Corcel Regulatory News (CRCL)

Caracal Energy Provides Operational Update New Discovery at Krim & Spudding of Bitanda Exploration Well Production Surpasses 11,000 bopd 2014 exploration program targeting one billion barrels CALGARY, Dec. 9, 2013 /CNW/ - Caracal Energy Inc. (LSE:CRCL) ("Caracal Energy"or the "Company") provides an operational update on its activities in Chad,which includes announcing a new discovery at Krim and the spudding of theBitanda exploration well. Executive Summary · Production ramped up significantly, delivering in excessof 11,000 gross barrels oil per day ("bopd") · On track to achieve first oil lift in Q1 2014 andsignificant production increases in the coming months · Mangara-5 development well delivered highest test flowrates seen on the Mangara field; completed as a producer. Maximum combinedproduction rate for the Cretaceous C and E sands exceeded 5,000 bopd · Krim-1 Cretaceous E sands flow tested at up to 2,580 bopd · Successful test of Krim's Cretaceous C and D sands shoulddeliver an increase in reserves · Bitanda exploration well spudded; targeting grossunrisked prospective resource of 277.2 - 648.3 million barrels ("mmbbl") · Mobilization underway to increase drilling rig count from2 to 6 rigs by end 2014 · 2014 exploration program will target 1 billion barrels ofgross unrisked prospective resources Gary Guidry, Chief Executive Officer, said: "We are on schedule for first revenue which is expected in Q1 2014. Our team,along with partners GlencoreXstrata and Société des Hydrocarbures du Tchad,have done an exceptional job of establishing continuous production into theETS. Our development drilling and construction of additional facilities andtransportation infrastructure has also continued, and we are on track toprovide additional production from Badila and Mangara fields in the comingmonths. In addition to the significant production increases expected next year, we planto test over a billion barrels in unrisked prospective resources in 2014through our high impact exploration program." Production Since achieving first oil on September 30, 2013 the Company completed thecommissioning and site acceptance testing of the lease accounting custodytransfer metering ("LACT"). The LACT measures oil quality and volume, prior todelivery into the Export Transportation System ("ETS") operated by TOTCO/COTCO.Since completing the commissioning the Company has ramped up productionsignificantly, and recently, continuously delivering in excess of 11,000 bopd. Highlights of recent production performance are as follows (all gross amounts): · 255,778 gross barrels of oil delivered during November · 354,530 gross barrels of oil delivered into the ETS as ofDecember 7, 2013 · November 2013 average production of 8,526 bopd · 11,124 bopd current production; averaged 11,138 bopd last10 days Current production is being used for pre-revenue pipeline fill line, now 76%per cent complete, and the Company is on track to achieve its first lifting ofoil in Q1 2014. Additional fluid processing and shipping facilities are currently beingcommissioned with additional production from the Badila field scheduled to comeon stream this month. Caracal Energy expects significant further increases inproduction during 2014 from Badila as well as from the nearby Mangara field. Exploration and Development The Company has commenced the mobilization process for an additional fourdrilling rigs, bringing the total rig count to six drilling rigs by the end of2014. In addition, two completion rigs will be mobilized during 2014, bringingthe total completion rig count to three. In total, the Company anticipatestargeting over a billion barrels of unrisked prospective resources in 2014. Krim: Exploration well a new discovery Krim exploration well ("Krim-1") was declared a discovery on November 4, 2013.The Krim field is located immediately southwest of the Mangara field, and thetargeted zones were the Cretaceous C, D and E sands. Due to the proximity to infrastructure, the Company and its partners believethey can fast track Krim's development. Depending on routing, Krim-1 isapproximately 5-10 kilometers from the pipeline at Mangara. Pre-drilling, Krim gross unrisked prospective resource as per McDaniel &Associates Ltd. resources evaluation dated June 30, 2013 ("McDaniel ResourceReport") were 29-64 mmbbl on unrisked Pmean and P10 basis, respectively. The Cretaceous E sands were tested at up to 2,580 bopd over the followingintervals: Interval Maximum Flowing Choke Total Flow Gas-Oil Gravity Productivity (mKB) Oil WHP Size Duration Ratio (Deg Index Rate (psig) (in.) (hr) (scf/ API) (bopd/psi) (bopd) stb) E (2,581.5 2,580 120 64/64 28.8 100 34 - 37 4.3 - 2,630) The McDaniel & Associates Ltd. reserves evaluation dated September 30, 2013("McDaniel Reserves report"), attributed gross 2P reserves of 6.0 mmbbl toKrim's E sands, with gross 3P reserves of 10.1 mmbbl. The well was suspended following the Cretaceous E sands test, as the completionrig was required to test and complete Badila-4 (below) for production. Thecompletion rig has now returned to Krim to complete the testing of theCretaceous C and D sands later this month. The estimated pay from petrophysicalinformation is 45.5 meters for the C sands and 105 meters for the D sands.Upon a successful test from the C and D sands, the Company expects an increasein reserves as