Madalena Ventures (CVE:MVN) gave investors this morning an update on its Coiron Amargo block in Argentina today, saying its CAN-8 development well was successfully completed for production, and is flowing at around 178 barrels per day (bbls/d) 12 days without fracking.
The oil and gas producer also noted it is making progress on plans to tie in four to five wells before spring break-up on its assets in Alberta, with its goal nearly achieved.
The junior oil and gas E&P company is focused on ramping development across three key light oil and liquids-rich resource plays in Canada while delineating large-in-place shale and unconventional resources in Argentina.
On the Coiron Amargo block in Argentina, where the company has a 35% working interest, the CAN-8 development well, located 800 metres southeast of the existing CAN-7 oil producer on the northern portion of the block, was completed over the last few weeks.
It was then perforated without any stimulation and production tested in the Sierras Blancas light oil zone for a period of three days. The average production rates over the three day test period were 482 bbls/day (168 bbls/day net) at an oil cut of 96%, and 525 mcf/d (184 mcf/d net) of associated gas.
The company said that given the results of the test, it placed the wellbore on production without further stimulation or fracture treatment to further assess the overall production performance.
After 12 days of continuous production, CAN-8 is currently flowing at around 178 bbls/day gross (62 bbls/day net) at an oil cut of 88% and 337 mcf/d gross (118 mcf/d net) of associated gas.
This location may be further stimulated in the Sierras Blancas in the future, Madalena said, and also has an approximate 104 metre thick section of the unconventional and prolific Vaca Muerta shale.
This year, the company is planning to focus on a combination of workovers and new development and exploration drilling at its assets in Argentina, focused on oil in the Vaca Muerta shale, alongside development work in the Sierra Blancas at its Coiron Amargo block and the testing of a thick 577 metre Quintuco zone on its Cortadera block.
Madalena holds three large blocks - Coiron Amargo, Curamhuele, and Cortadera - within the prolific Neuquén Basin of Argentina, where joint venture activity is bussling.
Later this year, it said additional high impact zones of interest could be further tested along its assets, including more work in the Vaca Muerta shale, the Lower Agrio shale and thick tight sands within the Mulichinco.
Aside from its development plans in Argentina, Madalena holds 153 net sections of land in the Greater Paddle River area of Central Alberta, containing three oil and liquids rich plays - Ostracod, Wilrich/Notikewin, and Nordegg.
The company is on track to drill between four and five horizontal wells in the region before spring break-up, and with steady drilling planned through 2013, production could grow from 900 barrels of oil equivalent per day (boe/d) to more than 2,000 boe/d at exit this year.
The junior recently completed two Ostracod oil wells, and expects both these wells to be on stream prior to spring break-up, with completion operations now underway at the Nordegg horizontal well.
Its Notikewin well is expected to be placed on production over the next week.
National Bank Financial initiated coverage late Wednesday on Madalena Ventures (CVE:MVN), with an outperform rating and a 12-month price target of $1.00, saying that current share price levels offer an attractive entry point for investors ahead of several key Canadian and Argentinian well results.
Madalena also received coverage Thursday from broker Casimir Capital, which maintained its $1.30 price target on the junior.
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