Mayan Energy Limited Operations Update (1250W)

TIDMMYN

RNS Number : 1250W

Mayan Energy Limited

15 April 2019

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

15(th) April 2019

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

Operations Update

Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company, is pleased to provide an update on its Texas operations in the United States which encompass the Austin Field, where 6 wells have successfully been bought back on stream and Zink Ranch, in Oklahoma, where production enhancements are planned via its Operator, Attis Operating Inc. ("Attis") a wholly owned subsidiary of Attis Oil and Gas Ltd.

Austin Field

The Austin Field wells have been brought on production following the rework programme. The cumulative mean production over the last 12 days of the reworked wells is currently 66 bopd. and total barrels of oil produced 343 bbl. With the improving oil : water ratios currently being recorded, Attis is expecting a further 10% increase to daily production.

The matrix below shows the wells on production with mean barrels of oil per day and total barrels of oil produced;

 
      Well         Total Depth    Formation     Mean BPD   Total BBL. 
                       (ft) 
    Edwards Unit 
              2H         3,080   Austin Chalk       6.38        72.50 
                  ------------  -------------  ---------  ----------- 
     Garrison #1         6,964   Austin Chalk       6.47        25.87 
                  ------------  -------------  ---------  ----------- 
      Kosub Unit         2,854   Austin Chalk       1.14         1.14 
                  ------------  -------------  ---------  ----------- 
       Montsanko 
               #         4,961       Anacacho      10.44        10.44 
                  ------------  -------------  ---------  ----------- 
       Morris #1         5,102       Anacacho       4.93        41.76 
                  ------------  -------------  ---------  ----------- 
  Ritchie-Talley 
          Unit 1         5,890   Austin Chalk      37.12       191.40 
                  ------------  -------------  ---------  ----------- 
                                      TOTALS:      66.48       343.11 
                                               ---------  ----------- 
 

-- Following the results of the property assessment conducted by Attis in Q4 2018, the Company began workovers on the 7 wells that make up the Austin Field in January 2019.

-- In total, during the first quarter, six wells have been brought back online as producing wells.

-- Since work commenced on the Austin Field, 343 barrels of oil were produced and 340 barrels sold, including residual and workover stock.

-- The Company believes the Austin Field should stabilise at approximately 72 barrels of oil per day gross / 47 net, which approximates the Company's breakeven point of $65,000 per month (assuming US$62 WTI price) which is a discount to the current 6 month forward price of $64.

-- Following further appraisal of the topside equipment the Neubauer-Stanush will be reworked and put on production in May.

-- The rework programme has been completed 10% below budget, delivering a reduced payback period and improved return on investment.

-- Attis has also completed 'service, repair and replace' at all well locations and tank batteries.

-- The Austin Field is now being operated by Attis pumpers with direct oversight by the Company's operations and administration team.

Zink Ranch

The Company settled its outstanding issues with the prior Operator, Glen Supply, during the month of January and has been working diligently to transition ownership to its wholly owned Oklahoma subsidiary. The requisite transfer documentation will be shortly lodged with the Bureau of Indian Affairs and the Company has begun the initial stages of field planning and evaluation in order to optimise field development with a qualified geologist and geophysicist.

Following the strong and cost-effective performance of Attis at the Austin Field, Mayan has engaged Attis as a subcontractor to operate the Zink Ranch field.

   --     Zink Ranch has a total of 50 historic wells and 18 active wells. 

-- The Attis team have been in the field over the past week assessing the near-term requirements for optimisation.

   --     Initial topside field production enhancement techniques will be applied during April. 

-- The Company expects to see enhanced production from the current 6-8 bopd with limited capital being applied.

-- Importantly, the field operations cost has been reduced by 20% from 1 April 2019 under the sub-contractor agreement with Attis.

The Zink Ranch field production and revenue numbers have not been incorporated in the Company's breakeven analysis, however Mayan expects the field to have a significant impact to its bottom line .

Termination of relationship - Iron Hawk & Red Bensh Energy LLC

Attis has been subcontracted to operate the Zink Ranch field on behalf of Northcote Cleveland LLC, Mayan's subsidiary that will be the bonded operator and is the 100% owner of the Zink Ranch field. As a result of the appointment, the Company won't be pursuing the JOA arrangement with Iron Hawk Energy Group JV previously announced in RNS on (29 January 2019).

Furthermore, Mayan and Red Bensh Fork Energy LLC have mutually agreed to terminate the Memorandum of Understanding ("MOU"). Neither Party has any further obligations under the MOU relating to mutual evaluation of their respective fields. Mr. Bensh has resigned from the technical advisory committee.

Charlie Wood, CEO of Mayan, said, "We are pleased to report that we are already delivering close to breakeven production from the Austin Field and expect the numbers to improve going forward. Importantly, through this initial field development programme we have established a strong working relationship with our operator, Attis, who has shown a disciplined cost- controlled approach in delivering production resulting in an excellent return on capital deployed. We will continue to monitor performance and proactively implement further enhancements. We are applying the same methodical approach at Zink Ranch as we take control of operations and make further assessment of the development opportunities across our acreage. As part of this plan, the Company has begun sub surface geological studies at Zink Ranch with a view to further development and establishment of reserves and additional exploration opportunities will be evaluated at the Austin Field in the near future."

**ENDS**

For further information visit www.mayanenergy.co.uk or contact the following:

 
 Charlie Wood      Mayan Energy Ltd              [phone] 
 Roland Cornish    Beaumont Cornish Ltd          [phone] 
                  ----------------------------  ----------------- 
 James Biddle      Beaumont Cornish Ltd          [phone] 
                  ----------------------------  ----------------- 
 Frank Buhagiar    St Brides Partners Limited    [phone] 
                  ----------------------------  ----------------- 
 Gaby Jenner       St Brides Partners Limited    [phone] 
                  ----------------------------  ----------------- 
 Colin Rowbury     Novum Securities Limited      [phone] 
                  ----------------------------  ----------------- 
 

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) North American based energy company. It is actively pursuing a primary recovery oil strategy focused on re-stimulating wells within mature producing basins with immediate cash flow leveraging commercially available technologies and projects that are shallow, low risk with low levels of capex and infrastructure already in place. It also remains interested in creating shareholder value by strategic investments in similar projects with high cash generative potential and by forming beneficial development partnerships that enable the use of pioneering and leading extraction technologies.

Technical sign off

All of the technical information, including information in relation to reserves and resources that is contained in this announcement has been reviewed by, Mr Thom Board, a member of the Company's Technical Advisory Committee. Mr Board is a member of the Society of Petroleum Engineers who is a suitably qualified person with over 24 years' experience operating and developing oil and gas assets. Mr Board has reviewed the release and consents to the inclusion of the technical information.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

UPDMMGMDLDKGLZM

(END) Dow Jones Newswires

April 15, 2019 02:00 ET (06:00 GMT)