Corcel Regulatory News (CRCL)

Caracal Energy Inc. - Operations Update CALGARY, March 5, 2014 /CNW/ - Caracal Energy Inc. ("Caracal" or the "Company")(LSE:CRCL) is pleased to provide an update of exploration, development andproduction operations in the Republic of Chad. Highlights include: · Current production increased to 14,200 gross barrels oil per day("bopd"), from 12,000 bopd as reported on January 20, 2014; · Production at the Badila field is continuing from the original threewells with a 15-20% water-cut, in line with expectations; · Badila-7 is currently drilling at 1,260 meters and Badila-9 isexpected to spud over the next 7 days. Both of these wells are expected toprovide additional production rate capacity; · Mangara-6 has been completed and testing of the Cretaceous E sands isunderway. The comprehensive completion program is also testing the Cretaceous Dand C sands. Mangara-6 is expected to be on production later this year when theMangara field is brought on stream; · Mangara-4 has been successfully side-tracked and cased as aCretaceous E sands producer; · The first of the four new drilling rigs contracted in 2014 hasarrived at the port in Cameroon, on schedule, and should be on site in Q2; · The 2014 exploration program is underway in the Kibea - Beche area,where 3D seismic is nearing completion; and · The Company's first oil sales tanker lifting is now expected beforethe end of March 2014. Gary Guidry, Chief Executive Officer, said: "We are making good progress maximizing throughput at our Badila productionfacilities, and we are on schedule to expand the fluid handling capacity atBadlia later this summer. In addition, we are nearing completion of theproduction facilities at Mangara and the pipeline connecting Mangara to Badila,and we are looking forward to having the Mangara field on stream later thisyear. An exciting milestone will be moving a drilling rig to the Kibea - Beche areain the next two months, kicking off our 2014 high impact exploration programwhere we plan to test approximately one billion barrels in gross unrisked"Prospective Resources."(1) Production With Badila-6 now on stream, current production is 14,200 bopd, up from 12,000bopd in January and in line with the Company's expectations for the period andthe Company's guidance of 22,000 to 26,000 bopd annual average 2014 production.Production from the Badila field has been stable since the commissioning of thefacilities was completed in December 2013, with oil production, waterproduction and well pressure consistent with forecasts. Badila processing capacity, previously constrained to 14,000 barrels of fluidper day (bfpd") has now been expanded to 25,000 bfpd with the completion of thesouthern processing terminal ("SPT"). The SPT will handle excess Badilaproduction until expansion of the Badila facilities is completed, which isexpected during the third quarter of 2014. Water rates, relative to total fluidfrom the Badila field, are stable between 15 and 20%, in line withexpectations. Production from the Badila field has been increasing since thecommissioning of these facilities was completed in December 2013. Operations at Badila currently include the drilling of Badila-7 with rigGWD-96, and preparations to spud Badila-9 with rig GWD-158. The GWD-158 rig iscapable of deep drilling and once Badila-9 drilling is finished, will be moveit to the Kibea - Beche area for a continuous spring/summer explorationdrilling program. GWD-96 will continue in the Badila field, drilling Badilawells for additional production rate capacity. Oil Sales The Company's line fill contribution was completed in January 2014 andadditional production accumulated as inventory. The sale of the Company'sinaugural cargo from the Kribi sales terminal is committed, with the liftingscheduled for the latter part of March 2014. Tanker liftings are typicallybetween 900,000 and 1,000,000 barrels of oil. The Company will jointly liftwith its partner, GlencoreXstrata (therefore, approximately 560,000 barrels ofoil will be net to the Company). Exploration and Development: Drilling Operations The Company has commenced the mobilization process of an additional fourdrilling rigs, which will bring the total rig count to six drilling rigs by theend of 2014. In addition, two completion rigs will be mobilized into countryduring 2014, to bring the total completion rig count to three. One of these newcompletion rigs also has the ability to drill medium depth wells. The first of the four additional drilling rigs has arrived in the port ofDouala, Cameroon. It is scheduled to arrive in Chad and commence drillingduring the second quarter of 2014. Bitanda: Exploration Well The Company has plans to test the Bitanda exploration well in the comingmonths. Currently, the workover/completions rig remains in Mangara, testing andcompleting Mangara-6. Kibea and Beche: Seismic Acquisition and Drilling The Company has mobilized a seismic contractor to shoot 2D and 3D seismicthroughout its asset base in Chad. Much of the planned 1,500 line-kilometers of2D seismic is completed and was focused on well placement for structures to bedrilled in the 2014-2016 exploration programs as well as further evaluation ofadditional prospects currently not included in the Company's estimates. Of the 700 square kilometers ("Km2") planned for 2014, 450 Km2 will be focusedon the Kibea discovery and nearby Beche exploration area, which includes threeprospects with similar structures to the discovery at Kibea. Currently, theseismic has been shot over the Kibea field and nearly competed over the Bechearea. Preliminary processing indicates that the seismic acquired is ofexcellent quality. The three prospects in the Beche exploration area areassessed 420 million barrels of Pmean unrisked gross recoverable ProspectiveResource in aggregate, according to the McDaniel Resource Report.