Q1 results; solid perf, MAJOR progress on big initiativesMadalena Energy (MVN MDLNF) released its first-quarter results last night.
The company will hold its investor conference call
today at 10am ET.
The following are
dial-in numbers for the earnings call:
Local Dial-in Number: (+1) 587 880 2171
Toll Free Dial-in Number North America:
(+1) 888 390 0546 Toll Free Dial-in Number United Kingdom: 08006522435
Toll Free Dial-in Number Argentina: 08004448221
In the first-quarter, Madalena reported
positive EBITDA (before growth CapEx) despite
- The lowest quarterly oil price since at least 2015 ($45.21/boe; which has since substantially rebounded to $55+ in April)
- Completing workovers in the Company’s northern blocks, which hampered netbacks; since completion in Q1, netbacks will considerably improve
and, while
continuing to increase its production (+12% QoQ; from 1,751 to 1,960; April production is 2,000 boe/d)
With respect to the Company’s big initiatives:
Coiron Amargo Sur Este (CASE)- Pan-American Energy, Madalena’s JV partner, has
started drilling the first four production wells (of a four-well pilot phase) in CASE, which contains Vaca Muerta shale. Madalena holds a 35% working-interest in CASE. Madalena’s share of costs (up to USD 40mm) is fully-financed by Pan-American at 7%. Pursuant to its most recent resources report, Madalena’s NPV 10% for Madalena’s Net Contingent Resources is
USD 1.456bn (
USD 2.67/share), and the JV-partners have a 35-year production concession from the Province of Neuquen. For purposes of expectations and comparison, recently,
Vista Oil & Gas was able to achieve ~6,500 boe/d from its first four wells in Vaca Muerta (Bajada del Palo Oeste). Similar results in CASE would net Madalena 2,275 boe/d,
or >100% increase in Madalena’s current production.
Curamhuele- On May 13, the Company received a
2-year extension from the Province of Neuqun on the exploratory concession (through 2021). Curamhuele is a “stacked” play (50k net acres), containing multiple drillable formations (natural gas and condensates). The Company will be drilling a vertical test-well in Curamhuele in late 2019/early 2020. In addition, the Company has stated its primary interest in attracting a JV partner to develop Curamhuele, similar to the JV in CASE. With regard to the value of Curamhuele, recently
, Chevron doubled-down on its USD 200mm commitment to its El Trapial block (immediately adjacent (East) to Curamhuele), and has
commissioned for the next 4 years state-of-the-art equipment to drill in the block, starting with an 8-well pilot program.
El Vinalar- the Company has completed the assignment of this non-core asset, and as a result, the Company has been absolved of a USD 3.8mm decommissioning obligation.
Forthcoming Catalysts With respect to the next few months, we expect the following flurry of positive catalysts, which will help move Madalena’s stock-price higher
- drilling results for CASE
- stock listing and trading on the BYMA (Argentina stock-exchange)
- details on resources and drilling program for Coiron Amargo Norte (Lotena formation; new conventional natural gas play)
- increased conventional production through asset purchases
- JV announcement relating to Curamhuele