CALGARY, ALBERTA -- (Marketwire) -- 01/15/13 -- MENA Hydrocarbons Inc. ("MENA" or the "Company") (TSX VENTURE: MNH) is pleased to announce the following operational update.
Activities on the Company's 100% owned Lagia oil field in Egypt have re-commenced. A new progressive cavity pump ("PCP") has been installed in the Lagia well #9 which has produced over the last 12 days at an average stabilized rate of 90 barrels per day of approximately 16 degree API oil gravity. This PCP replaces the original sucker rod pump that was previously installed in Lagia #9.
MENA has also completed installation of required production facilities in the field with three oil storage tanks, a water tank, and a 500 barrel fuel tank and has connected all producing wells with flow lines.
Lagia wells #8 and #10, which were also drilled in 2012 and designed for steam injection, will be placed on production following an initial steam injection cycle to begin next month. The Company has signed an agreement with an experienced Middle East steam operator, Steamtech and Co. LLC, to provide steam injection equipment and personnel to start the steam injection operation in the field. Given the quality of sandstone reservoir and oil gravity, it is expected that production volumes from the wells will be significantly improved.
The two remaining production wells in the field, Lagia #6 and #7, were drilled by a previous operator and were not completed with thermal casing, however, their flow rates are expected to increase from their current 22 barrels per day with steam injection into the other nearby wells.
DeGolyer and MacNaughton Canada Limited evaluated the Lagia oil field and estimated the field's proved plus probable reserves to be 4.0 million barrels of oil and its proved plus probable plus possible to be 10.5 million barrels of oil. See below for additional information regarding our reserves disclosure. The Company plans to develop its reserves with primary and thermal recovery methods. The engineered development plan calls for up to 55 wells for full development of this current engineered Lagia fault block. MENA believes adjacent fault blocks may also be oil bearing.
The Company also plans to drill a 5,000 ft exploration well in the first half of 2013 to identify the source of 38 degree API oil that was recovered in the Lagia concession by a previous operator while drilling South Lagia #1. A location has been selected based on existing seismic data, and materials for the well have been purchased.
To date, the Company has delivered 4,600 barrels of crude oil inventory for sale to the General Petroleum Corporation of Egypt at an agreed price of $77 per barrel.
MENA is proceeding to complete the previously announced $500,000 private placement and has also received approximately $2.5 million of advances by certain officers, directors and shareholders of the Company. In addition, the Company is continuing its efforts to sell its Montana assets. These funds will be utilized to settle some of the Company's outstanding payables and continue operations in Egypt.
About the Lagia Oil Field
MENA is the sole participant in the joint venture company with EGPC, PetroSinai which operates the Lagia Development Lease covering a 32 square kilometre block of land located on the Sinai Peninsula, directly adjacent to the Gulf of Suez. In addition to the wells drilled by MENA in 2012, four wells had been drilled between the years 1949 to 2000 that had identified the Lagia oil field. Three producing oil fields, Sudr, Matarma and Asl, are located as close as 26 km to the north of the Lagia oil field.
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