Calgary, Alberta / ACCESSWIRE / September 11, 2014 / Canoel International Energy Ltd. ("Canoel" or the"Corporation") (TSX VENTURE: CIL) is pleased to provide an update on Petrolera Patagonia S.r.l. ("Petrolera" or the "Company"), the Corporation's wholly owned Argentinean subsidiary. Petrolera is the operator and outright owner of title and mineral rights for two onshore concessions, Don Alberto and Don Ernesto, located within the Chubut province of Argentina.
Petrolera has now initiated a workover program designed to evaluate and optimize production from active wells on both the Don Alberto and Don Ernesto oil properties. The main objective of this program is to double production from up to 27 wells, and bring total Argentinean production to approximately 280 barrels per day. The budget has been set at $500,000 (US) and will be funded using proceeds from Canoel's recent capital raise. Revenue from the enhanced production is anticipated to be reinvested to fund additional initiatives demonstrating a high internal rate of return (IRR) for Petrolera. While already profitable at the regional corporate level, the Company intends to focus on these development-type prospects within Argentina to expand its low-cost production base and grow existing cash flow.
Petrolera has externally sourced oilfield workover equipment on contract, allowing the Company's technical team to directly manage the program. The company has retained an option, at no additional cost, to extend the term of the rental period. Management expects to be able to minimize costs due to the experience of its team and the fact that they will staff the operations with Company personnel. Petrolera will continue to integrate new data acquired during the process, into its ongoing modeling of active reservoirs and information previously gained from the ongoing monitoring of production.
In addition to the current workover program, Petrolera technical team has identified several high impact drilling opportunities on the two properties. The oil horizons to be targeted are located at depths below currently producing zones which are isolated from the deeper oil bearing zones by drillable bridge plugs. Previous operators had used such bridge plugs in order to initially produce only the shallower horizons. Due to recent drilling activity in nearby oil fields, Petrolera is optimistic that testing some of these deeper zones is warranted and would allow for better exploitation of the entire stratigraphic section present in the Chubut oil basin. Canoel is currently reviewing alternatives to fund development of these deeper horizons, including using growing internal cash flow, project specific financing, and/or establishing potential joint ventures or farm-in agreements.
About Canoel
Canoel focuses on near term producing properties that can be further optimized with its engineering and technical experience. To maximize shareholder value, Canoel targets acquisitions of shut-in production opportunities that offer strong logistics and close proximity to refineries and pipelines. Canoel's management and directors have extensive international and governmental experience and possess the technical knowledge to execute this strategy.
The company is also an accomplished Operator within Italy and currently manages eight onshore fields while, at the same time, overseeing the operations of three other non-operated fields. Canoel's licenses cover 847 square kilometers with net holdings of 369 square kilometers (approximately 91,143 acres). In addition to the strategy of consolidating and optimizing conventional natural gas fields, the Company has also initiated a strategy of directly generating electricity to be sold into the Italian grid using cogeneration facilities in fields where the natural gas is not optimal for direct sale via injection into the national pipeline network.
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Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the company's strategy including anticipated growth. The forward-looking statements and information are based on certain key expectations and assumptions made by Canoel, including the ability to execute its strategy and realize its growth opportunities including its ability to raise financing needed to execute its plans. Although Canoel believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Canoel can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, Canoel being unable to obtain additional financing or other resources to realize its growth opportunities. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Canoel undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
For further information, please contact:
Jose Ramon Lopez Portillo Andrea Cattaneo
Chairman of the Board CEO & President
Email: [email protected]
Telephone: (403) 938-8154
Telefax: (403) 775-4474
This press release is not to be distributed to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities law.
SOURCE: Canoel International Energy Ltd.