Mayan Energy Limited Operations Update (6942L)

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RNS Number : 6942L

Mayan Energy Limited

21 July 2017

21st July 2017

Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil and Gas

Mayan Energy Ltd ("Mayan" or "the Company")

Operations Update

Mayan (AIM: MYN) is pleased to announce the following operational developments at its Zink Ranch and Shoats Creek fields in the United States as well as the addition of a seasoned oil and gas professional to its advisory team.

Highlights

-- Zinc Ranch and Matthis Assets: The Company has commenced the process of obtaining the regulatory approvals and engaged vendors necessary to implement the work program announced in conjunction with the approximately US$2 million farm out of interest in its Zink Ranch and Mathis assets (see RNS dated 18 July 2017).

o An environmental impact study required to obtain drilling permits has been commissioned, and is expected to be completed within the next three weeks. The Company is of the view that the study is unlikely to encounter any material issues that might delay work;

o Vendors and contractors to undertake the workover operations at Zink Ranch have been engaged with equipment moving in and the planned workovers to commence during August 2017.

-- Shoats Creek: Re-start of operations of the Lutcher Moore #20 (LM20) well are currently underway:

o The Company has completed the installation of a mono-pump in the Lutcher LM20 well that will better handle the water and sand issues which had previously caused a cessation in production; and,

o Details with respect to flow rate from the well will be provided in due course as production stabilizes.

-- After further evaluation of the Lutcher Moore #14 well, the Company has elected to move forward with installation of an inter-meter on the Lutcher Moore #14 well to produce the well on gas lift on an intermittent basis as downhole pressure permits.

o Using this method, the Lutcher Moore#14 will be able to contribute economic volumes of oil and gas at very low operating cost driven by gas pressure from the formation which, as it exceeds certain levels, will be permitted to drive liquids to the surface resulting in oil and gas production.

o As pressure declines, production will cease for a time allowing pressure to accumulate which in time will drive additional production.

o The intermeter is a very inexpensive solution that will allow a high return, positive cash flow to be realized from this well.

-- Following reactivation of the salt water disposal system to accommodate production from the LM20 well, the Company intends to take advantage of excess water disposal capacity at Shoats Creek to produce the Lutcher Moore #13 (LM13) well from various sands tested in early 2Q 2017.

o Salt water disposal lines to dispose of water volumes associated with the LM13 to be installed following addition of the LM14 to production via inter-meter.

o Completion of disposal lines will allow the well to be placed on pump. Further stimulation/enhancement of LM13 to be evaluated. Final results to be announced in due course following stabilization of production from this well.

-- Dr. David S. Kahn has been recruited to act as oilfield technology advisor to the Company. Dr Kahn bringing more than 25 years as an executive with major oil and gas companies including Baker Hughes, Halliburton, and, Texaco. In the last 15 years, he has been a principal and founder of several successful companies globally including Ivanhoe Energy, Black Pearl & Tanganikya. Dr. Kahn brings specialist expertise in reservoir stimulation that the Company believes will greatly be of benefit in its exploitation of Zink Ranch and Mathis assets as well as evaluation of future opportunities in Oklahoma and Texas.

Eddie Gonzalez, CEO, commented: "I am very excited about the addition of Dr. Kahn to our team. His expertise will immensely aid our efforts at Zink Ranch where we are moving forward with the work program contemplated in the transaction announced 18 July 2017. As I have previously and publicly opined, Zink Ranch is a hidden gem in the Company's portfolio and the farm out validates my opinion and previous statements with respect to its value to this Company. I reassert: Zink Ranch is the type of project a company of the size of Mayan should undertake.

We continue to see positive operational developments at Shoats Creek and while I believe the Company should consider a move decisively towards an exit from this field, due to the capital intensive nature of Shoats Creek, we will continue to add value, as and where possible, until an exit strategy has been implemented.

While we are still addressing certain legacy issues I inherited upon accepting the position of Chief Executive Officer of Mayan, the cumulative effect of the personnel, balance sheet and operational developments the Board has put in place now move the Company from a defensive posture with respect to value creation into a period where I expect great strides toward increasing production, revenues and cash flow to drive share price appreciation. A new chapter in Mayan's history is now unfolding and I believe the future looks bright for the Company."

Special note concerning the Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Subscription, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

**ENDS**

For further information visit www.Mayanenergy.com or contact the following:

 
                                       + 1 469 394 
 Eddie Gonzalez    Mayan Energy Ltd     2008 
                                       [phone] 
 Charlie Wood      Mayan Energy Ltd     326 
                   Beaumont Cornish    [phone] 
 Roland Cornish     Ltd                 3396 
                   Beaumont Cornish    [phone] 
 James Biddle       Ltd                 3396 
                   Cornhill Capital    [phone] 
 Nick Bealer        Limited             9612 
 
 

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) oil and gas energy company; whose present operations which are focussed on the redevelopment and enhancement of its upstream oil and gas interests in Oklahoma and Louisiana.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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July 21, 2017 02:00 ET (06:00 GMT)