Corcel Regulatory News (CRCL)

Caracal Energy Provides Operational Update and 2014 Guidance CALGARY, Jan. 20, 2014 /CNW/ - Caracal Energy Inc. (LSE: CRCL) ("CaracalEnergy" or the "Company") provides an operational update on its activities inChad and 2014 guidance. Executive Summary - Production has increased to approximately 12,000 gross barrels oilper day ("bopd"); - On track to achieve first oil lifting in Q1 2014; - Commissioned the Southern Processing Terminal ("SPT"); - Continued construction of the Mangara Central Processing Facility(the "CPF"), 12 inch oil pipeline and 6 inch gas pipeline, all of which areexpected to be completed in Q1 2014; - Ordered long lead facilities for the Badila expansion; - Placed Badila-4 and Badila-5 on production at maximum producing ratesof approximately 1,000 and 5,000 bopd respectively; - Mangara-6 development well was spud on November 19, 2013 and drilledto a depth of 3,109 meters ("m"). Petrophysical evaluation in the LowerCretaceous C sands ("C sands") proved the zone to be oil bearing. A Drill StemTest ("DST") over the Lower Cretaceous E sands ("E sands") successfully flowedoil to surface. The Company cored 18m of E sand, which showed clear signs ofoil pay. The Company believes that the E sands could have a positive impact onreserves; - Production flow tests conducted over the Krim-1 C sands measuredrates as high as 1,470 bopd and the D sands flow tested at up to 702 bopd. Noreserves were assigned to these C and D sands in the report by McDaniel &Associates Consultants Ltd., an independent qualified reserves evaluator,("McDaniel")(1); - Drilled and cased the Bitanda-1 exploration well, which was spud onDecember 5, 2013, and was rig released on December 31, 2013. Based onpetrophysical interpretation, there is a potential of 38 m of net reservoirinterval in the Upper Cretaceous M sands and 66 m in the D sands, which will besubsequently tested; - Commenced the 2014 2D and 3D seismic acquisition program; - Finalized rig contracts and received definitive rig schedule from therig contractor for an additional four drilling rigs and two completion rigs,bringing the total to six drilling rigs and three completion rigs; - 2014 guidance of $475 -$525 million net capital expenditures ($375-$425 million net of the remaining $100 million GlencoreXstrata plc carry),22,000 - 26,000 bopd annual average gross production (11,000 - 13,000 bopdworking interest production) and funds flow from operations of $220 - $270million. Gary Guidry, Chief Executive Officer, said: "We continue to increase production as additional wells are brought on streamand facilities are commissioned. We are forecasting a 2014 exit rate of 40,000to 45,000 bopd, an approximate 270 percent increase to the 2013 exit rate.While we did not achieve our 2013 exit rate of 14,000 bopd, with the recentcommissioning of the South Processing Terminal, we anticipate meeting thistarget by the end of January. With the signing of the drilling rig contract, wehave visibility on our 2014 and 2015 drilling program. We continue to be onschedule to move a drilling rig to the Doseo Salamat area at the end of thefirst quarter of 2014, which contains the Kibea discovery and targetsapproximately a billion barrels out of the total 4.1 billion barrels of grossmean unrisked prospective resources(2)". Production Between December 1, 2013 and January 18, 2014, gross production averaged 11,274bopd with current production of approximately 12,000 bopd from Badila-1, 2, 4and 5. The Company experienced facility challenges, primarily the ability tohandle water. These issues have been resolved through additional tankage andthe commissioning of the SPT. The Company remains on schedule for its first lifting from the oil exportterminal in Kribi, Cameroon during March 2014. Caracal's entitlement of thefirst lifting will be approximately 560,000 barrels ("bbls"). Exploration and Development - Drilling The Company contracted additional rigs for arrival on the following definitivedates: Rig Size Delivery date GW 60 (Drilling) 1200 HP May 2014 GW 61 (Drilling) 1200 HP August 2014 GW 63 (Drilling) 1200 HP September 2014 GW 64 (Drilling) 1200 HP September 2014 GW 102 (Completion) 750 HP May 2014 GW 103 (Drilling & Completion) 750 HP June 2014 Krim-1 Exploration Well Update As previously disclosed in the December 9th, 2013 press release, the LowerCretaceous E sands were tested open hole at up to 2,580 bopd over the followingintervals: Interval Maximum