Maha Energy AB (publ)
SE-111 46 Stockholm
September 24, 2018
Maha Energy AB (publ) ("Maha" or the "Company") Provides Operational Update and Announces Autumn Annual Investor Presentation
The Company is pleased to provide the following Update from its operations in Brazil and Wyoming:
As announced on July 25, 2018, the GTE-3 well was recompleted and the Sergi formation (long string) was immediately placed on production. During August, a purpose built surface separator to power the newly acquired jet pump on GTE-3 has been installed, hooked up and commissioned. At the same time, attempts were made to individually test the Agua Grande ("AG' or "short string"), but due to a stuck completion plug in the short string, this operation has taken longer than anticipated. The well has now been reconfigured to allow simultaneous production from both zones (Sergi and AG) into the long string and has been producing from both zones since September 10, 2018. During a 24 hour stabilized well test, GTE-3 flowed an average of 1,091 BOPD, 41 BWPD and 450.6 MSCFGPD. While further testing will be required to determine the exact deliverability of the AG itself, in the past the AG has contributed approximately 45% of the comingled stream and the Sergi 55%. As of today's date, the production from GTE-3 is approximately 900 BOPD from both zones and is restricted due to surface storage limitations and further pump optimization. The well is currently undergoing pump optimization to maximize production from both zones. Both zones will be placed on independent production at a future time when production disruption can be minimized.
GTE-4 continues to free flow and is enjoying the effects of water injection. Current production from GTE-4 AG and Sergi formations is approximately 1500 BOPD.
Combined production from the Tie Field on September 22, 2018 was 2,418 BOPD – the highest for a 24 hour period for the Field to date. It should be noted production from the Tie Field is expected to fluctuate over the next three months as construction and commissioning work to upsize the facilities may impact production volumes and as offtake arrangements catch up to increased production (see Surface Facilities – Tie and Offtake Arrangements below).
Surface Facilities – Tie
Concurrent with the drilling and recompletion work, the Tie field is undergoing a significant expansion to handle additional production. The current facility is constrained to treating +/- 2,500 BOPD and has limited storage facilities. A new 5,000 BOPD Heater Treater was purchased, shipped from Canada and cleared customs in Brazil on September 20, 2018. A contract to build additional storage tanks has been awarded with surface work for these tanks having already been commenced. An upgraded loading dock is also being built with a view to reaching 5,000 BOPD of export capability. The Tie Production Facilities are on track to be upgraded to handle 5,000 BOPD by year end.
The Company had earlier disclosed there had been a 2,000 BOPD constraint on its ability to market and sell all oil anticipated to be produced from the Tie Field. New arrangements are now in place to progressively increase offtake and sales capability to +/- 4,100 BOPD over the next 6 months as production increases at the Tie Field. At the same time the Company continues to progress increasing the contracted volumes of associated gas to be sold as it is produced with this increased oil production.
The Conductor casing was pre-driven on September 21, 2018 in anticipation of the arrival of a Drilling Rig. Once the work at the Tartaruga field is completed, a Drilling Rig will be mobilized to the Tie field to drill the Attic well. At this point mobilization is anticipated to commence at the end of November.
Operations continue for the 107-D sidetrack. Drilling Rig mobilization and commissioning and the 107D well preparations were all completed on September 9, 2018. On September 20, 2018 the 107-D sidetrack was spudded and drilling operations commenced. The 107D sidetrack is expected to take 45 days to complete from spud date. Current operations include milling of 7" casing at the kick off point. While the Mobilization delays (5 weeks) and rig power plant issues (3 weeks) delayed spudding, the Company is pleased to finally commence subsurface operations.
The 7TTG Workover was interrupted in June due to stuck 3-1/2" tubing. The Workover will resume upon the completion of the 107D sidetrack when the Drilling Rig will be moved across the production pad (approximately 7 meters) to the 7TTG well and commence pulling the old 3-1/2" tubing. Upon its retrieval the previously unproduced Penedo-1 reservoir will be perforated, hydraulically stimulated, and comingled with the current productive Penedo-6 sandstone.
Surface Facilities – Tartaruga
Current facilities at the Tartaruga Field can process approximately 800 BOPD. Upon completion of the 107D production tests, the Tartaruga production facilities will be upgraded to handle the increase in production anticipated from 107D and 7TTG wells. As production from the Tartaruga Field is from a single well pad, production remains shut in at Tartaruga while the above operations are completed. Production will resume upon completion of the 107D sidetrack and 7TTG workover. There are no offtake restrictions on the oil produced at the Tartaruga field.
Phase 3 Drilling Program
A Drilling Rig was mobilized on September 20, 2018 to the LAK Ranch oil field. The first of 8 wells was spudded on September 21, 2018. The drilling program at LAK is expected to take 8 weeks to complete and will involve drilling 6 injector wells and 2 horizontal production wells. The facilities at LAK Ranch has already been modified to accept the additional production.
ANNUAL AUTUMN SHARHOLDER AND INVESTOR PRESENTATION
Where and When
A presentation will be held at Setterwalls Advokatbyra, Sturegatan 10, Stockholm on October 11 at 5 PM. Jonas Lindvall, CEO of Maha Energy, will present an operational update and will be joined by the Board of Maha Energy to answer any questions.
The event will also be streamed live. Please refer to our website www.mahaenergy.ca (Upcoming Events) for further details.
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 September 24, 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