Maha Energy Announce its 2021 Capital Plan and Production Guidance

Source: www.gulfoilandgas.com 2/4/2021, Location: South America

Maha Energy AB expects to allocate approximately USD 26 million on capital projects during 2021 and estimates the corporate average annual production to be between 4,000 – 5,000 BOEPD*. The 2021 Capital Plan will be funded through internal cashflows and a contemplated future financing.

Tie Field - Bahia, Brazil
Tie- 2021 Capital Plan

Tie-3
Tie-3 is a dual oil producer drilled on the western flank of the Tie structure. This well was originally planned for Q4 2020, but due to operational delays on Tie-2, this well was not started until late 2020. This well will eventually be converted to a water injector.

Tie-4
Tie-4 is earmarked to be the field’s first horizontal well. The well will be drilled from the GTE-4 pad and completed in the Agua Grande formation. This well is under license review by the Brazilian authorities. License approval is expected sometime in the 2nd quarter of 2021.

* BOEPD: Barrels of Oil Equivalents Per Day

Tie-5
Tie-5 will be drilled on the southern flank of the Tie structure as a water injector to maintain reservoir pressure and increase oil recovery.

Tie Facilities
The Tie facilities are all but complete, and the capital earmarked for the Tie facilities include tie-in work (flow lines and manifolding) for the new wells. Additional work includes automation of the plant and minor punch-list items.

Tartaruga Field – Sergipe, Brazil
Tartaruga- 2021 Capital Plan

Facility Upgrade
With the recent results from the TTG-3 well only minor work will continue during 2021 to upgrade the production facilities at Tararuga to handle up to 2,500 BOPD and 2,500 MSCFPD of gas.

LAK Ranch –Wyoming USA
LAK- 2021 Capital Plan

LAK Ranch
The LAK Ranch heavy oil field was shut in at the beginning of the Pandemic in 2020. No work is planned for 2021 and the field will remain shut in until oil prices recover. Whilst the Reserves valuation continues to point towards a full field development with lower but yet positive net present value, even at the current depressed oil prices, the Company maintains better yielding investments in Brazil, Illinois Basin and Oman

Illinois Basin (IB)–Illinois and Indiana, USA
IB- 2021 Capital Plan

Wells
Production will continue from the IB area during 2021. 4 wells are planned for the year, and these wells are considered to be commitment wells to keep all leases in good standing.

Mafraq Oil Field, Oman
Oman- 2021 Capital Plan

Wells
No wells are planned for 2021 in Oman – however, preparatory work will commence whereby personnel and equipment will be mobilized so that drilling can commence during 2022.

Production
The Company expects to complete most, if not all, of the Capital Plan prior to year-end 2021. The exact timing of the operations is dependent upon a number of factors including delivery of long lead items, rig availability, permitting and logistics which in turn might affect Company’s total annual production. Continuing effects of the Covid-19 Pandemic is expected to affect the timing of the Capital Plan and the 2021 Production Guidance.

As such, this 2021 Production Guidance, net to the Company (but before government or freehold royalties) is expressed in the range of 4,000 – 5,000 BOEPD*, of which approximately 8% is estimated to be gas. The guidance assumes continuing indirect effects of the Covid-19 Pandemic, such as logistical impediments due to reduced border access and depressed commodity prices. As the global pandemic eases and restrictions are reduced, the Company expects an increase in activity which in turn may affect the production guidance positively.

The Company estimates its Operating costs for 2021 (including oil transportation costs), to range between $7 and $8 per BOE applying the production guidance range provided above.

Funding of 2021 Capital Plan

2021 Capital Plan Budget
The 2021 Capital Plan has a total budget of ~USD 26 million for the above incremental projects and is expected to be funded fully through a combination of operating cash flow and proceeds from financing.


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