currently no reserves are assigned to these sands. This willrequire the construction of a 5-10 km tie-in to the existing Mangara-Badilapipeline. Bitanda: Exploration Well The Bitanda exploration well ("Bitanda") was spudded on December 5, 2013. Theplanned total drilling depth is 2,390 meters and drilling is expected to take32 days. The current operation is drilling at 700 meters. Bitanda is the third exploration test well following the recent success at Krimand the Cretaceous E sands in the Mangara field. Bitanda was recently confirmedas a structural three-way closure, bounded by the basin margin fault using the3D seismic shot earlier this year. Pre-drill, McDaniel Resource Reportestimated gross unrisked prospective resource of 277.2-648.3 mmbbl on unriskedPmean and P10 basis, respectively. Bitanda is approximately 19 kilometers from the Badila field, and pipelineconnection. Mangara-5: Combined Development and Exploration Drilling The Mangara-5 well was spudded on May 16, 2013 and drilled to a total depth of3,339 meters. The primary objective of the well was to deliver production fromthe Cretaceous C sands. The secondary objective was to flow test and evaluatethe prospective resource of the Cretaceous E sands, located in the easternfault block of the Mangara field. Pre-drill McDaniel Resource Report attributedgross unrisked prospective resource of 24.6-58.0 mmbbl on Pmean and P10 basis,respectively, to the eastern fault block. Prior to completing the well as a Cretaceous C sands producer, well testingconfirmed the light oil production potential of the Cretaceous E, with testingresults as follows: Interval Maximum Flowing Choke Total Flow Gas-Oil Gravity Productivity (mKB) Oil WHP Size Duration Ratio (Deg Index Rate (psig) (in.) (hr) (scf/ API) (bopd/psi) (bopd) stb) E (2,474 - 1,917 160 64/64 53 100 35 - 39 1.7 2,669) C (1,896 - 3,200 200 80/64 45.3 540 35 - 37 2.2 2,103.5) The test rates from both the C and E sands are the highest test rates achievedby the Company and past operators to date on the Mangara field. The well hasbeen initially completed as a Cretaceous C sands producer. Caracal's netinterest in the Mangara field is 50%. Mangara-6: Combined Development and Exploration Drilling The Mangara-6 well was spudded on November 19, 2013. The planned total drillingdepth is 3,302 meters and drilling is expected to take 50 days. The currentoperation is coring the Cretaceous C sands at 2,081 meters. Mangara-6 has a primary objective of developing Probable reserves in theCretaceous C sands. After the recent exploration success of the Cretaceous E inMangara-5, the Mangara-6 well will be drilled to basement to test additionalprospective resources in the western fault block of the Mangara field.Pre-drill, McDaniel Resource Report estimated gross unrisked prospectiveresource for the western fault block of 14.5-35.2 mmbbl on Pmean and P10 basis,respectively. Kibeaand Beche: Seismic Acquisition The Company has started mobilizing a seismic contractor to shoot 2D and 3Dseismic. Much of the planned 1,500 line-kilometers of 2D seismic will befocused on well placement for structures to be drilled in the 2014-2016exploration programs as well as identifying additional prospects currently notcaptured in the Company's estimates. Of the planned 700 square kilometers ("Km2") planned for 2014, 400 Km2 will befocused on the Kibea discovery and nearby Beche exploration area, whichincludes three prospects similar to the discovery at Kibea. Kibea is a lightoil discovery (33 - 35 degrees API) with 45.9 mmbbl of gross 2P reserves, and105.0 million barrels of gross 3P reserves according to the McDaniel ReservesReport1. According to the McDaniel Resource Report, gross prospective resourcesbelow the Kibea discovery are 20.0-38.4 mmbbl on Pmean and P10 basis,respectively. The nearby exploration prospects Beche, Beche-B and Beche-C have gross unriskedprospective resource estimates as follows: Prospect P90 P50 Pmean P10 (MMbbl) (MMbbl) (MMbbl) (MMbbl) Beche 38.8 116.1 169.7 358.0 Beche-B 25.4 79.3 116.8 244.2 Beche-C 32.7 95.9 141.5 300.8 TOTAL 428.0 Logistics preparation and execution is underway to move a drilling rig to theKibea - Beche area by May 2014 to drill 3-4 wells by November 2014. Beche is onthe proposed pipeline route to develop the Kibea field. Badila-4: Development drilling The Badila-4 appraisal well was drilled to a total depth of 2,272 meters andsuspended for testing and completion. As petrophysical information from theprimary target Cretaceous D was preliminarily interpreted as disappointing, theMcDaniel Reserves Report required for the recent financing, assumed the wellwould be wet (100% water) and downgraded Cretaceous D sands reservesaccordingly. Subsequent to the McDaniel Reserves Report, the testing results of theCretaceous D sands is as follows: Interval Maximum Flowing Choke Total Flow Gas-Oil Gravity Productivity (mKB) Oil WHP Size Duration Ratio (Deg Index Rate (psig) (in.) (hr) (scf/ API) (bopd/psi) (bopd) stb) D (1841 - 234 5 64/64 51 Not 37 2.5 1893) measured This encouraging test will be used to re-evaluate the potential D sands oilreserves in the Badila-4 area as a part of the yearend reporting cycle. An encouraging new secondary oil zone in the Upper Cretaceous A sands was alsotested in Badila-4. This zone has been extensively mapped in the Badila fielddevelopment area using the