Molopo Announces Well Results, Update on Production and Capital
CALGARY, ALBERTA -- (Marketwire) -- 10/24/12 -- Molopo Energy Limited
(ASX:MPO) is pleased to announce an update on well results from its
drilling in Texas, along with an indication of overall current
corporate productive capacity, and capital expenditures relative to
In the latter half of 2012, Molopo drilled two Bench B wells in its
Barnhart area, and three wells in its Fiesta area - 2 wells into
Bench A, and 1 well into Bench B. Four of those wells are currently
producing in various stages of flow back and the fifth commenced
completion October 24, 2012 (North America).
Currently, aggregate productive capacity estimates from all of
Molopo's producing wells (which includes Texas and Saskatchewan)
ranges between approximately 1,100 barrels of oil equivalent per day
(boe/d) to 1,300 boe/d, split approximately 75% to light crude oil
and liquids, and 25% to natural gas. Of this production, Molopo's two
Barnhart wells are materially contributing to the estimated volumes,
with further production additions expected once the wells in Fiesta
finish completion, flow back and clean up.
In light of Molopo's increased focus in the Wolfcamp, and greater
capital efficiencies due to lower realized well costs relative to
budget in Texas, the Company elected to reduce capital spending in
Saskatchewan and drill only 1 of the 4 wells budgeted in that area.
It was expected that the 3 budgeted Saskatchewan wells would have
added approximately 200 bbl/d to the year-end production estimates.
If the three Fiesta wells drilled in Texas perform as per type curve,
the production from the Wolfcamp and the current Saskatchewan
production should enable Molopo to achieve a 2012 year-end exit rate
of approximately 2,100 boe/d after factoring in the incremental
volume reduction from Saskatchewan.
The reduction in capital spending is approximately $15 million which
will result in an increased year end 2012 cash balance. Having a
higher cash balance positions Molopo very well to proceed with
additional drilling in its Wolfcamp acreage through 2013, the budget
for which will be announced at the end of November.
Tim Granger, CEO and Managing Director of Molopo commented, "We are
very encouraged by the per
formance of the wells in our Wolfcamp
acreage to date, and expect to commence the drilling of our final
Texas well before the end of 2012. With continued well performance
and higher than forecast cash balances at year end 2012, Molopo will
enter 2013 in a strong position to continue with Wolfcamp development
in order to maximize value for our current and future shareholders."
Following is an update on the current status of Molopo's wells in the
various stages of production, test and flow back, and the relative
contribution to overall production:
-- 36-2H Linthicum Washington (Barnhart) - Currently on test after
preliminary results were released August 30, 2012. Since that time, the
maximum 24 hour initial production (IP) rate was 742 boe/d, comprising
approximately 525 bbl/d of crude oil, 109 bbl/d of natural gas liquids
(NGL) and 644 mcf/d of natural gas. The IP30 rate for this well was
approximately 400 boe/d.
-- 36-1H Linthicum Washington (Barnhart) - Has been on gas lift for 24 days
and has flowed back high levels of fraccing fluid, and is still
currently producing approximately 450 bbl/d of load fluid. The peak 24
hour rate since the well came on production is 792 boe/d, comprising
approximately 628 bbl/d of crude oil, 91 bbl/d of NGLs and 536 mcf/d of
natural gas. An IP30 rate will be provided after 30 days.
-- Baggett 16-1H (Fiesta) - Molopo's first long lateral well drilled in
Fiesta has been on gas lift for 49 days has recovered over 32% of its
load fluid. It is still producing approximately 1,500 bbl/d of load
fluid and these high rates are encouraging at this stage of clean up.
Since commencing production, the peak hydrocarbon rate is 382 boe/d,
comprising approximately 59 bbl/d of crude oil, 160 bbl/d of NGLs and
945 mcf/d of natural gas, but it is anticipated that the well is not yet
fully cleaned up. The 24 hour peak and IP 30 rates will be provided once
-- Baggett 40-2H (Fiesta) - Has been on gas lift for 11 days and is
currently flowing back approximately 1,500 bbl/d of fraccing fluid.
Measurable oil rates commenced on October 24 (North America) and as the
well stabilizes, further production rates will be provided.
-- Baggett 54-1H (Fiesta) - This well is Molopo's first well drilled in
Fiesta into Bench B. Completion commenced October 24, 2012 (North
America), with flow back expected to commence in mid-November, and
resultant hydrocarbon production anticipated prior to year end. As the
well stabilizes, flow rates will be provided.
-- Initial three exploration wells in Fiesta (Baggett 40-1H, Baggett 32 and
Parker 85) - These three wells were drilled in Fiesta in early 2012 and
continue to produce approximately 130 boe/d in aggregate. These wells
were not drilled optimally from an economic perspective, but did confirm
that the Fiesta acreage was positioned in the oil window. These wells
continue to add incremental production to Molopo's sales volumes.
-- Saskatchewan - Production from Saskatchewan is contributing
approximately 150 boe/d or 15% of Molopo's estimated sales volumes.
As additional data becomes available and performance of the wells
stabilizes, Molopo expects to spud a sixth well before the end of
calendar year 2012. The specific location and Bench selection for
future drills will be based on the performance of the previous five
This press release contains certain forward-looking statements. These
statements relate to future events or future performance of the
Company. When used in this press release, the words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe",
"estimate", "predict", "seek", "propose", "expect", "potential",
"continue", and similar expressions, are intended to identify
forward-looking statements. These statements involve known and
unknown risks, uncertainties, and other factors that may cause actual
results or events to differ materially from those anticipated in such
forward-looking statements. Such statements reflect the Company's
current views with respect to certain events, and are subject to a
number of risks, uncertainties and assumptions. Many factors could
cause Molopo's actual results, performance, or achievements to
materially differ from those described in this press release. Should
one or more of these risks or uncertainties materialize, or should
assumptions underlying forward-looking statements prove incorrect,
actual results may vary materially from those described in other
public disclosures made by the Company or this press release as
intended, planned, anticipated, believed, estimated, or expected.
Furthermore, statements relating to "reserves" or "resources" are
deemed to be forward-looking statements, as they involve the implied
assessment, based on certain estimates and assumptions that the
resources and reserves described can be produced profitably in the
future. The forward-looking statements contained in this press
release are expressly qualified in their entirety by this cautionary
declaration. These statements speak only as of the date of this press
release. The Company does not intend and does not assume any
obligation, to update these forward-looking statements to reflect new
information, subsequent events or otherwise, except as required by
Molopo Energy Limited is an oil and gas exploration and production
company listed on ASX under code 'MPO', with management based in
Calgary, Alberta, Canada. With a strong balance sheet, the Company is
predominantly focused on the development of its Wolfcamp shale oil
resource play in the Permian Basin, Texas, USA. In addition, Molopo
also has oil assets in the Williston Basin, Saskatchewan, Canada;
shale gas assets in Quebec, Canada; and onshore gas projects in South
Molopo Energy Limited
VP Capital Markets
+1.403.648.8026/+ 61 3 9618 8704 (Australia local)
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