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To: Goose94 who wrote (4169)	1/15/2014 8:51:11 AM
From: Goose94	Respond to of 203109

Madalena Energy (MVN-V) Jan 15, '14 has provided operational updates. International Update: Neuquen Basin, Argentina Coiron Amargo Block (35% Working Interest) - Sierras Blancas Horizontal & Vaca Muerta Shale Drilling Update The CAN.xr-2(h) well was recently re-entered and drilled horizontally in the Sierras Blancas light oil reservoir to a total measured depth of 3,751 meters with a horizontal lateral section of approximately 530 meters in length. This horizontal well was subsequently cased and completed with a 3.5" slotted liner and a multi-rate production test was carried out through temporary production facilities. Details of the initial 142 hour production test were outlined in a press release issued on December 27, 2013. The highest rates during that test period were achieved on a 12mm choke setting, when the well was flowed at a rate of 1,791 bbls/d of oil with 2,683 mcf/d of associated natural gas for a total of 2,238 Boe/d (80% oil) over a three hour period and at an average flowing pressure of approximately 1,304 psi. In the 10 day period to January 7, 2014, the well flowed on a restricted 6 mm choke through temporary facilities. During this 10 day period, the well produced 6,033 bbls of oil and 10.7 mmscf of associated gas for a total of 7,815 Boe (77% oil). No significant flowing pressure declines have been observed to date and no water has been produced. The well will continue to be produced at restricted flow rates until permanent facilities are in-place which is expected in February 2014. This well represents the first horizontal well drilled into one 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 second horizontal well targeting the Sierras Blancas light oil reservoir (CAN-15(h)) is now expected to spud in January 2014 once the drilling operations are completed at CAS.x-15 (see below). The CAN-15(h) horizontal well will be drilled into one of the largest Sierras Blancas pools on the block and targets a separate pool than was drilled by the CAN.xr-2(h) horizontal well. Ongoing technical work and operational enhancements are expected to continue to improve the Company's understanding of the ultimate potential of its Sierras Blancas horizontal oil play. The Company has also recently reached a total depth of 3,163 meters on the CAS.x-15 vertical well targeting the Vaca Muerta shale. The CAS.x-15 well is located in the southern portion of the Coiron Amargo block within the oil window and the well has been cased with approximately 114 meters of Vaca Muerta shale on logs. Completion and testing operations are now planned for the first quarter of 2014 to evaluate this well. The drilling rig which has just finished drilling the CAS.x-15 well will now move to the CAN-15(h) lease site to commence drilling operations on the Company's second Sierras Blancas horizontal as outlined above. Cortadera Block Update (37.8% Working Interest) - Decree Signed with Re-Entry Planned for Q1 2014 On the Cortadera Block, the joint venture signed an amended contract agreement on September 24, 2013 to formalize a multi-year agreement for the extension of the initial exploration period and inclusion of subsequent exploration periods. Following an application and approval process, the first exploration period for Cortadera has now been extended by way of an official decree signed by the Province of Neuquen. This extension provides the partnership until October 26, 2014 to satisfy the remaining work commitments on the block which involves the upcoming re-entry work (see below). Under the amended agreement, and subsequent to conducting the upcoming re-entry work, the partnership at Cortadera has the option to enter into subsequent exploration periods involving a second exploration period extending to October 25, 2018 and a third exploration period extending to October 25, 2021, or extend the Cortadera block through potential further evaluation and/or exploitation phases. The decree stipulates that Gas y Petroleo del Neuquen SA (the Neuquen provincial petroleum company) upwardly revises its currently carried working interest in the block to 15% from the previous 10%, resulting in a proportionate reduction of Madalena's working interest in the block to 37.7778% compared to its previous 40% working interest. In the first quarter of 2014, Madalena and its partner plan to re-enter the previously drilled CorS.x-1 Vaca Muerta test well to evaluate an up hole zone of interest in the wellbore. Domestic Update: West-Central Alberta - Focused on Ostracod Oil Development In the greater Paddle River area, Madalena drilled two additional (1.92 net) Ostracod horizontal wells in the month of December. Both wells successfully encountered their targeted oil zones and multi-port production liners were run in the horizontal lateral sections. It is currently anticipated that these two wells will be multi-stage fracture stimulated, tested and potentially placed on production in the first quarter of 2014. Following the completions and testing of the two wells noted above and before the end of the first quarter of 2014, Madalena anticipates drilling an additional horizontal well on its Ostracod oil development project. In 2013, the Company drilled five (4.92 net) wells on the Ostracod project. Ongoing technical work and operational enhancements continue to improve the Company's understanding of the ultimate potential of this project. Madalena has approximately 58 net sections of land on the Ostracod oil trend and has a significant inventory of drill-ready horizontal locations for continued development. The Company has also recently completed its evaluation of the Nordegg horizontal well (100% working interest) at 15-12-55-9W5. Completion and testing operations ultimately did not result in meaningful hydrocarbon production and the wellbore has been suspended. The technical information gained throughout the drilling, completion and testing of this first horizontal well has furthered Madalena's understanding of this emerging resource play and will be applied to future operations. There were no reserves assigned to the 15-12 Nordegg horizontal in Madalena's 2012 year end reserves evaluation. The Company's Canadian exploration and evaluation assets at December 31, 2013 have yet to be determined and are expected to be adjusted accordingly, if required, in conjunction with the preparation of the year-end financial statements.