Mayan Energy Limited (AIM:MYN) Operations Update

 

Operations Update – Completes Production Facilities at Forest Hill Field;

Workover Rig on Location at Stockdale Field

Mayan (AIM: MYN), the AIM listed oil and gas company is pleased to announce it has completed a tie in of four wells to its newly completed production facility at Forest Hill Field, Wood County, Texas (“Forest Hill”) ; these four wells produced a combined 187 gross barrels of oil in the initial 24-hour period.  Additionally, the Company is pleased to announce that it has a workover rig on location at the Kelly Lynne Field, Stockdale Field Wilson County Texas (“Stockdale”).

 

Forest Hill Field, Wood County, Texas (Mayan 70% Working Interest / 52.5% Net Revenue Interest)

 

·     With the completion of the production facilities the Company can now produce all of its wells simultaneously and has accordingly initiated commercial operations at Forest Hill Field

·     Successfully installed 2 heated oil storage tanks with a total oil storage capacity of 510 barrels and one water storage tank with 300 barrels water capacity

·     Surface and pad site prepared to facilitate rapid expansion of storage capacity as required and can now quickly double capacity as additional wells are brought on line

o  Given proximity to crude purchasers, the Company can accommodate up to 4 loads per day of up to 180 barrels of oil per load. The storage capacity is primarily necessary to handle bad weather days which limit pick up of produced oil

o  In the upcoming summer months, which traditionally has little precipitation in this area of Texas, the facilities on location should be sufficient near term to accommodate additional wells coming on line

·     The Glibreath 15, 19, 48 and 49 wells have been tied in to the facilities and added to overall production on Friday, 29 March 2018.  In the initial 24 hours following tie-in the wells produced 187 gross barrels of oil and approximately 30 barrels of salt water of which the Company’s net production is 98 bopd

·     With these wells now producing into the fully operational production facilities, the Company’s production at Forest Hill is 187 gross bopd and 98 net bopd with four additional wells to be tied in subject to completion of various work and regulatory approvals

·     The production rate achieved was better than expected, with an unstimulated 187 barrels produced during the initial 24 hours following tie-in. This will naturally decline as expected of oil and gas wells.  The Company is pleased with this result, but intends to stimulate the wells in coming months

·     The Company is currently evaluating additional wells at Forest Hill that, subject to agreement with the vendors of these additional wells, will initiate Phase 2 of its work program with the intention of identifying 20-30 additional workover candidates and selecting 8-12 for its Phase 2 work program to commence in Q2 2018

·     Additional work is planned to bring on an additional three wells at Forest Hill Field in the coming weeks once the Company has completed the work currently underway at the Stockdale Field in Wilson County, Texas

 

Stockdale Field, Wilson County, Texas (Mayan 60% Working Interest / 45% Net Revenue Interest)

 

·     Further to the Company’s 13 February 2018 RNS, a workover rig is on location to complete workover of its injection well and acidization and comingling of the upper and lower Anacacho zones in the Morris#1 well

·     The cost of trucking water from the Morris #1 had proven prohibitive to initiating commercial production operations at Stockdale Field, as a result the Company was forced to temporarily shut in the well until completion of its salt water injection well

·     The Company is acidizing the Morris #1 well washing out the bottom sand plug to facilitate production from both zones

·     The initiation of operations on the injection well will allow for continuous commercial production and substantially reduce operating costs avoiding expensive trucking of produced water volumes to commercial disposal facilities

 

Eddie Gonzalez, Managing Director, said: “While the last few months have seen a larger than expected number of lost work days due to unanticipated levels of precipitation, we used the time well completing upgraded production facilities at Forest Hill Field to support the aggressive development drive we are pushing through in Q2.  The solid production we announce today is an important milestone for Mayan, representing the first sustainable, diversified, internally generated cash flow base the Company has had.  The stability and financial flexibility resulting from having a significant volume of daily production will facilitate continued development of our assets with additional wells and production to be added at Forest Hill and Stockdale in coming weeks.”




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