new 3D seismic information, and Badila-4 is thefirst test of this new reservoir. The testing results of the Upper Cretaceous A sands are summarized below: Interval Maximum Flowing Choke Total Flow Gas-Oil Gravity Productivity (mKB) Oil WHP Size Duration Ratio (Deg Index Rate (psig) (in.) (hr) (scf/ API) (bopd/psi) (bopd) stb) A (1017 - 743 45 48/64 58 Not 22 2.5 1040) measured The A sands are located at approximately 1,030 meters and will be lower cost todevelop. The well was subsequently completed for production from the UpperCretaceous A. Badila-5: Development drilling The Badila-5 well was drilled to a total depth of 2,066 meters. Companyanalysis of the petrophysical results from the well suggests net pay of 64.4and 58.4 meters in the Cretaceous C and D sands, respectively. The testing results of the Cretaceous C sands are as follows: Interval Maximum Flowing Choke Total Flow Gas-Oil Gravity Productivity (mKB) Oil WHP Size Duration Ratio (Deg Index Rate (psig) (in.) (hr) (scf/ API) (bopd/psi) (bopd) stb) C (1,441 - 3,114 155 64/64 58 26 34 - 35 18.1 1,497) The well was subsequently completed for production from the Cretaceous D, andwith artificial lift-assist expected to produce in excess of 5,000 bopd. BothBadila 4 and 5 are expected to commence production before year-end. Construction Projects MangaraDevelopment The 97 kilometers of 12" oil and 6" natural gas shipping pipelines from Mangarato Badila are nearing completion. Final hydro testing is expected to becompleted by the end of December. Accommodation for the approximate10-kilometer natural gas spur pipeline, to supply the new natural gas poweredelectrical generation station for the city of Moundou, is in place. The spurwill be completed in 2014 as an integral component of the electrical powergeneration construction and commissioning project. Commissioning of the Mangara field central processing facility ("CPF") and thesouthern processing terminal ("SPT") is underway. The SPT is scheduled to becompleted during December and will temporarily process additional Badila crudeoil until the Badila expansion is completed and the Mangara field is brought onstream during the first half of 2014. Blending and Shipping Terminal Commissioning of the blending and shipping terminal is underway, and expectedto be on-stream in December. The terminal is owned and operated by PetroChadTransportation Company ("PCT"), which is owned by Caracal Energy (66 2/3%) andGlencoreXstrata (33 1/3%). PCT operates under an Inland Transportation Authorization, as prescribed in theProduction Sharing Contracts. The terminal will be able to blend and ship25,000 bopd until the second half of 2014, when the expansion to 50,000 bopdwill be completed. About Caracal Energy Inc. Based in Canada, Caracal Energy Inc. is an international exploration anddevelopment company focused on oil and gas exploration, development andproduction activities in the Republic of Chad, Africa. In 2011, the Companyentered into three production sharing contracts ("PSCs") with the government ofthe Republic of Chad. These PSCs provide exclusive rights to explore anddevelop reserves and resources over a combined area of 26,103 km2 in southernChad. The PSCs cover two world-class oil basins with oil discoveries, andnumerous exploration prospects. The Company's shares trade on the London Stock Exchange under the symbol CRCL. Cautionary Statements Certain information in this press release constitutes forward-lookingstatements under applicable securities law. Any statements that are containedin this press release that are not statements of historical fact may be deemedto be forward-looking statements. Forward-looking information and statementsare often, but not always, identified by the use of words such as "anticipate","seek", "believe", "expect", "hope", "plan", "intend", "forecast", "target","project", "guidance", "may", " might", "will", "should", "could", "estimate","predict" or similar words or expressions suggesting future outcomes orlanguage suggesting an outlook. Specific forward looking statements included inthis press release include comments related to the expected timing of pipelinecompletion and facilities advancement; potential production rates; timing ofthe pipeline-fill and tie-in for production; expected completion of wellservicing operations; additional development of the Mangara and Badila field;expected drilling of the other prospects; and other matters. Subject toapplicable securities laws, the Company does not undertake any obligation torevise this forward-looking information or these forward-looking statements toreflect subsequent events or circumstances. The forward-looking information andstatements contained in this press release are expressly qualified by thiscautionary statement. Well-test results and production rates are notnecessarily indicative of long-term performance or of ultimate recovery. _________________________1 McDaniel Report effective September 30, 2013 SOURCE: Caracal Energy Inc. For further information: Caracal Energy Inc.Gary Guidry, President and Chief Executive OfficerTrevor Peters, Chief Financial Officer403-724-7200 Longview Communications - Canadian Media EnquiriesAlan BaylessJoel Shaffer604-694-6035416-649-8006 FTI Consulting - UK Media EnquiriesBen Brewerton / Ed Westropp / Georgia Mann+ 44 (0) 207 8313 3113caracalenergy.sc@fticonsulting.com

(CRCL)