CALGARY, Dec. 31, 2012 /CNW/ - Petromanas Energy Inc. ("Petromanas" or the
"Company") (TSXV: PMI) today provided an update on its Albanian drilling
program and its previously announced acquisition of Gallic Energy Ltd.
("Gallic") (TSXV: GLC).
The Juban-1 well was spud on November 23, 2012 and reached a depth of 1,716
metres on December 27, 2012. The hole was logged once this target depth was
reached. Logging operations were completed December 30, 2012. Information
gathered through the logging program indicated negligible quantities of
hydrocarbons were present and the Company has decided to plug and abandon the
well. Petromanas holds a 100% working interest in Blocks A-B and total costs
to drill the well to a depth of 1,716 metres were approximately US$6.5
million, approximately two million dollars less than the US$8.6 originally
The Shpirag-2 well reached the top of the target carbonate reservoir zone at
approximately 4,750 metres in late December 2012. The Company has set casing
to the top of the objective to put the less stable Flysch shale that overlies
the target carbonate behind pipe. The well is now drilling ahead in the
carbonate reservoir. Petromanas plans to penetrate the carbonate to
sufficiently evaluate the reservoir potential. Testing is expected to follow
reaching total depth. Total costs to drill the well to total target depth of
6,100 metres are estimated at US$44 million gross, US$9 million net to
"We drilled the Juban-1 well based on extensive geological analysis of
potential analog structures with the hope of identifying commercially viable
accumulations of hydrocarbons outside areas of current production," said Mr.
Glenn McNamara, CEO of Petromanas. "Juban-1 was a high risk exploration well
with an estimated chance of success of less than 20% since there is no
existing petroleum system in northern Albania and, while this result is not
what we hoped for, we believe we have been able to cost effectively obtain an
initial assessment of the potential of this area. Our drilling program
continues to advance with the Shpirag-2 well drilling ahead into the carbonate
reservoir and we remain optimistic with respect to the potential of Blocks
Petromanas has completed the Environmental and Social Impact Assessment (ESIA)
and civil engineering work at two additional potential drilling locations on
Blocks 2-3. Upon receiving environmental permits from the Albanian Government,
the Company will apply for the required civil construction permits to build
access roads and well sites as developments dictate.
Seismic contractor Geotec Spa of Italy completed shooting a test seismic line
in mid-December and subsequently demobilized its crew. The test line will help
determine the final shot parameters for the balance of the Company's 400-500
kilometre 2D seismic program, expected to be completed in late 2013.
Petromanas and its partner are evaluating alternative shot hole depths and
charge sizes to optimize data quality and manage costs. The test program
results have the potential to reduce future seismic costs in the area.
Under the terms of the Company's Farm-Out Agreement with Royal Dutch Shell
plc, Shell will carry the first $20 million dollars of this seismic program
with any excess amount shared equally by both parties. Petromanas has
concluded the tender process with contractors for the next stage of the
seismic program and will be awarding the contract upon the conclusion of final
negotiations with the preferred contractor.
Following ongoing discussions with the Albanian Government, Petromanas has
requested and is awaiting approval of a one-year extension to complete its
commitments for Period 2 under the Production Sharing Contract ("PSC") for
Blocks D-E. In December, the Albanian Ministry of Economy, Trade and Energy
("METE" or the "Ministry") acknowledged receipt of the request and formally
asked for a draft PSC amendment to be filed with the Ministry. Once METE
approves the amendments to the PSC, it will be submitted to the Albania
Council of Ministers for ratification. The Company previously provided the
Albanian Government with a standby letter of credit for $6.3 million in
support of its Period 2 performance guarantee, which remains in force. Once
the extension is approved, Petromanas would have until December 25, 2013 to
complete its obligations on Blocks D-E under the amended PSC. The Company
intends to use the information gathered from its current drilling programs to
determine how best to meet its commitments for Period 2. The Company
considers Blocks D-E to be of higher risk than Blocks 2-3 and relatively
costly to explore based on the lower prospective resource volumes allocated to
the Papri prospect.
Petromanas is in the final stages of closing the previously announced business
combination whereby Petromanas is acquiring 100% of the issued and outstanding
class A shares of Gallic, in exchange for common shares of Petromanas, by way
of a statutory plan of arrangement (the "Arrangement").
As previously disclosed, the Arrangement was approved by Gallic shareholders
and warrantholders at a special meeting held on December 13, 2012. Gallic also
received the final approval of the Court of Queen's Bench in respect of the
Arrangement following its application to the Court on December 14, 2012. It is
anticipated that the Arrangement will close later today. Information
concerning the Arrangement is set out in Gallic's information circular (the
"Circular") dated October 30, 2012 that was mailed to all Gallic shareholders
and warrantholders. A copy of the Circular is available electronically under
Gallic's issuer profile on SEDAR at www.sedar.com.
About Petromanas Energy Inc.
Petromanas Energy Inc. is an international oil and gas company focused on the
exploration and development of its assets in Albania. Petromanas, through its
wholly-owned subsidiary, holds three Production Sharing Contracts ("PSCs")
with the Albanian government. Under the terms of the PSCs, Petromanas has a
100% working interest in Blocks A, B, D, and E and a 50% working interest in
Blocks 2 and 3 that comprise more than 1.4 million gross acres across
Albania's Berati thrust belt.
The foregoing information contains forward-looking information relating to the
future performance of the Company, including but not limited to the timing and
drilling of the Juban-1 and Shpirag-2 wells, the costs of drilling, the
Company's current exploration activities, including the 2013 seismic program,
the timing with respect to government permit applications, receipt of the
one-year extension in respect of the Company's commitment for Period 2 under
PSC on Blocks D-E, and the anticipated timing of the closing of the
Arrangement. Forward looking information is subject to a number of known and
unknown risks, uncertainties and other factors that may cause actual results
to differ materially from those anticipated in our forward looking
statements. Such risks and other factors include, among others, the actual
results of exploration activities, changes in world commodity markets or
equity markets, the Company's ability to identify, attract, obtain and retain
industry partners, access to capital, access to drilling rigs, seismic
equipment and operational personnel, the risks of the petroleum industry
including, without limitation, those associated with the environment, delays
in obtaining governmental approvals, permits or financing or political risks
in the completion of development or construction activities, title disputes,
change in government and changes to regulations affecting the oil and gas
industry, risks associated with exploration activities and other risks and
uncertainties detailed from time to time in the Company's filings with the
Canadian securities administrators (available at www.SEDAR.com).
Forward-looking statements are made based on various assumptions and on
management's beliefs, estimates and opinions on the date the statements are
made. Should one or more of these risks and uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in the forward-looking information contained
herein. The Company undertakes no obligation to update forward-looking
statements if these assumptions, beliefs, estimates and opinions or other
circumstances should change, except as required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Glenn McNamara, CEO Hamid Mozayani, COO Bill Cummins, CFO Petromanas Energy
Inc. Suite 1720, 734 - 7th Avenue SW Calgary, Alberta Canada T2P 3P8 Tel: +1
403 457 4400 Fax: +1 403 457 4480 Email:email@example.com
Website:www.petromanas.com Nick Hurst The Equicom Group 300 - 5th Avenue
SW, 10th Floor Calgary, Alberta Canada T2P 3C4 Tel: +1 403 218 2835 Fax: +1
403 218 2830 Email:firstname.lastname@example.org
SOURCE: Petromanas Energy Inc.
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