Corion Amargo

COIRON AMARGO: High-impact Development Potential in Unconventional Plays + Conventional Opportunities

• This block is located in the Neuquén Basin of Argentina


• MVN has a 35% W.I. (34,973 net acres); Roch 10% (operator); Apco 45%; GyP 10%


• Existing conventional oil production from the Sierras Blancas formation


• Significant upside potential in the unconventional Vaca Muerta shale formation


• Area fully covered by 3D seismic


• Drilling program includes multiple wells in 2015


• Positioned in the first sweet spot in the basin for shale activity with over 150 shale wells drilled over last 18 months on offsetting acreage; hundreds of additional wells being drilled


• Area moving to larger-scale exploitation & development


• Ryder Scott has assigned substantial contingent and prospective resources to the Vaca Muerta (see above)

• Coiron Amargo Norte is a 25 year exploitation concession (until 2038) with no work commitments
• Coiron Amargo Sur is an exploration concession, 3 year evaluation phase until November 8, 2017 with a US$17.5M work commitment
• Six light oil pools on Sierras Blancas (conventional)
• Three of the six have been tested with horizontal wells and had impressive flow rates (unstimulated)
• The CAN-16 horizontal well has been tied into production facilities and is in production (567Boe/d, 198Boe/d net)
• Two or three additional horizontal wells will be drilled here in 2015
• Late 2014 drilled the CAS.x-16 VM well in Vaca Muerta with fracture stimulation and production testing expected soon
• Towards the end of 2015 the first horizontal multi stage frac well in Vaca Muerta will proceed.

From a company PR November 4, 2014

Madalena drilled, completed and placed on production its third Sierras Blancas light oil horizontal (CAN- 18(h)) after successfully targeting a third separate oil pool on its Coiron Amargo block (35% WI). The CAN- 18(h) horizontal was initially placed on production through permanent facilities at a total of 910 Boe/d (83% oil);

Actually there was a bit more info in that November 4 2014 company PR:

Coiron Amargo (35% WI) Block - Sierras Blancas Horizontal Exploitation & Vaca Muerta Shale Delineation Madalena’s third Sierras Blancas horizontal (CAN-18(h)) was recently drilled and completed in Argentina and was placed on production on October 18, 2014.

The CAN-18(h) well was drilled horizontally in the Sierras Blancas light oil reservoir to a total measured depth of 3,642 metres with a horizontal lateral section of approximately 450 metres in length. This horizontal well was subsequently cased and completed with a 3.5” slotted liner and for operational efficiencies was immediately placed on production through permanent facilities.

The CAN-18(h) well is flowing without artificial lift equipment and has been on production for approximately 12 days at choke settings ranging from 6 mm to 8mm in size with the following production rates observed to date:

• The highest production rate was on a 8 mm choke setting, when the CAN-18(h) well produced at approximately 755 bbls/d of oil with 930 mcf/d of associated natural gas for a total of 910 Boe/d (83% oil) at an average flowing pressure of approximately 990 psi over the initial 24 hour period.

• On a 6mm choke setting, the CAN-18(h) well has produced at an average rate of 342 bbls/d of oil with 566 mcf/d of associated natural gas for a total of 436 Boe/d (78% oil) over a 7 day period and at an average flowing pressure of approximately 901 psi. Water cuts have ranged from 5 to 17%.

The CAN18(h) well is the third horizontal well drilled into a third separate pool of the six Sierras Blancas conventional light oil pools discovered to date on the Coiron Amargo block. The Company has an inventory of horizontal development locations on the Coiron Amargo block and a fourth horizontal well targeting the Sierras Blancas light oil reservoir (CAN-16(h)) is now expected to spud in late November 2014 once the drilling operations are completed at CAS.x-16 (see below) and the drilling rig is moved to the CAN-16(h) location.

With the Coiron Amargo block located within the oil window of the Vaca Muerta shale, the Company is currently drilling a Vaca Muerta shale delineation well at the CAS.x-16 location in the southern portion of the Coiron Amargo block. Completion and testing operations on this well and a previously drilled Vaca Muerta shale well at the CAS.x- 15 location are both expected to be carried out as part of a multi-well completion program in late 2014 and early 2015. The CAS.x-15 well was previously drilled and cased after encountering approximately 114 metres of Vaca Muerta shale.

'admin' pid='57096' datel Wrote:

• Coiron Amargo Norte is a 25 year exploitation concession (until 2038) with no work commitments
• Coiron Amargo Sur is an exploration concession, 3 year evaluation phase until November 8, 2017 with a US$17.5M work commitment
• Six light oil pools on Sierras Blancas (conventional)
• Three of the six have been tested with horizontal wells and had impressive flow rates (unstimulated)
• The CAN-16 horizontal well has been tied into production facilities and is in production (567Boe/d, 198Boe/d net)
• Two or three additional horizontal wells will be drilled here in 2015
• Late 2014 drilled the CAS.x-16 VM well in Vaca Muerta with fracture stimulation and production testing expected soon
• Towards the end of 2015 the first horizontal multi stage frac well in Vaca Muerta will proceed.

