Molopo Energy Announces Preliminary Well Results from 54-1H

Molopo Energy Announces Preliminary Well Results from 54-1H 
CALGARY, ALBERTA -- (Marketwire) -- 12/20/12 -- Molopo Energy Limited
(ASX:MPO) today announces preliminary results from our Baggett 54-1H
well, the first Bench B well drilled in our Fiesta acreage, as well
as our expected 2012 exit production rate. 
The well has been on gas lift for 34 days, producing for a total of
800 hours. Through this period, the well has performed consistently
with other wells drilled in the Fiesta area, and these results will
contribute to Molopo's ongoing development strategy in Fiesta. Since
flow back of the well commenced, the peak 24 hour hydrocarbon
wellhead rate thus far is 431 boe/d, comprising approximately 87
bbl/d of crude oil, 175 bbl/d of NGLs and 1,015 mcf/d of natural gas.
In general, the wells are tending to produce a higher proportion of
natural gas and lower initial production rates but appear to exhibit
a flatter decline curve than originally anticipated. Understanding
each of these characteristics and the impact on our economics is key
as we develop our 2013 capital and operating budget. 
Although the well results from 54-1H are preliminary, the information
obtained from this and the two other wells drilled in Fiesta in the
latter half of calendar year 2012 provides valid well performance
from both Bench A and Bench B. Having actual data from wells drilled
on our acreage supplements data available from other operators'
Wolfcamp wells, and enables Molopo to proceed with finalizing our
budget. 
Once production commences from Barnhart 24-2H, the final well drilled
in calendar year 2012, we will incorporate data from all well results
into the budget and have a program designed to achieve economic
growth in production and reserves. The team is focused on driving
overall program costs down to further enhance the overall economics
of the play. We anticipate releasing details of this budget in early
2013 upon approval by the Board. 
Early in 2012, Molopo set a projected exit production rate which was
based on production contributions from all 6 wells to be drilled in
the latter half of 2012, and also assumed well performance consistent
with type curves originally seen in the area. Due to timing delays,
as well as variability in well performance, Molopo now expects to
exit the year with a production level of approximately 1,000 boe/d.
This exit production level is an increase of approximately 650% from
the prior year's exit rate, and positions the company well to
continue pursuing production and reserves growth. 
The Wolfcamp is an emerging resource play that is effectively still
in its infancy. With only 2-3 years of development behind it,
operators in the area continue working to understand the play and
execute optimal strategies for economically developing the vast
resource within it. Work done to date demonstrates that the Wolfcamp
is not homogenous and that variability of results should be expected
across different parts of the play, and even across different parts
of the same land block. Our focus in the Wolfcamp will be to continue
investing capital prudently, to increase our production, reserves and
cash flow, and to position Molopo for long term growth. Based on
results to date, we believe our Wolfcamp assets can deliver
attractive rates of return to the Company and its shareholders. 
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
law.
Contacts:
Molopo Energy Limited
Cindy Gray
VP Capital Markets
+1.403.648.8026 / + 61 3 9618 8704 (Australia local)
investorrelations@molopo.com.au
www.molopo.com.au
 
 
Press spacebar to pause and continue. Press esc to stop.