Those quarter 1 numbers are coming out soon, just 1 week away
To keep it simple when you produce the oil the reserve amount is reduced. Thus it is booked as a loss of capital
"Depletion is the using up of a natural resource by mining, quarrying, drilling, or felling. Depletion allowance, then, is the allowance available through the IRS code allowing an owner to account for the reduction (production) of reserves as a product is produced and sold. For purposes of this article, the depletion allowance we are concerned with is the depletion allowance associated with the production of oil and/or gas. The depletion allowance, like depreciation, is a form of cost recovery for capital investments. There are two ways of calculating depletion allowance: cost depletion and percentage depletion. Oil and gas royalty owners have the availability of using either, yet for mineral properties you must generally use the method that gives you the larger deduction."
Maybe a short drop due to new shares BUT the purchase was cheap, over 3000 flowing bbls and 2.5 million in proven reserves all for 63 million. PLUS 2 new wells coming on line at any time PLUS 900,000 new acres
I say after the short buying opportunity look to move back into the mid to upper 70s quickly
They picked up over 3000 flowing barrels and 2.5 million on reserves for 63 million. Very cheap in my opinion. They are working on a jv in one of their own sections that they still hold 96% of. The area just keeps showing new stuff. Big time stacked play
They can take money out if they sell out. Great Canadian lands
I think we get a new PR and presentation tonight., no more than 2 to 3 days max. Remember this is a Canadian company and the live by a different set of rules. Nothing unusual here.
Pirate, they pulled their presentation Friday with big deal with GTE in Argentina. I expect an updated presentation today and there is a lot of info in there on Canada
Madalena's Paddle River wells are far better performers, they have much more land and already are around 1200 bopd production for sale to pipe
Then the big deal they just made in Argentina to boost total current production to 5000 boepd plus with several wells coming on line soon to add to the total. Every stock has its risk but worth a look
Below is on the Madalena Ostracod section
This horizontal resource play focuses on Ostracod light oil (30 degrees API gravity) and is highlighted by a 50 net section acreage position and a significant inventory of identified, drill-ready horizontal locations. The high quality reservoir is within a marine sandstone that was deposited throughout the area in widespread shoreface sand bars. Madalena's 100% working interest Ostracod horizontal well (Paddle River 01-05), which was put on-stream in mid-October 2012, is exceeding the company's expectations and is continuing to flow without the assistance of pumping equipment. The IP 30 day average rate on this horizontal was 307 boe/d (65% oil and liquids) and it continues to flow in early November 2013 at approximately 200 boe/d. Madalena has drilled 3 additional 100% working interest horizontal wells to date on this play and has enjoyed progressively better results. The most recent well (Paddle River 01-32) has tested at rates of 957 boe/d (87% oil and liquids). Madalena plans to steadily develop this play and will build upon the operational efficiencies, improved results and cost savings experienced as the company increases its understanding of this high-impact oil resource play.
This could/should be a big opportunity for Caliber to grow
"As for regulations, the NDIC in March (2014) approved rules that soon will require oil producers to file gas capture plans (GCPs) for new drill sites before they apply for drilling permits. The rule kicks in on June 1, 2014, and the requirement for GCPs will be expanded on September 1, 2014 to owners of existing flaring wells that flare more than 300 Mcf/d (these 200 or so larger wells account for 60% of the total gas flared) and to owners of smaller flaring wells on March 1, 2015. GCPs are a way of having producers show that while their primary focus may be on extracting oil, they also have thought through how they plan to deal with the associated natural gas and natural gas liquids (NGLs) their wells will produce. (Most Bakken gas is very rich in NGLs; 1 Mcf of raw gas may contain eight to 12 gallons of NGLs—another economic incentive to capture and move to market all that a well produces.)
GCPs will include basic information such as well location and the nearest pipeline and processing plant, as well as expected gas production volumes and the producer’s plan for gathering and transporting gas from the well—plus a timeline for achieving that. NDIC also is considering a rule that would require producers to curtail oil production from wells until they are connected to gathering pipelines sufficient to collect all of the associated gas produced. The commission would exempt a producer from the requirement if it can be proven it would be economically infeasible to connect a well to a gas gathering pipeline. But producers are concerned about how the curtailment rule might play out, and instead are urging the NDIC to first see how the GCP approach works in reducing flaring. The commission’s final decision on the matter is expected within the next few weeks.
