Molopo Announces 2013 Capital Budget and Outlook

Molopo Announces 2013 Capital Budget and Outlook 
CALGARY, ALBERTA -- (Marketwired) -- 04/08/13 -- Molopo Energy
Limited (ASX:MPO) ("Molopo" or the "Company") today announces its
2013 capital expenditure budget and outlook. All dollar figures
quoted herein are US dollars.  
Following the appointment of Steve Cloutier as Managing Director and
Chief Executive Officer in January, Molopo undertook a review of the
execution of the Company's North American strategy. This process was
implemented primarily to assess the optimal deployment of Molopo's
remaining cash balances relative to the continued development of its
Permian Basin lands in West Texas, where the Company holds an
interest in approximately 26,000 net acres prospective in the
Wolfcamp shale oil play. At March 31, 2013 the Company had
approximately $64 million in cash, which reflects payment of the
remaining costs related to the Company's 2012 drilling and
completions program.  
Although capital investment in the Wolfcamp during calendar year 2012
resulted in a significant production increase relative to prior
year-end levels, higher costs and lower initial production rates did
not match estimates. Accordingly, while Molopo continues to believe
that the Wolfcamp offers significant potential value for its
shareholders, its board of directors has approved a capital
expenditure budget for 2013 and a go-forward plan that reduces
drilling activity and focuses on cash preservation. Concurrently, the
Company will be retaining a financial adviser to assist it in the
identification of potential strategies for maximizing the value of
its Wolfcamp land and production for the benefit of its shareholders
(the "Wolfcamp Value Maximization Process"). 
Molopo's 2013 capital expenditures will be allocated predominantly to
activities that preserve the Company's acreage and will be timed so
that minimal capital will be spent while it moves forward with the
Wolfcamp Value Maximization Process. 
Highlights of the 2013 capital budget are as follows: 

--  Up to $10.3 million allocated to lease-preservation initiatives in both
    Molopo's Barnhart and Fiesta areas. These include the potential drilling
    of a north-south well in Barnhart during the fourth quarter (estimated
    cost to drill, equip and tie-
in of $5.0 million); and extensions on
    Fiesta leases scheduled to reach the end of their primary terms between
    April 2013 and January 2014, in an estimated aggregate amount of $5.3
    million. As stated above, the Wolfcamp Value Maximization Process may
    result in some of these expenditures not being incurred by Molopo. 
--  Approximately $1.5 million allocated to the drilling of two water
    disposal wells (one each at Fiesta and Barnhart) during the third
    quarter. Since these wells help reduce operating costs, it is
    anticipated that these operations will be conducted regardless of the
    outcome of the Wolfcamp Value Maximization Process. 
--  Approximately $1.5 million to release the Wolfcamp drilling rig that
    Molopo had contracted in mid-2011 and into 2012, in contemplation of a
    more active capital program. 
--  Approximately $0.5 million to conduct pressure work on existing Wolfcamp
    wells during the second quarter which will provide additional data to
    assist with the on-going calibration of the drilling and completions

Molopo does not anticipate allocating significant development capital
during 2013 to its other operating areas. In that regard, the
Company's plans are as follows: 

--  By way of joint venture, farm-out or sale, Molopo will be actively
    seeking the disposition of all or a portion of its lands at Weyburn,
    Estevan, Torquay, Taylorton, Macoun and Steelman in South East
    Saskatchewan, Canada (approximately 47,000 net undeveloped acres
    prospective for oil in the Midale formation), and at Virginia and
    Evander in the Republic of South Africa (approximately 900,000 net
    undeveloped acres prospective for gas). 
--  In Quebec, Canada (1.4 million acres in the St. Lawrence Lowlands Utica
    Shale), the Company will not be required to spend any capital until a
    moratorium on fraccing is lifted by the provincial government.
    Accordingly, Molopo intends to retain its interests until further

Given the foregoing activity level, the Company expects its 2013
production to average 700-750 barrels of oil equivalent ("boe") per
day, comprised 30% of crude oil, 25% of natural gas liquids and 45%
of natural gas (exit 2012 production was approximately 950 boe/d).
This estimate does not take into account any of the business
development processes listed above; but does assume that Molopo will
drill one Wolfcamp well at Barnhart during the fourth quarter, as
outlined above (with no impact on 2013 average production rates). 
In conjunction with execution of the capital budget and consistent
with the over-all goal of cash preservation, Molopo will be
undertaking an initiative to reduce general and administrative
Deployment of Remaining Cash Resources 
Molopo's cash resources represent a significant asset that Molopo is
committed to allocating prudently. Pending the outcome of the
above-noted initiatives, the cash could be considered for provision
to Molopo's share of joint venture drilling in the Wolfcamp (if any);
potential distribution to shareholders (in an amount and at a time
yet to be determined); a share buy-back; or a combination of the
foregoing. At this time, it is not anticipated that any capital will
be deployed into acquisitions. 
Conference Call 
Steve Cloutier, Managing Director and Chief Executive Officer, will
host a conference call to discuss the 2013 budget and outlook on
April 9 (Australia) / April 8 (North America). The call will be open
to analysts, investors, and all interested parties. Details to access
the call follow: 

Location     Date         Time             Access Details                   
Australia/   Tues 9       9:30am EST /     0011-800-2787-2090 Toll free     
 New         April 2013   7:30am WST                                        
North        Mon 8        7:30pm ET /      1-877-440-9795 Toll free         
 America     April 2013   5:30pm MT        +1 (416) 340-8530 Toronto local /
                                           International Dial-In            
Internet access - live and recorded 
 webcast (available until Apr. 8, 2014)                                     

Participants in the U.K and most European countries may access the
call by dialing 00-800-2787-2090.  
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 e
vents 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
Steve Cloutier
Canada: +1.403.264-7778 or Australia: +(61 3) 9618 8722 
Molopo Energy Limited
Cindy Gray
VP Capital Markets
Canada: +1.403.264-7778 or Australia: +(61 3) 9618 8722 
Molopo Energy Limited - Registered Office
c/- First Advisers Pty Ltd
Suite 604, Level 6, 309 Kent Street Sydney,
NSW 2000 Australia
P.O. Box H206, Australia Square NSW 1215
Telephone: (61 3) 9618 8722 / Facsimile: (61 2) 8011 0359
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