Phoenix Global Resources - Mata Mora and Corralera Working Interests Increased to 90% and Award of Four New Neuquén Province Blocks
Phoenix Global Resources - Mata Mora and Corralera Working Interests Increased to 90% and Award of Four New Neuquén Province Blocks
LONDON, April 30, 2018 /PRNewswire/ -- Phoenix Global Resources plc (AIM: PGR) (BCBA: PGR) is pleased to announce the renegotiation of its Mata Mora and Corralera block interests in accordance with the memorandum of understanding (MOU) mentioned in the readmission document published on 24 July 2017. Phoenix also announces the award of four new blocks in the recent Neuquén Province bid round.
Highlights
-- The Company increased its acreage in the core Vaca Muerta play,
converted its non-operated position to operated position, and gained
four new blocks in the Neuquén province
-- The Company's interest in Mata Mora and the retained part of Corralera
is increased from 27% to 90% with Phoenix assuming operatorship
-- In 2018, two horizontal Vaca Muerta wells are planned in the Mata Mora
block, which is on trend and immediately next to one of the most
prolific blocks in the Vaca Muerta play
-- Four new exploration blocks awarded in the April 2018 Neuquén province
bid round
-- Phoenix is awarded operatorship on all new acreage secured in the bid
round
-- Licence fees of US$10 million related to new and renegotiated acreage
will be due to the Neuquén province at completion
-- Phoenix's Vaca Muerta net operated acres increased by 14.5% to 560,000
acres, representing approximately 7.5% of the entire Vaca Muerta acreage
-- An additional 70,000 net acres of other unconventional prospects secured
in the bid round
The Company has entered into a number of joint venture agreements with the province owned Gas y Petróleo del Neuquén (GyP) and related to both the Mata Mora and Corralera blocks. These blocks, until now, had been the subject of an MOU between GyP, the subsidiaries of Phoenix and Integra Oil & Gas S.A. ("IOG"). In order to conclude the agreement with GyP on the terms outlined in this announcement, IOG has agreed not to participate in the blocks and the Company may agree to a suitable compensation to IOG. The joint venture agreements take the Argentina legal form of Uniones Temporales de Empresas or 'UTE' and secure Phoenix's rights to approximately 100,000 acres of Vaca Muerta exposure. This agreement with GyP provides the foundation for the appraisal and, ultimately, development of the Mata Mora and Corralera acreage.
In addition, the acquisition of a further four new exploration blocks in Neuquén Province together add an additional approximate 11,000 net acres with Vaca Muerta exposure and a further 70,000 acres of other unconventional exposure.
Management believes that the potential for the unconventional development in the proposed areas is high and the Company intends to carry out the three-year work commitments as conferred by the licence awards.
Commitments/Work programme
Mata Mora - Under the revised licence terms, Phoenix has committed to drill two horizontal wells in the Mata Mora block and expects to fulfil this commitment in 2018. The planned wells will be drilled consecutively in order to minimise mobilisation and de-mobilisation costs of drilling crews, associated equipment and other service costs.
Corralera - As part of the agreed and revised Corralera licence commitments, Phoenix will drill a well on each of Corralera Sur and Corralera Noroeste blocks. It is expected that these wells will be drilled in 2019 or 2020.
La Tropilla I - The Company plans to fulfil a portion of the licence commitments including the reprocessing of existing seismic data in the 2018/19 timeframe and, based on the results of the seismic interpretation, potentially drill an initial well at La Tropilla in 2020.
Aguada de Castro Oeste I, Aguada de Castro Oeste II & Santo Domingo I - In furtherance of its commitments in the Aguada de Castro Oeste area the company plans to carry out geochemical and seismic work and to drill an initial well on Aguada de Castro Oeste I, potentially in 2019/2020.
Anuj Sharma, CEO said:
"We are delighted to have renegotiated and increased our working interest in now PGR-operated Mata Mora and Corralera blocks from 27% to 90% as well as adding four new operated blocks in the Neuquén Province to Phoenix's portfolio in the recent Neuquén bid round. Together, these agreements will mean that Phoenix's acreage position now covers approximately 7.5% of the entire Vaca Muerta formation. We have also signed an LOI with Nabors to secure a drilling rig in order to immediately start our horizontal drilling campaign in the Neuquén province.
Phoenix has an active work programme across our portfolio for 2018 based on our accelerated business plan, which focuses on multiple unconventional targets in the Neuquina Basin."
Notes
Summary of Phoenix Mata Mora and Corralera position following finalisation of the MOU terms
Concession* Original interest Per MOU Revised interest Original Additional Indicative
Vaca Vaca cost per
Muerta Muerta acre
acres acres US$
--- --- ----- --- ---
Mata Mora 27% 90% 90% 14,945 34,871
Norte
-----
Mata Mora Sur 27% - 90%
------------- --- --- ---
Corralera 27% 90% 90% 7,139 16,657
Noroeste
--------
Corralera Sur 27% 90% 90% 7,872 18,370
------------- --- --- --- ----- ------
Corralera 27% - 9,274 (9,274)
Noreste
-------
Total Mata Mora/Corralera VM unconventional 39,230 60,624 661
------------------------------------------- ------ ------ ---
* all areas/concessions to be operated by Phoenix
Summary of new exploration licences granted in Neuquén Province April 2018 bid round
Concession Exposure Commodity Additional unconventional acres* Indicative cost per acre US$
---------- -------- --------- ------------------------------- ----------------------------
Vaca Muerta
-----------
La Tropilla I Vaca Muerta Oil 10,808 1,573
------------- ----------- --- ------ -----
Total other areas VM unconventional 10,808 1,573
----------------------------------- ------ -----
Other conventional
------------------
Aguada de Mulichinco and Gas 18,237 299
Castro Oeste I Agrio
-------------- -----
Aguada de Mulichinco and Gas 26,688
Castro Oeste II Agrio
--------------- -----
Santo Domingo I Mulichinco and Gas 24,908
Agrio
--- -----
Total other non-VM unconventional 69,833
--------------------------------- ------
* 90% of total acreage, assuming GyP exercises right to participate at a 10% level
About Phoenix
Phoenix Global Resources is a London Stock Exchange (AIM: PGR) and Buenos Aires Stock Exchange (BCBA: PGR) listed independent Argentina focused oil and gas exploration and production company. The Company has over 6.3 million licensed working interest acres in Argentina (of which over 5 million are operated), 61.7 million boe of working interest 2P reserves and average production of approximately 11,070 working interest boepd in 2017. Phoenix has significant exposure to the unconventional opportunity in Argentina through its 560,000 working interest acres with Vaca Muerta potential.
The Company's website is www.phoenixglobalresources.com
For further information, please contact:
Phoenix Global Resources
Anuj Sharma, CEO: T: +54-11-5258-7500
Philip Wolfe, CFO: T: +44-20-3912-2805
Stockdale Securities
Antonio Bossi: T: +44-20-7601-6100
Ed Thomas
Panmure Gordon
Adam James: T: +44-20-7886-2500
Atholl Tweedie
Camarco
Billy Clegg: T: +44-20-3757-4980
Owen Roberts
James Crothers
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SOURCE Phoenix Global Resources
