Mayan Energy: Development Update from Stockdale Field Gas Discovery, Texas

Posted by OilVoice Press - OilVoice


Mayan Energy, the AIM listed oil and gas company, is pleased to announce its plans for the  development of the gas discovery at the Morris #1 well at Stockdale Field, Wilson County, Texas (see announcement dated 26 April 2018).  The Company has a 60.0% working interest (WI) and 45.0% net revenue interest (NRI) in the Stockdale Field.

  • Following evaluation by Mayan's technical team and consultation with local vendors, the Company has determined that on-site generation of electricity using gas volumes from the Escondido Sand formation is the most efficient and cost-effective course of action, requiring minimal additional capital expenditure
  • Initial production rate from this gas resource is anticipated to be significant and the Company believes that a sustainable rate of approximately 1.3 million cubic feet per day gas and 10-11 barrels of condensate per day is achievable with potential for further upside
  • A total of 20' of net pay estimated to contain 3 billion cubic feet of natural gas is considered to be recoverable (see announcement dated 26 April 2018)
  • Mayan is currently engaged in discussions with several municipal purchasers regarding a long-term contract including addition gas anticipated to be unlocked at the Stockdale Field as a result of the Company's planned development plans
  • The Company expects to realise pricing that will yield a premium to the spot price of the natural gas used to generate electricity if it were sold to a gas gathering / marketing company as is common practice in the United States
  • The production of this gas from the Morris #1 well will not generate any meaningful additional operating cost so this is exercise is expected to be highly economic
  • Necessary preparatory work needed to commence the generation of electricity from the natural gas discovery set to commence shortly; the Company shall update the market following commencement of production and any further material updates

Eddie Gonzalez, Managing Director, said,  “The monetisation of the gas discovery at the Morris #1 Well at the Stockdale Field is a bonus for the Company and the associated net revenue is expected to result in a rapid payback on investment.   With further development work planned across the field, we are optimistic of further upside and view this is as an excellent opportunity to create an additional revenue stream”.

The Escondido Sand formation, from 4358'to 4776' (feet) was identified using the Company's proprietary Quad Neutron Roke tool on the Morris #1 well.  A total of 20' of net pay estimated to contain 3 billion cubic feet of natural gas is considered to be recoverable.   The Company intends to generate electricity on site using gas volumes from the Escondido Sand formation to power a generator that will then be able to tie-in with and sell power to the electric grid. 

The Company has determined that the generation equipment necessary to convert the natural gas to electricity is available on a lease basis on terms favorable to the Company with a base monthly cost of approximately US$14,000. The investment required to implement this plan is limited to approximately US$50,000.00 including permitting; generating equipment; and the re-completion of the Morris #1 well in the Escondido Sand formation including the co-mingling of production with the upper and lower Anacacho zones.

The Company anticipates surface work will commence in June 2018 following which the Company will arrange for delivery of the necessary generating equipment and coordinate with the electric company to tie-in the generator to the electric power lines. Once the Company knows when the generator and tie-in will be completed, it will schedule the workover rig to perform the downhole work necessary to initiate production and will update the market further as developments necessitate.

Special note concerning the Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR").  Market soundings, as defined in MAR, were taken in respect of the Subscription, with the result that certain persons became aware of inside information, as permitted by MAR.  That inside information is set out in this announcement.  Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

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