(1) Kibea is alight oil discovery (33 - 35 degrees API) with 45.9 million barrels of gross 2Preserves, and 105.0 million barrels of gross 3P reserves according to theMcDaniel Reserves Report.(2) The first well, Kibea-2, scheduled for the second quarter of 2014, in the Kibea- Beche trend will be an appraisal and deep test on the Kibea structure. TheKibea-2 well will provide a test of deep Cretaceous potential identified onprior 2D well data acquired on Kibea-1 and the new 3D seismic. According to theMcDaniel Resource Report, gross unrisked prospective resources below in theKibea discovery are 40.1-76.9 million barrels on Pmean and P10 basis,respectively.(1) In addition, oil samples to be acquired during testing ofexisting discovered reservoirs in Kibea-2 will provide development and pipelinedesign information. Drilling two of the three Beche exploration prospects isexpected to commence in Q3 2014, once Kibea-2 is tested. 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 to explore and develop reserves andresources over a combined area of 26,103 km2 in southern Chad. The PSCs covertwo world-class oil basins with oil discoveries, and numerous explorationprospects. The Company's shares trade on the London Stock Exchange under the symbol CRCL. 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 programmes, future capital and other expenditures(including the amount, nature and sources of funding thereof), continuedpolitical stability, and timely receipt of any necessary government orregulatory approvals. Although the Company believes the expectations andassumptions reflected in such forward-looking information are reasonable, theymay prove to be incorrect. Forward-looking information involves significantknown and unknown risks and uncertainties. A number of factors could causeactual results to differ materially from those anticipated by the Companyincluding, but not limited to, risks associated with the oil and gas industry(e.g. operational risks in exploration and production; inherent uncertaintiesin interpreting geological data; changes in plans with respect to explorationor capital expenditures; interruptions in operations together with anyassociated insurance proceedings; reductions in production capacity, theuncertainty of estimates and projections in relation to costs and expenses andhealth, safety and environmental risks), the risk of commodity price andforeign exchange rate fluctuations, the uncertainty associated with negotiatingwith foreign governments, risk associated with international activity,including the risk of political instability, the risk of adverse economicmarket conditions, the actual results of marketing activities and the risk ofregulatory changes. Forward-looking information cannot be relied upon as aguide to future performance. Well-test results are not necessarily indicativeof long-term performance or ultimate recovery. 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) and a chance ofdevelopment (economic, regulatory, market, facility, corporate commitment orpolitical risks). The chance of commerciality is the product of these two riskcomponents. The prospective resource estimates referred to herein have not beenrisked for either the chance of discovery or the chance of development. 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 theMcDaniel Reserves Report and McDaniel Resources Report, each as defined below. A description of the uncertainties and significant positive and negativefactors associated with the estimates of resources in respect of the June 30,2013 McDaniel Report is contained in the Company's July 25, 2013 materialchange report. Copies of these documents are available on the internet underthe Company's profile at www.sedar.com. ____________________________________1 Report prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"), anindependent qualified reserves evaluator, evaluating the prospective resourcesof the Company effective as of June 30, 2013 (the "McDaniel Resource Report").2 Report prepared by McDaniel, an independent qualified reserves evaluator,evaluating the reserves of the Company effective as of December 31, 2013 (the"McDaniel Reserve Report"). SOURCE: Caracal Energy Inc. For further information: Caracal Energy Inc.Gary Guidry, President and Chief Executive OfficerTrevor Peters, Chief Financial Officer+1 403-724-7200 Longview Communications - Canadian Media EnquiriesAlan Bayless +1 604-694-6035Joel Shaffer +1 416-649-8006 FTI Consulting - UK Media EnquiriesBen Brewerton / Ed Westropp+ 44 (0) 207 8313 3113caracalenergy.sc@fticonsulting.com

(CRCL)