Oil Flowing Choke Total Flow Gas-Oil Gravity(mKB) Rate* WHP Size Duration (hr) Ratio (Deg API) (bopd) (psig) (in.) (scf/stb) E (2,582 - 2,630) 2,580 120 64/64 29 100 34 - 37 * - A total of 921 bbls of oil and 8 bbls of water/completion fluid recovered In addition to the above test, the Company recently successfully tested the Cand D sands. The flow rates are summarized below: Interval Maximum Oil Flowing Choke Total Flow Gas-Oil Gravity(mKB) Rate WHP Size Duration (hr) Ratio (Deg API) (bopd) (psig) (in.) (scf/stb) C (2,012-2,166) 1,470* 140 96/64 38 519 36 D (2,219-2,520) 702** 120 1/2 38 - 35 * - A total of 1,600 bbls of oil and less than 1 bbl of water/completion fluidrecovered ** - A total of 557 bbls of oil and 1 bbl of water/completion fluid wererecovered. There was no evidence of water or pressure depletion during the tests of the C,D and E sands. There are currently limited reserves assigned to the E sands andno reserves assigned to the C and D sands(1). Bitanda-1: Exploration Well Update The Bitanda exploration well ("Bitanda-1") was spud on December 5, 2013. Thewell reached total depth of 2,497 m on December 20, 2013 and the rig wasreleased on December 31, 2013. Based on petrophysical interpretation, there isa potential of 38 m of net reservoir interval in the Upper Cretaceous M sandsand 66 m in the D sands, which will be subsequently tested. Mangara-6: Combined Development and Exploration Well Update The Company has logged and cased the C sand reservoir and subsequently drilledthe E sands to a total depth of 3,108 m. A DST over the E sands flowed oil to surface. The Company cored 18 m in the Esands, which showed clear signs of oil pay. The Company believes that the Esands have the potential to add significant reserves. The Company has tested E sands potential in Mangara-5, Mangara-6 and in Krim-1and is currently evaluating the additional potential upside across a broadarea. Exploration and Appraisal - Seismic Acquisition The Company commenced 2D seismic acquisition throughout its concessions onschedule and is currently acquiring data. The 250 lineal km in DOB/DOI blocksis acquired. The 1,500 km of 2D seismic acquisition will focus on wellplacement for structures in the 2014-2016 exploration drilling program, as wellas to identify additional prospects currently not captured in the Company'sresource estimates. The Company anticipates the new 2D seismic will provideadditional information sufficient to potentially convert identified leads intodrillable prospects. Kibea and Beche: The Company also commenced its 3D seismic acquisition program in the Kibea areaon schedule. Of the 708 square kilometers ("km2") planned for 2014, 455 km2will focus on the Kibea discovery and the nearby Beche exploration area. TheBeche area includes three prospects similar to the discovery at Kibea. Theseismic data acquisition continues to progress on schedule. Kibea is a light oil discovery (33 - 35 degrees API) with 45.9 MMbbls of gross2P reserves based on the September 30, 2013 McDaniel Report. The McDanielResource Report(2) estimates additional prospective resources in the Kibeadiscovery of 20.0 MMbbl on a gross unrisked Pmean basis. The Company is scheduled to move a drilling rig to the Doseo Salamat area bythe end of Q1, 2014. In addition to the Kibea discovery, the gross unriskedprospective resources(2) for the top prospects in the area include the following: Prospect P90 P50 Pmean P10 COS (MMbbl) (MMbbl) (MMbbl) (MMbbl) (%) Beche 38.8 116.1 169.7 358.0 29.2 Beche-B 25.4 79.3 116.8 244.2 24.6 Beche-C 32.7 95.9 141.5 300.8 21.0 TOTAL 428.0 Construction Projects - Mangara Development The 97 km of 12 inch oil and 6 inch natural gas shipping pipelines from Mangarato Badila are nearing completion, and are expected to be completed in March2014. During the last 60 days, the Company focused its efforts on commissioning theSPT. The SPT was completed in January, 2014 and will temporarily processadditional Badila crude oil until the Badila expansion is completed. Due to the focus on the SPT, the Mangara field CPF is expected to be fullycommissioned in March 2014. 