Alange Energy announces September 30, 2009 financial results and provides
operational update
Highlights ---------- - As of the end of November 2009, total daily production rates at Cubiro increased 31% from the end of September. Alange Energy's current share of the daily production of approximately 1,400 bls per day is almost double the daily rate at the end of September. - At Carbonera La Silla, recent reservoir studies conducted jointly with Halliburton were recently concluded, supporting a program of five workovers leading to the identification of three new development locations and a proposed 3D seismic survey. - At Carbonera production from the Cerro Gordo-1 well is stable and since acquiring and operating the Carbonera facilities, Alange Energy has managed to cut production costs by 30%. - At Mecaya, the Company is in the process of formalizing three separate transactions that will result in a combined 58% working interest in the Mecaya Block, significantly impacting the Company's ability to ramp up production in this block. - By the end of 2009 Alange Energy will have five drill rigs in operation, three of them working in development and exploration drilling, and two of them in workovers. This slate will strongly position the Company for its planned intensive 2010 drilling program. Financial Results -----------------
Alange Energy announced today the release of its unaudited consolidated financial results for the three-month period ended
This is the first release of quarterly results following the completion of the reverse takeover transaction on
For the quarter ended
The Company reported a net loss of
At
Operational Update ------------------
Cubiro
Production ----------
As of the end of
When the Company took over as operator of the Cubiro property following its
Drilling --------
Alange Energy's current development drilling campaign at Cubiro is focused on increasing its probable and possible reserves with two development wells, and potentially a third well which is expected to add to production in the next 30 days.
Drilling at Careto-5 has reached total depth and is currently under evaluation. Well logs showed good oil development in the main objective C-7, but they also unveiled a very attractive oil sand development in the deeper Gacheta formation, where initial tests are showing stable natural flow of 500 bls per day of 34 degrees API clean oil. Although, as expected, C-7 shows an excellent sand development; the Gacheta find represents the discovery of a new field. Also, a third horizon, Guadalupe, will be tested. The well will be on permanent production by
Exploration -----------
A total of 250 km(2) of 3D seismic surveys were recently acquired in the block, resulting in the characterization of the Barranquero prospect and the identification of seven additional structural prospects (Criollo, Cazador, Copa 1, 2 and 3, Turpial and Azulejo). At Tijereto, an exploration well tested heavy oil in UNE and found C-7 wet. The well has been suspended for additional testing in Q2 2010. The Company is currently in the process of acquiring 100 km2 of new seismic work to delineate the extensions of the Careto and Arauco fields and to complete coverage of the Turpial and Azulejo prospects. At Barranquero, an exploration well is scheduled for
Cerrito
An integrated reservoir study has been carried out jointly with an independent consulting firm, leading to the confirmation of the prospectivity of the Cretaceous for gas and the Tertiary for oil. Currently, the acquisition of 24 km(2) of 3D seismic during Q1 2010 is in the planning stage with the survey aimed at optimizing subsurface information on both horizons. In addition, plans are underway to execute three workovers in the T-Burns, Cerrito 1 and Cerrito 2 wells. T-Burns is scheduled for mid-December 2009 with Cerrito 1 and Cerrito 2 to follow in
Alange Energy has negotiated a 3-year gas sales contract with Invercolsa (Gases del Oriente), for supply to the city of Cucuta, at a price of
Carbonera La Silla
An integrated reservoir study conducted jointly with Halliburton was recently concluded, supporting a program of five workovers. The first two wells of this program will be intervened in the next four weeks with the expectation of developing an oil production of 100 Bls per day before year end. However, the study also suggests recompletion of those wells in the shallower Formation Mirador which holds better promise. The recompletions will be undertaken in late Q1 2010. Results of the study also led to the identification of three new development locations and a proposed 3D seismic survey. The Company expects this study to lead to the full realization of this asset's value for Alange Energy.
