Madalena Energy's 2P reserves lifted by 8% at year end

Madalena Energy Inc (CVE:MVN) saw an increase in its 2P (proved plus probable) reserves by 8% at the end of 2016 – a year, in which it cut costs and conserved cash.

Since then, in March. significantly, Madalena’s partner PAE has re-entered the Vaca Muerta in Argentina and kicked of drilling at the Coiron Amargo Sur Este (CASE) shale block with a horizontal well.

As part of a farm-out in 2016, PAE will fund 100% of the cost of a two well program up to the first US$16 million which is a net benefit to MVN’s of US$5.6mln.

The closing of the CASE deal provided Madalena with cash payments up to $10 million and it transferred a 55% interest and operatorship in CASE to PAE.

Madalena retains a 35% interest in the CASE block as well as its 35% interest in the Coirón Amargo Norte block- the other region of the Coirón Amargo block.

The oil firm also sold 1.6 million Point Loma Resources Ltd  (CVE:PLX) in January this year for net proceeds of $0.5 million, and 4.7 million escrowed common shares in Point Loma in April 2017 for gross cash of $800,000 million.

These shares had been acquired when Madalena sold its Canadian oil and gas assets in June last year.

For 2016, Madalena reported a net loss from continuing operations of $32.1 million, had a working capital deficit of around $4.4 million and has significant future capital commitments to develop its properties.

Argentina proved plus probable (2P) reserves increased 8% from 9,134 MBoe to 9,899 MBoe, which include 2.3 Mboe (2015 – 0.9 Mboe) associated with Madalena’s undeveloped unconventional assets in the Vaca Muerta shale, the firm said.

Story by ProactiveInvestors