2014 Guidance The Company's forecasted work program for 2014 is as follows: - Drill and complete 20 to 22 development wells; - Drill 8 to 10 exploration wells; - Commission the Mangara pipeline and CPF; - Expand the Mangara and Badila processing facilities; - Commence the FEED and land acquisition for the Doseo pipeline. The expected costs and production from the above program as are follows: - Production: 22,000 to 26,000 gross bopd (11,000 to 13,000 workinginterest bopd); - Capital: $765 to $845 million gross ($375 to $425 million net toCaracal and after the $100 million GlencoreXstrata plc carry); - Annual funds flow from operations: $220 to $270 million, $1.50 to$1.85 per share; - Q4 2014 annualized funds flow from operations: $439 to $480 million,$3.00 to $3.28 per share. About Caracal Energy Inc. Caracal Energy Inc. is an international exploration and development companyfocused on oil and gas exploration, development and production activities inthe Republic of Chad, Africa. In 2011, the Company entered into threeproduction sharing contracts ("PSCs") with the government of the Republic ofChad. These PSCs provide exclusive rights, along with its partners, to exploreand develop reserves and resources over a combined area of 26,103 km2 insouthern Chad. The PSCs cover two world-class oil basins with oil discoveries,and numerous exploration prospects. The Company's shares trade on the London Stock Exchange under the symbol CRCL. The most recent Corporate Presentation dated January 2014 can be found on theCompany's website at www.caracalenergy.com. Cautionary Statements This announcement contains certain forward-looking information and statements.Forward-looking information typically contains statements with words such as"intend", "target", "anticipate", "plan", "estimate", "expect", "potential","could", "will", or similar words suggesting future outcomes. Informationrelating to reserves and resources is deemed to be forward-looking information,as it involves the implied assessment, based on certain estimates andassumptions, that the reserves and resources described exist in the quantitiespredicted or estimated, and can be profitably produced in the future. TheCompany cautions readers not to place undue reliance on forward-lookinginformation which by its nature is based on current expectations regardingfuture events that involve a number of assumptions, inherent risks anduncertainties, which could cause actual results to differ materially from thoseanticipated by the Company. In addition, any forward-looking information ismade as of the date hereof, and each of the Company and its affiliatesexpressly disclaim any obligation or undertaking to update, review or revisesuch forward-looking information contained in this announcement to reflect anychange in its expectations or any change in events, conditions or circumstanceson which such information is based unless required to do so by applicable law. Forward-looking information is not based on historical facts but rather oncurrent expectations and assumptions regarding, among other things, the timingand scope of certain of the Company's operations and the timing and level ofproduction from the Company's properties, plans for and results of drillingactivity and testing programs, future capital and other expenditures (includingthe amount, nature and sources of funding thereof), continued politicalstability, and timely receipt of any necessary government or regulatoryapprovals. Although the Company believes the expectations and assumptionsreflected in such forward-looking information are reasonable, they may prove tobe incorrect. Forward-looking information involves significant known andunknown risks and uncertainties. A number of factors could cause actual resultsto differ materially from those anticipated by the Company including, but notlimited to, risks associated with the oil and gas industry (e.g. operationalrisks in exploration and production; inherent uncertainties in interpretinggeological data; changes in plans with respect to exploration or capitalexpenditures; interruptions in operations together with any associatedinsurance proceedings; reductions in production capacity, the uncertainty ofestimates and projections in relation to costs and expenses and health, safetyand environmental risks), the risk of commodity price and foreign exchange ratefluctuations, the uncertainty associated with negotiating with foreigngovernments, risk associated with international activity, including the risk ofpolitical instability, the risk of adverse economic market conditions, theactual results of marketing activities and the risk of regulatory changes.Forward-looking information cannot be relied upon as a guide to futureperformance. Terms related to reserves and resources classifications referred to in thisannouncement are