Carbonera
Production ----------
The Carbonera production from the Cerro Gordo-1 well is stable. Since acquiring and operating the Carbonera facilities, Alange Energy has managed to cut production costs by 30%. The Cerro Gordo-La Florida project, which consists of building a gas pipeline to a new delivery point, is currently underway and expected to be finalized by
Exploration -----------
The block holds an important potential for natural gas at the Cretaceous and oil at the Tertiary. The recently drilled Paramito-1 well has proved a structural/stratigraphic model that laterally extends the previously known natural gas accumulation in the Cretaceous. Paramito-1 had a gas blowout in mid-September 2009 that was controlled promptly. After the well was under control, the evaluation was initiated on the Tibu, Aguardiente, Cogollo and La Luna formations, all with petrophysical and mudlog shows. These tests are currently underway and are scheduled to be finalized in early-December. Tertiary formations would be the target of a future exploration well in 2010 with the objective of investigating the productivity of several oil zones drilled and untested. This well fulfills the commitment with the ANH, with a deadline of
Topoyaco
Alange Energy has received approval from the ANH to consolidate exploration phases 1 and 2. A 75-km(2) 2D seismic survey has been acquired and processed, and the existing 50-km(2) 3D seismic has also been reprocessed. This data base is currently being interpreted to determine the locations of the two exploration wells to be drilled during H1/2010. The geological and geophysical information available provides positive indications of additional prospective resources. The attractiveness of this block is based on the possibility of finding a large field and the fact that it is located on trend with half a dozen prolific fields, including Gran Tierra's Costayaco. An environmental license has been granted and a request for an extension is currently in progress, which would allow for covering an additional drilling area. Accordingly, exploration wells Topoyaco-1 and Topoyaco-2 are now scheduled to be drilled in Q2 2010.
Based on its equity in neighboring field Rio Zulia, Ecopetrol agreed with Alange Energy for the joint acquisition of 3D seismic and data sharing. Alange Energy acquired 60 km(2) of 3D seismic and conducted an 800-sample surface geochemical survey. Processing of these surveys is scheduled for
Mecaya Transactions
The Company is in the process of formalizing three separate transactions that will result in a combined 58% working interest in the Mecaya Block.
On
On
Delavaco Energy Inc., acquired by the Company on
The Mecaya-1 well, initially drilled in 1989 and then suspended, tested at 650 Bls per day of natural flow, confirming hydrocarbon production and the potential of the block. The data collection and analysis has been completed for an environmental exploitation license. The application will be submitted after completion of the technical report, which is in progress. The first operational step will be the immediate construction of the access road, in order to start the workover of Mecaya-1 in Q1 2010. A 3D seismic survey has been designed and acquisition will start after the corresponding permit is granted. This survey, covering 40 km(2), will be the basis for the field development and will support drilling three or four wells on the structure.
Rio Magdalena
Following the acquisition of Delavaco, Alange Energy has taken over the field operations. The first objective of the development program is the conclusion of the Popa-2 extended well test. Popa-2 was drilled in 2008 and tested for approximately 800 net Boe per day. The future work program includes interpretation of 81 km(2) of 3D seismic and drilling of the Popa-3 well in H1/2010.
La Punta
Alange Energy holds a 3.6% working interest in the field that currently produces from the La Punta-2 well (total 4,600 Bls per day). Drilling of La Punta-3 is planned to start in Q1 2010, after which Alange Energy's working interest will immediately increase to 6%. After drilling of La Punta 4, and 5 is subsequently completed, the Company's working interest will increase to 10%.
Investor Relations Services ---------------------------
The Company also announced today that it has retained the services of The Capital Lab Inc. to provide investor relations services, subject to regulatory approval. The Capital Lab will advise and support Alange Energy with its investor communications and marketing efforts, focused on developing a comprehensive marketing program aligned with Alange Energy's short and long term strategy.
The investor relations agreement became effective on
The Capital Lab is a Toronto-based company that provides strategic investor relations and business development solutions for international, publicly listed companies in various industry sectors. It focuses on advising global companies during transition periods, as a part of their team, to provide immediate and full support throughout their growth and evolution.
In addition to the options granted pursuant to the investor relations agreement, The Capital Lab currently holds 15,770 common shares in the capital of Alange Energy.
A conference call will be held on
Call-in details are as follows:
Toronto & International: (647) 427-7450 North America: (888) 231-8191
Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in thirteen properties in four basins in
Forward-Looking Information
This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy Corp. and may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed from time to time in the Company's periodic reports filed with the British Columbia Securities Commission and other regulatory authorities. The Company has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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For further information: Michael Davies, Chief Financial Officer, (416) 360-4653, ext. 224
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