 30, 2015 and the well has been flowing up5.5"casing with out a production string run.Over the last 24 hours,the well flowed
a total of 860 boe/d including 480 barrels of oil per day (bopd) plus 2,300 mcf/d of gas at a flowing pressure of 530 psiand a 47% water cut. Cumulative production over the last 5 days was 2,140 barrels of oil (428 bopd)plus gas volumes. To date the well has recovered 4,931 barrels of water which is approximately 45% of the total water based frac fluid pumped.
Although Madalena is very encouraged by this production test, it cautions that these results are not necessarily indicative of the long-term performance or of the ultimate recovery of the well.
Madalena is currently proceeding to tie this well into its existing infrastructureand has a large inventory of horizontal development locations on the Puesto Morales block.
Sierras Blancas Light Oil Exploitation -Horizontal Development UpdateAt Coiron Amargo (35% Madalena working interest "WI"), drilling and completion operations recently finished on the Company's fourth Sierras Blancas horizontal well (CAN-16(h)). The CAN
-16h well was drilled to a total depth of 4,214 metres with a horizontal lateral section of 1,011 metres. Testing operations began on March 15, 2015and the well was tied into production facilities on March27,2015at a total rate of 600 boe/d (210 boe/d WI) including 480 barrels of oil per day (170 bopdWI) and 730 mcf/d (255 mcf/d WI) of associated gas
flowing at 1,400 psi wellhead pressure. The well has been on test or production for20days and continues to produce at a rate of 590 boe/d (206boe/d WI) with a 15% water cut.
About the Loma Montosa Oil Resource Play at Puesto Morales (100% WI) The Loma Montosa represents one of four key resource plays being pursued by Madalena in 2015.
The Vaca Muerta shale, Agrio shale,both oil plays,and theMulichinco liquids-rich gas play comprise the other three resource plays. The LomaMontosa play atPuesto Morales is at a vertical depth of approximately 1,350 metres.
The Company has internal geological mapping based on approximately 60 historic vertical wells which have penetrated the Loma Montosa and there is cumulative oil production of approximately 2.3million barrels.The Loma Montosa formation is characterized as a tight dolomite withaverage porosityof 9to12%and permeability of2 to5 millidarcies.
The vertical wells offsetting the PMS-11-35(h) horizontal well have approximately 26 metres of gross payand an estimated 15 metres of net pay.
On the Puesto Morales block (31,254 net acres), Madalena operates and controls a 100% working interest facility and pipeline infrastructure in the area.
To unlock the Loma Montosa oilresource play, the Company is applyingNorth American originated horizontal multi-frac technology to increase recoveries and improve overall play economics. This provides Madalena with a new area of scalable, full-cycle resource development. Madalena’s team in Argentina executed the PMS-1135(h)
milestone operation safely and efficiently and was in particular supported by Calfrac Well Services and Packers Plus Energy Services to achieve a number of technolological firsts in Argentina.