based on definitions and guidelines in the Canadian Oil andGas Evaluation Handbook which are as follows. "Proved reserves" are those reserves that can be estimated with a high degreeof certainty to be recoverable. It is likely that the actual remainingquantities recovered will exceed the estimated proved reserves. "Probable reserves" are those additional reserves that are less certain to berecovered than proved reserves. It is equally likely that the actual remainingquantities recovered will be greater or less than the sum of the estimatedproved plus probable reserves. The qualitative certainty levels referred to in the definitions above areapplicable to individual reserves entities (which refers to the lowest level atwhich reserves calculations are performed) and to reported reserves (whichrefers to the highest-level sum of individual entity estimates for whichreserves estimates are presented). Reported reserves should target thefollowing levels of certainty under a specific set of economic conditions: - at least a 90 percent probability that the quantities actuallyrecovered will equal or exceed the estimated proved reserves. This category ofreserves can also be denoted as 1P; - at least a 50 percent probability that the quantities actuallyrecovered will equal or exceed the sum of the estimated proved plus probablereserves. This category of reserves can also be denoted as 2P; and - at least a 10 percent probability that the quantities actuallyrecovered will equal or exceed the sum of the estimated proved plus probableplus possible reserves. This category of reserves can also be denoted as 3P. Additional clarification of certainty levels associated with reserves estimatesand the effect of aggregation is provided in the COGE Handbook. The estimatesof reserves and future net revenue for individual properties may not reflectthe same confidence level as estimates of reserves and future net revenue forall properties, due to the effects of aggregation. "Prospective resources" are those quantities of petroleum estimated, as of agiven date, to be potentially recoverable from undiscovered accumulations byapplication of future development projects. Prospective resources have both anassociated chance of discovery (geological chance of success or "COS") and achance of development (economic, regulatory, market, facility, corporatecommitment or political risks). The chance of commerciality is the product ofthese two risk components. The prospective resource estimates referred toherein have not been risked for either the chance of discovery or the chance ofdevelopment. There is no certainty that any portion of the prospective resources will bediscovered. If a discovery is made, there is no certainty that it will bedeveloped or, if it is developed, there is no certainty as to the timing ofsuch development or that it will be commercially viable to produce any portionof the prospective resources. Figures related to the Company's reserves and resources are derived from theSeptember 30, 2013 McDaniel Report and the June 30, 2013 McDaniel Report. A description of the uncertainties and significant positive and negativefactors associated with the estimates of reserves and resources in respect ofthe September 30, 2013 McDaniel Report is contained in the Company's November7, 2013 material change report and a description of the uncertainties andsignificant positive and negative factors associated with the estimates ofreserves and resources in respect of the June 30, 2013 McDaniel Report iscontained in the Company's July 25, 2013 material change report. Copies ofthese documents are available on the internet under the Company's profile atwww.sedar.com. Information relating to reserves and resources is deemed to be forward-lookinginformation, as it involves the implied assessment, based on certain estimatesand assumptions, that the reserves and resources described exist in thequantities predicted or estimated, and can be profitably produced in thefuture. Well-test results are not necessarily indicative of long-termperformance or ultimate recovery. ---------------------------------(1) McDaniel Reserves Report effective September 30, 2013(2) McDaniel Prospective Resources Report effective June 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 Bayless 604-694-6035Joel Shaffer 416-649-8006 FTI Consulting - UK Media EnquiriesBen Brewerton / Ed Westropp / Georgia Mann+ 44 (0) 207 8313 3113caracalenergy.sc@fticonsulting.com

(CRCL)