MVN Awarded of 35-Year Unconventional Exploitation Co Madalena Announces Awarding of 35-Year Unconventional Exploitation Concession Over Coiron Amargo Sur Este (CASE) Block
BUENOS AIRES, Argentina, Sept. 18, 2018 (GLOBE NEWSWIRE) -- Madalena Energy Inc. ("Madalena" or the "Company") (TSXV: MVN and OTCQX: MDLNF) is pleased to announce that the Coiron Amargo Sur Este ("CASE") block in Neuquen, Argentina, is now an unconventional exploitation concession with a 35-year term. The concession was awarded after the CASE block successfully completed the evaluation phase.
The operating partner of the CASE block, Pan American Energy LLC ("PAE"), holds a 55% stake. Madalena and Gas y Petroleo del Neuquen S.A. (GyP) hold stakes of 35% and 10% respectively.
As part of the terms and conditions for the award of an Unconventional Exploitation Concession, the Company has agreed, together with its partners, to invest: USD 74 million (USD 25.9 million net to Madalena) to carry out a pilot plan over a two-year period (the "Pilot Plan").
The Pilot Plan includes two phases. Phase I includes the drilling of five horizontal multifrac wells targeting the Vaca Muerta, the construction of early production facilities, investment for infrastructure improvement and social responsibility commitments.
Contingent on Phase I results, three additional wells will be drilled over the following two-year period (Phase II) for an estimated amount of USD 50 million (USD 17.5 million net to Madalena).
Madalena’s portion of the Pilot Plan investment will be funded by drawing on its existing credit facilities.
Jose David Penafiel, President and CEO of Madalena Energy commented:
“Madalena’s JV with Pan American Energy in the CASE block now has a 35 year term which will allow the JV to focus on deploying additional capital expenditure to incorporate reserves and increase production at greater speed and scale. We look forward to continuing to work with PAE on the upcoming 2019 drilling program.”