Here is one of these Sierras Blancas wells (from the November 4 2014 PR):

The highest production rate was on a 8 mm choke setting, when the CAN-18(h) well produced at approximately 755 bbls/d of oil with 930 mcf/d of associated natural gas for a total of 910 Boe/d (83% oil) at an average flowing pressure of approximately 990 psi over the initial 24 hour period. On a 6mm choke setting, the CAN-18(h) well has produced at an average rate of 342 bbls/d of oil with 566 mcf/d of associated natural gas for a total of 436 Boe/d (78% oil) over a 7 day period and at an average flowing pressure of approximately 901 psi. Water cuts have ranged from 5 to 17%.

Madalena Energy moving to second horizontal Sierras Blancas well, more catalysts ahead

15th Jan 2014, 10:54 am by Deborah Bacal

Madalena Energy (CVE:MVN) (OTC:MDLNF), a junior oil and gas producer with assets in Canada and Argentina, is now moving its drilling rig to the second horizontal well to be drilled in the Sierras Blancas light oil reservoir at its Coiron Amargo block, after some stellar results from the first horizontal well at this play late last year.

The company is busy drilling both the Sierras Blancas and prolific Vaca Muerta plays on the Coiron Amargo block, which sits in the Nequen Basin in Argentina, home of Madalena's other two blocks in the country.

The Canadian junior, which has received recent upgrades by analysts lately on the back of improving sentiment in Argentina, said it has reached a total depth of 3,163 metres on the CAS. x-15 vertical well targeting the Vaca Muerta shale at Coiron Amargo.  This well is located in the southern portion of the block, and has been cased with roughly 114 metres of Vaca Muerta shale logs, with completion and testing operations now planned for this quarter.

The drilling rig will therefore now move to the CAN-15(h) lease site, to start the drilling on its second Sierras Blancas horizontal well, which will be drilled into one of the largest Sierras Blancas pools on the block.

The company, in an update Wednesday, said it will target a separate pool than was drilled by CAN.xr-2(h), the first horizontal well, the results of which were released late in December. At the time, the company reported results of a multi-rate production test, with the highest rates, on a 12 mm choke setting, flowing at a rate of 2,238 barrels of oil equivalent per day (boe/d) over a three hour period.

According to Madalena's statement, in the 10-day period to January 7, the first well flowed on a restricted 6 mm choke, and produced a total of 7,815 boe/d, with no significant flowing pressure declines observed and no water produced. The well will continue to be produced at restricted flow rates until permanent facilities are in place, expected next month.

The company has a total of six Sierras Blancas conventional light oil pools discovered so far at Coiron Amargo. Madalena is planning to continue its technical work to improve its understanding of the potential for the horizontal oil play.

Meanwhile, at its Cortadera block in Argentina, where it signed a decree to extend the initial exploration period last September, Madalena and its partner, Gas y Petroleo del Neuquen SA, plan to re-enter the previously drilled CorS.x-1 Vaca Muerta test well this quarter to evaluate an up-hole zone of interest in the wellbore. The first exploration period for the block has been extended until October 26, 2014, with the option to enter further exploration periods.

And at Madalena's assets in West-Central Alberta, Canada, the company said Wednesday it is focused on development of its Ostracod horizontal oil wells, drilling two additional wells last month, which both successfully hit their targeted oil zones. These two wells are expected to be placed on production this quarter.

Before quarter-end, it is also planning to drill an additional Ostracod oil well, following the five completed last year. The oil and gas junior has about 58 net sections of land on the Ostracod oil trend, with a significant inventory of drill-ready locations.

Madalena also said Wednesday that testing at its Nordegg horizontal well in Alberta yielded no meaningul hydrocarbon production, with the wellbore suspended.

On Tuesday, Madalena got a boost from Gas y Petróleo del Neuquén's (GyP) resurrected plans to launch an IPO on the Buenos Aires stock exchange later this year. Haywood Securities analyst Darrell Bishop raised his price target by 20 cents on Madalena, after recent commentary from GyP about the upcoming public listing suggests the company is targeting an IPO valuation of $8,000 an acre.

"We view this latest macro announcement as another data point supporting our call that Argentina is on the verge of sentiment turning the corner and that industry (and investors) would come back to the space," wrote Bishop in his note, which bumped up Madalena's price target to $1.10, with a buy rating.