Calgary, Alberta / ACCESSWIRE / March 18, 2014 / Canoel International Energy Ltd. ("Canoel" or the "Company") (TSX VENTURE: CIL) is pleased to report that its 100% owned Italian subsidiary, Canoel Italia Srl., has recently completed maintenance operations and improvements of facilities at its San Teodoro Field. As a result, commencement of production is anticipated for late April 2014.
San Teodoro Field
Historical production rates between 1991 and 1993 were reported at 8,500 cubic meters per day (300 mcf/d or 50 boed), with natural gas being delivered to the Metaponto gas treatment plant. The original gas in place was estimated to be about 37million cubic meters (1,306 mmcf), with a recovery factor of 21.2%. The original P1UD (Proven Undeveloped) reserves estimate from the MP-1/B1-2 sandstone units appear to be conservative. In view of the recent refurbishing of facilities and the expectation that the final authorization to re-commence production will be granted shortly, the Company believes that the reserve classification will change from P1UD to P1D (Proven Developed).
As a result of studies carried out on this field in 2009-2011, the Company also believes that P2 reserves relating to the MP-1/B1-2 sandstone units can be increased by 1.8 million stm3. The P2 probable reserves relating to a different sandstone unit (the MP-2/A horizon), which could be produced after a future workover, have not been changed.
Production is expected to start at 5,000 cubic meters/day (176 mcf/d or 29 boed), and this will increase Canoel's existing production base and cash flow in Italy. The additional work required to produce the second sandstone unit (MP-2/A) is forecasted for 2017. Canoel is also pleased to report that a new prospect (Macchia Nuova) has been clearly defined by seismic interpretation within two kilometers from the San Teodoro well. Internal Company estimates assign prospective resources of 38.4 million cubic meters (1,356 mmcf) of natural gas to this new prospect.
The newly elected government of the Basilicata Region has recognized that increasing natural gas production will be a major key for economic growth. In this respect, the regional government has prioritized the file pertaining to the start of production of Canoel's Canaldente Field. The Canaldente Field is estimated to contain 21 million cubic meters of recoverable gas (approximately 742 mmcf). As previously reported, the Canaldente field was awarded to Canoel Italia Srl by the Economic Development Ministry after the Company successfully presented a development plan during a technical competition of peers.
The Canaldente Field is expected to produce 10,000 cubic meters/day (353 mcf/d or 59 boed) and commencement of operations is expected during the first quarter of 2015. The field is expected to produce from two sandstone units. The first unit was assigned a GOIP of 30 million cubic meters (1,059 mmcf) and recoverable gas of 13.8 million cubic meters (487 mmcf), assuming a recovery factor of 46 %. The second unit (level B) was assigned a GOIP of 20 million cubic meters (706 mmcf) and recoverable gas of 6.7 million cubic meters (237 mmcf), assuming a recovery factor of 33%.
We caution investors that the above numbers and calculations for the San Teodoro and Canaldente fields are Canoel internal estimates only and must be validated in the forthcoming NI 51-101 report for the year ending March 31, 2014.
Canoel CEO Andrea Cattaneo comments, "I am pleased to observe the progress on these two additional operated properties in Italy while, internationally, management continues to evaluate potential acquisitions of greater scale. Our technical team continues to prove its capacity to enhance production within Italy and is now managing eight onshore producing fields while, at the same time, overseeing the operations of three other non-operated fields. Canoel's producing licenses cover 837 square kilometers with net land holdings of 369 square kilometers (approximately 91,143 acres).
Canoel is a TSX-V listed company trading under the symbol "CIL". The Company's focus is creating shareholder value through the acquisition and development of low-risk exploration and production opportunities which offer strong logistics and close proximity to refineries and pipelines. Canoel's Management and Directors have extensive international and governmental experience and possess the contacts and technical knowledge necessary to execute their strategy.
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 release.
Certain information in this press release is forward-looking within the meaning of applicable securities laws, and related to anticipated financial performance, events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks, assumptions and uncertainties, which could cause the Company's actual results and experience to be materially different than the anticipated results or expectations expressed. 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.
In particular, forward-looking information and statements include, but are not limited to: (i) the capital expenditures required in order to re-commence production on both the San Teodoro Field and Canaldente properties; (ii) the ability of the Company to re-commence production; (iii) the price of natural gas in Italy; (iv) the ability of the Company to comply with certain regulatory requirements; (v) anticipated capital expenditures required to re-commence production; (vi) the Company's low overhead costs; (vii) the Company's ability substantially increase its oil and gas production by the end of 2014; (viii) the Company's ability to produce gas for industrial and retail markets in Europe.
These statements are based on certain assumptions and analysis made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) assumptions related to international natural gas prices; (ii) ability to obtain regulatory approvals; (iii) costs of construction and development; (iv) availability and cost of labour and management resources; (v) performance of contractors and suppliers; (vi) availability and cost of financing; (vii) assumption the Company will continue to focus its activities through low-risk exploration and production opportunities offering logistical and proximate locations to refineries and pipelines and gas ducts; and (viii) the Company's business strategy and outlook.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to, risks and uncertainties relating to: (i) political and economic conditions in the countries in which the Company operates or may operate; (ii) fluctuations in foreign exchange rates and natural gas prices; (iii) the Company's ability to access external sources of debt and equity capital; (iv) failure to obtain any required regulatory approvals; (v) regulatory and governmental decisions including changes to environmental legislation; and (vi) availability and cost of labour, equipment and management of resources.
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 as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. 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.