Maha Energy AB (publ)
SE-111 46 Stockholm
July 4, 2018
Maha Energy AB (publ) ("Maha" or the "Company") Announces June Production Volumes, Operational Update for Brazil and New Liquidity Provider
The Company's aggregate sales production for the month of June totaled 36,5741 barrels of oil and 16.671 million scf of gas for a combined average production of approximately 1,312 BOE/day2, before royalties and taxes.
The previously announced capital program for 2018 (the "Capital Program") continues to temporarily affect production from the Tartaruga field and will continue to do so until the work is complete. The field was shut in for a total of 8 days in May and 20 days in June due to the planned 7TTG intervention work. The totalcurrent anticipated shut in period is 60 days. Production from the Tie field continues uninterrupted and it is currently expected there will be no material reduction in Tie field production during the Work Program.
- The GTE-3 workover to install the downhole components of the hydraulic jet pump commenced on June 30 and is now well under way.
- The Surface Jet Pumps arrived at the Tie field and work is completed for a quick tie in once the GTE-3 workover is completed.
- The Faxe-2 Drilling Rig completed the required pre-mobilization test on June 30th. Mobilization of the drilling rig (a total of 45 loads) is scheduled to commence on July 5th and it is anticipated to take 15 days to complete.
Below details current steps and current timing of the Brazil part of the Capital Program underway:
The workover to recomplete the 7TTG well with larger tubing and a dedicated jet pump has been delayed due to stuck tubing. Work commenced in May to recover 1.5 inch coiled tubing and 3.5 inch production tubing in the well. After several attempts to free the downhole packer, the 1.5" tubing had to be chemically cut just above the packer.
A last minute change of workover rigs due to scheduling problems delayed mobilizing of the EBS Rig 113. Once mobilized, the 3.5 inch tubing was latched and pulled, however, the string parted at a weak joint. Fishing tools were connected but the EBS Rig 113 was unable of providing sufficient power to free the pipe. A decision was taken to demobilize the rig and postpone the workover until after the 107D well has been sidetracked. The Faxe Rig 2 will move across and complete the 7TTG workover upon completion of the 107D well. The overall result is a 4 week delay and a potential cost over run on the 7TTG well operation of approximately USD 500,000.
107 D Re-entry
The Faxe 2 Drilling Rig passed its pre-acceptance test on June 30 and will now be mobilized to the Tartaruga field. Mobilization is expected to be completed by July 20 and drilling operations are expected to start shortly thereafter. The re-entry is expected to take 45 days to drill and complete once the rig is rigged up over the well. At this time, commencement of the sidetrack is approximately 3 weeks late. There is no impact on cost at this time.
The EBS Rig 113 was mobilized to the GTE-3 site on June 29 with the objective of installing the downhole components of the newly acquired (and delivered) jet pump. Once rigged up, it is anticipated to take 8 days to recover and re-run the dual completion in this well. Upon completion, the pump will be hooked up and the well put on production. There has been a delay with the GTE-3 operations because of the 7TTG delays. Originally it was anticipated that the GTE-3 workover would be completed by the end of June. It is now anticipated the well will be producing oil by the end of July – a delay of 4 weeks but with no anticipated cost overruns.
The 7TTG delays- delayed the commencement of the 107D well by about 3 weeks- which will in turn likely impact the commencement of the Attic Well. Upon completion of 107D Well, the Faxe 2 Rig will be moved to finish the recovery of the 3.5-inch tubing from the 7TTG well and the workover which includes perforating the P1 sand and conducting hydraulic stimulation. This work, all going well, is expected to take 8 – 10 days. The result is the commencement of the Attic Well is now anticipated to start in late September, a delay of about 4 – 5 weeks but with no anticipated cost overruns.
Change of Liquidity Provider
The Company changed the contracted Liquidity Provider from Remium to Penser Bank AB. During this process a total of 30,000 shares were placed on loan to the Liquidity Provider by Jonas Lindvall, CEO of Maha Energy AB.
"Despite all the best planning – workovers often encounter unforeseen difficulties that the Maha team is well trained to react to. Previous operators have used undersized and weaker components which continue to affect production and operations. While it is premature to assess the precise effect of the delays and cost over-runs on the overall Capital Program budget and schedule – I am confident that we will claw back time lost and cost as no doubt other parts of the program will go smoother than anticipated," stated Jonas Lindvall, CEO of Maha Energy AB.
1Subject to minor standard industry adjustments at the time of custody transfer.
2Barrels of oil equivalent ("BOE") conversion ratio of 6,000 scf: 1 bbl is used.
FNCA Sweden AB is the Company's Certified Adviser.
For more information, please contact:
Jonas Lindvall (CEO)
Tel: +1 403 454 7560
Ron Panchuk (CCO)
Tel: +1 403 454 7560
The information was submitted for publication through the agency of the contact persons set out above on July 4, 2018, at 7:00 a.m. (CET)
Maha in Brief
Maha Energy AB is a Swedish public limited liability company. FNCA Sweden AB has been engaged as Certified Adviser. The Company's auditors are Deloitte. The Company's predecessor Maha Energy Inc. was founded in 2013 in Calgary, Canada, by Jonas Lindvall and Ron Panchuk. In May 2016, the new group was formed with Maha Energy AB as parent company for purposes completing an initial public offering on the Nasdaq First North Sweden stock exchange. Jonas Lindvall, CEO and Managing Director, has 26 years of international experience in the oil and gas industry, starting his career with Lundin Oil during the early days of E&P growth. After 6 years at Shell and Talisman, Jonas joined, and helped secure the success of, Tethys Oil AB. Maha's strategy is to target and develop underperforming hydrocarbon assets on global basis. The Company operates three oil fields, Tartaruga and Tie in Brazil and LAK Ranch, in Wyoming, U.S. For more information, please visit our website www.mahaenergy.ca.
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Source: Maha Energy AB via Globenewswire