The Bakken’s gas flaring is largely tied to what had been the region’s lack of gas gathering and processing infrastructure, so it is easy to see how the combination of GCPs and the accelerating, economics-based infrastructure build-out in the Bakken will put a real dent in the portion of associated gas that needs to be flared. There are other challenges out there though, and they are what make it so tough to get Bakken flaring below 10%. For example, one of the biggest hurdles to getting gas gathering lines sited and built quickly is the six months or more it can take to acquire rights of way (ROW) from private landowners or from the Fort Berthold Indian Reservation (FBIR), a key oil production area in western North Dakota. Tribal policies (such as a minimum half-mile setback between any occupied structure and a pipeline) also complicate things, as do the region’s rugged topography and long winters. You cannot change the Bakken’s topography or weather, but producers are working with the NDIC, the North Dakota Pipeline Authority, landowner groups and other stakeholders on how state law might be changed to reduce ROW-acquisition and permitting delays that have slowed infrastructure development and extended the necessity for flaring.
I must have been MAD, it is the DEAD Cow of course.
This appears to have been a great purchase by Madalena, 3,000 bbl of production with 2 wells coming on line soon. 900,000 net acres plus a complete operational organization in place.
Price may drop a bit when trading is resumed but if anyone is interested that would in my opinion be a great buying opportunity.
Keep an eye out for Madalena's updated presentation to be posted.
The monster Proa-2 found 31 meters of net pay. Since the drilling is complete we should have results reasonably soon I would think
"Surubi Block, Noroeste Basin (Gran Tierra Energy 85% WI and operator, Operator, Recursos y Energia de Formosa S.A. 15% WI)
Gran Tierra Energy has reached TD at 3,920 meters in the Proa-3 development well. The well encountered approximately 20 meters of net pay potential in the Palmar Largo formation. A testing program is being designed to determine reservoir and fluid properties."
That will be out prior to trading resuming and of course I look forward to seeing the new info.
Really want to see some maps placing the southern land vs what they already control. Also looking for more info on the monster Proa-2 well in the northern section, how its producing now and an update on the offset being drilled.
There are several wells in Argentina coming on line this summer that could boost production sunstantially.
If the price falls it may be time to add to my position
There is a secondary offering for 100 million shares at 50 cents so yes, expect a short down turn. My feeling though that this is highly positive and the price should move up very quickly
For any of you following the Mad Cow Madalena just made a HUGE purchase in Argentina. Be interesting to see how it is received. but one well on the acquired property IPed at 6300 BOPD and was put into production at 2000 bopd which it continues to flow at 2 years later
This is HUGE guys, visit the TSX exchange for full PR
"Madalena Announces Transformational and Strategic Acquisition in Argentina Increasing Production to 4,900 boe/d and a CDN$50 Million Bought Deal Financing
CALGARY, ALBERTA--(Marketwired - May 29, 2014) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
Madalena Energy Inc. ("Madalena" or the "Company") (TSX VENTURE:MVN)(PINKSHEETS:MDLNF), is pleased to announce that it has entered into an agreement to acquire (the "Acquisition") the Argentinean business units of Gran Tierra Energy Inc. ("Gran Tierra"). The Acquisition is highly accretive and includes Proved and Probable ("2P") reserves of 6,513 mboe at December 31, 2013, estimated production on close of the Acquisition of approximately 3,300 boe/d (~78% oil), 11 exploration and production blocks comprising approximately 890,000 net acres and a fully functional independent business unit in Argentina with an experienced technical and operational team. The purchase price is US$63 million, payable in US$49 million cash and 27,661,971 common shares of Madalena ("Common Shares") at a deemed issue price of CDN$0.55 (US$0.506).
In connection with the Acquisition, Madalena has entered into an agreement with Dundee Securities Ltd. as lead underwriter and sole bookrunner ("Lead Underwriter") on behalf of itself and a syndicate of Underwriters including RBC Capital Markets, Haywood Securities Inc., Beacon Securities Limited, National Bank Financial Inc., FirstEnergy Capital Corp., Mackie Research Capital Corporation, TD Securities Inc., Canaccord Genuity Corp., Jennings Capital Inc. and Raymond James Ltd. (the "Underwriters") for a bought deal equity financing, ("Financing"), for aggregate gross proceeds of CDN$50 million (described in more detail below).
The Acquisition provides Madalena with a solid platform for growth which more than triples the Company's production base and significantly increases cash flow from its Argentinean asset