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Mayan Energy Ltd: Completion of acquisition of new five-well package

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Oilfield Technology,

Mayan, the AIM listed oil and gas company, has announced that, further to its announcements of 25 June and 26 July 2018, it has now completed the acquisition of a 60% working interest/ 45% net revenue interest in three horizontal and two vertical Austin Chalk wells in Gonzalez County, Texas for a total consideration of US$500 000.

The Acquisition is in line with Mayan’s objective to increase net production to 300 - 500 bpd by securing select under-exploited US onshore assets at attractive prices and enhancing production by applying the company’s in-house expertise and advanced technologies and techniques. Following extensive due diligence the company has elected not to proceed with the purchase of 7 Stockdale Wells, which were also subject of the conditional Sale and Purchase Agreement. The company will continue to assess additional well packages in the region as it builds out its production base.

The company will be mobilising equipment to the Gonzalez County field in the first week of September. The initial work-over programme is expected to take 8 weeks. All permits required to work-over and produce the wells are in place once the transfer of the wells are completed.

For details of the Austin Chalk well package please refer to the company announcement dated 25 June 2018.

5 Austin Chalk Wells (Working interest 60%/Net revenue interest 45%)

  • Near term workover and exploitation potential on three Austin Chalk horizontal wells and two vertical wells using low-cost techniques proven on Morris #1 well.
  • The company intends to use a coiled tubing rig to clean out; work-over; and, acidize Austin Chalk zone in each of the horizontal laterals with estimated potential production of 60 - 80 bpd per well.
  • The company estimates that the workover and acidisation procedure on each well will require no more than two days rig time allowing for near term, high impact results to be realised.
  • Longer-term potential to re-frac wells targeting zones identified with the Roke Quad Neutron log tool.
  • None of the wells have been re-entered or stimulated in any way suggesting significant upside potential from low cost stimulation and production enhancement techniques and technologies.
  • The company has established a 300 bpd (Gross) target from the five well package with potential for upside if the company achieves the higher end of its expectation range on each well.
  • Operating cost per barrel estimated to be US$18 - 20/bbl as water from these wells will be transported via truck for disposal.

Eddie Gonzalez, Managing Director, said: "With the addition of these 5 new wells plus ongoing work programmes at Forest Hill and Zink Ranch we are well positioned to drive daily production forward. Our technical team has demonstrated their capability to achieve results by exploiting existing well bores using cutting-edge and proprietary tools and techniques. Thanks to today’s agreement, our team now has many more opportunities to replicate this success. I expect the Gonzalez County wells to form the backbone of our production, augmented by important contributions from Forest Hill and Zink Ranch & Stockdale.”

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