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MAHA TO 2 A - Maha Energy AB News Story

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Last Trade - 26/05/21

Sector
Energy
Size
Small Cap
Market Cap £131.5m
Enterprise Value £149.4m
Revenue £31.4m
Position in Universe th / 1872

Maha Energy AB (publ) (“Maha” or the “Company”) confirm 42° API oil in new Itaparica oil reservoir and announce the hook up of Tie-3 well to Tie production facilities

Thu 6th May, 2021 6:40pm
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The Tie-3 oil producing well has tested a combined 628 BOEPD(1), (549 BOPD, 0
BWPD and 470 MSCFPD of gas) from the Itaparica and Agua Grande reservoirs. The
Sergi reservoir was not tested at this time.

The recently completed rig-site test of the Tie-3 well flowed oil and gas at a
rate of 410 BOPD and 369 MSCFPD (472 BOEPD(1)) from the Agua Grande reservoir
only. The deeper Itaparica and Sergi reservoirs have not been completed at
this time.  The newly discovered Itaparica formation was extensively tested
and flowed 42° API oil to surface at an initial peak and unstable(2) rate of
approximately 139 BOPD. It is too early to determine the impact of this find
on the Tie field oil volumes, if any.

Jonas Lindvall, CEO of Maha Energy commented “Tie-3 is designed as a water
injector on the southwestern flank of the field.  Whilst drilling the well, a
new and hereto untested formation was encountered above the Sergi reservoir
(called the Itaparica) which we have tested with encouraging results.  The
oil is of higher quality compared to the Agua Grande and Sergi reservoirs. 
Although initial indications are that the Itaparica formation is tight, oil
free flowed to surface and we believe modern stimulation technologies can be
applied to improve productivity of this zone.  Work will now focus on
determining the potential size of the Itaparica and an appropriate stimulation
technology to increase the productivity.”

Tie-3 Test Results

The Tie-3 well was designed as a long term water injector well at the
southwestern flank of the Tie structure with an initial oil production phase
prior to use as an injector.  With the discovery of the Itaparica and the
full oil column in the Agua Grande, the well will produce oil until water cut
increases and allows for an efficient water injection point in the Tie
field.  Three reservoirs were penetrated at the Tie-3 location; the Agua
Grande (11 m. net pay), Itaparica (3.1 m net pay) (new) and Sergi (1.6 m net
pay above the oil water contact).

The Itaparica was flow tested whilst recording bottom hole flowing pressures
which confirmed the reservoir was at virgin pressure and not connected to the
Agua Grande or Sergi reservoirs.  After an initial unloading of the diesel
cushion, the well flowed a mixture of oil and gas at an unstable rate of 139
BOPD.  After the initial flow period, swabbing assistance was required to
provide continuous inflow to the tubing string, suggesting either a low
permeability or skin-damaged wellbore.  Upon retrieval of downhole gauges and
a series of build-up tests, initial analysis suggests a permeability of 1-3
mD, and a skin damage of ~+25.

Further studies are now underway to determine the best stimulation technology
to improve productivity of the Itaparica.  A direct analogy in Brazil, is the
Penedo sandstone in the Tartaruga field where initial and unstimulated
productivity can be increased significantly by the application of hydraulic
stimulation.

Upon completion of the Itaparica tests, the Agua Grande zone was opened up for
clean-up flow.  During a short 24 hour clean up period the Agua Grande free
flowed 37° API oil to surface at an average rate of 410 BOPD, 0 BWPD and 369
MSCFPD. The well was then hooked up to the production facilities.

Tie-3 (Itaparica)
Initial free flow test results from the Itaparica are as follows:
Oil
Production                                                   
: 139 BOPD(2) (unstable rate)
Water
Production                                             
: 0 BWPD
Gas
Production                                                 
: 101 MSCFPD
BOEPD                                                                
: 156 BOEPD
Choke
Size                                                          
: 1-1/2”
Flowing Wellhead Pressure                             : 0 psi

Tie-3 (Agua Grande)
Initial free flow test results from the Agua Grande are as follows:
Oil
Production                                                   
: 410 BOPD
Water
Production                                             
: 0 BWPD
Gas
Production                                                 
: 369 MSCFPD
BOEPD                                                                
: 472 BOEPD
Choke
Size                                                          
: 1”
Flowing Wellhead Pressure                             : 80 psi

(1) BOEPD : Barrels of Oil Equivalent per Day; 6,000 SCF = 1 barrel of oil
(2) It was not possible to attain a stable rate during the Itaparica test and
the test was cut short after the swabbing equipment failed prompting the
operations to focus on the shallower Agua Grande reservoir.

MSCFPD = thousand standard cubic feet per day
BWPD = Barrel of water per day
BOPD = Barrels of Oil per Day

This information is such information as Maha Energy AB (publ) is obliged to
make public pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact person set out
below, at 19:40 CET on May 6, 2021.

For more information, please contact:         
Jonas Lindvall (CEO)
Tel: +46 8 611 05 11        
jonas@mahaenergy.ca

Victoria Berg (Investor Relations)
Tel: +46 8 611 05 11       
victoria@mahaenergy.ca

About Maha
Maha Energy AB (publ) is a listed, international upstream oil and gas company
whose business activities include exploration, development and production of
crude oil and natural gas. The strategy is to target and develop
underperforming hydrocarbon assets on global basis. Maha operates four oil
fields: Tartaruga and Tie in Brazil, Powder River (LAK Ranch) and Illinois
Basin in the United States. The shares are listed on Nasdaq Stockholm (MAHA-A
(https://www.globenewswire.com/Tracker?data=AjotVpCYOOIfDcO-Dd1xdLzHU0u90gBrXW4MQQJi8upnt-gWAJgqCitT_Vl_SWQ9ZYM_w82qFb2kWL2XeZqvODUGPA7v6Wm64kaWe4rNUBW7U2RrcES1mq87nP4ULSE-CYkCqSoqkZK-a92zpqtyag==)).
The head office is in Stockholm, Sweden with a technical office in Calgary,
Canada, as well as operations offices in Grayville, Illinois, USA and Rio De
Janeiro, Brazil. For more information, please visit our website
www.mahaenergy.ca

Attachment
*     20210506 Maha Energy Test Result ENG FINAL
(https://ml-eu.globenewswire.com/Resource/Download/e370b6dd-38a2-422f-94aa-792898d9c72a)
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