12 Jan 2017 07:00
Mayan Energy Limited - Operations UpdateMayan Energy Limited - Operations Update
PR Newswire
London, January 11
Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil & Gas
12 January 2017
Mayan Energy Ltd (“Mayan” or “the Company”)
Shoats Creek update and restart of production at Oklahoma Energy
Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company, is pleased to announce an update on its operations at the Shoats Creek Field in Louisiana (“Shoats Creek”), and of the recommencement of production at Oklahoma Energy (“OKE”). This announcement is in line with Mayan’s strategy to increase production by transforming Shoats Creek into a multi-well oil and gas operation, and also enhancing the value of its portfolio of non-core assets pending their further development or disposal:
Shoats Creek
Lutcher Moore (“LM”) 14 was the first well to be connected to the newly installed gas line (see RNS of 14 October 2016). However, after discovering that a hole has developed in the tubing allowing water to flow upwards from Cockfield 4, gas production has now become blocked. Remedial work – including going to the well, pulling tubing and packer to isolate the water with a cast iron steel plug will be required. Further announcements will be made when the Company makes progress in this regard; LM 20 has been connected to the gas line – production is yet to stabilise at a consistent rate due to a variety of down-hole factors. The Company estimates that stable production in the region of 70 barrels per day (bopd) from LM 20, will, in due course be achieved; this will be 14 bopd net to Mayan. The Company will update the market when this has been achieved; LM 13 has been tested with a view to ascertaining its viability for inclusion in the roll out of the Company’s multi well re-entry program. A Rok Quad Neutron Log was used to test LM13 with the objective of ascertaining the viability of the well as a re-entry candidate. This revealed the existence of two potentially material pay formations at 2,600 and 2,900 foot. These potential new formations had previously been regarded as water however the technology afforded by the Rok Quad Neutron Log makes it highly likely that they may indeed potentially productive sources of oil, and if so may be comparable to the Frio formation which is located at twice the depth. The Company will be looking for parties to come in on the exploration of these formations, with the intention of derisking further development of this prospect. Further announcements will be made when the Company makes progress in this regard.Mayan has a 70.00% working interest (“WI”) and 52.78% net revenue interest (“NRI”) in LM14, a 20.00% WI and 15.08% NRI in LM 20 in respect of oil, and a 70.00% WI and 52.78% NRI in respect of gas, and 70.00% WI and 52.78% NRI in LM 13. In respect of the LM 13 2,600 and 2,900 foot formations, Mayan presently has a 100.00% WI and 75.4% NRI.
Oklahoma Energy (“OKE”)
As part of efforts to unlock value for the benefit of shareholders, a review was made of non-core assets with the intention of ascertaining whether value could be enhanced. In the case of its OKE assets in Oklahoma (See RNS 1 July 2013), it was determined that if inherited obligations to Blue Rock Capital, LLC namely royalties of 41.5 % of gross revenues could be restructured, the field could be economic to Mayan. Following negotiations with Blue Rock, agreement in principal has been reached that they would reduce their Royalty Payment from 41% to 5%; further the contingent liability due to Blue Rock of USD1.5 Million (as reduced by royalty payments from production) would be waived in exchange for a 10% stake of sale proceeds of the asset up to USD 200,000 and a 50% stake of proceeds in excess of USD 200,000.
Present production from OKE is 8 bopd, and it is hoped that for a modest capital investment of USD 30,000 this can be increased to 30 bopd. Mayan has 100% WI in OKE and NRI of 75%.
Commenting on the above Eddie Gonzalez said: “Working with re-entries and bringing back older fields is challenging. However, I am encouraged by the steady progress we have made, and the prospects for upside that we have developed over the last few months. And with the uptick in oil prices and higher growth expectations in recent months, I remain upbeat about the future”.
**ENDS**
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information visit www.Mayan energy.com or contact the following:
| Eddie Gonzalez | Mayan Energy Ltd | + 1 469 394 2008 |
| Charlie Wood | Mayan Energy Ltd | +44 7971 444 326 |
| Roland Cornish | Beaumont Cornish Ltd | +44 20 7628 3396 |
| James Biddle | Beaumont Cornish Ltd | +44 20 7628 3396 |
| Elliot Hance | Beaufort Securities Ltd | +44 20 7382 8300 |
| Nick Bealer | Cornhill Capital Limited | +44 20 7710 9612 |
| Elisabeth Cowell | St Brides Partners Limited | +44 20 7236 1177 |
Notes:
Mayan Energy Limited is an AIM listed (London Stock Exchange) oil and gas energy company with a vision of building a midstream service (oil and gas waste management) and downstream operations business in Mexico, exploiting the opportunities arising from the liberalisation of that country’s energy sector. This vision will complement the Company’s present operations which are focussed on the redevelopment and enhancement of its upstream oil and gas interests in Oklahoma and Louisiana.