Business
Madalena comments on Argentina oil prices and provides a 2015 Capital Budget update
TSXV Trading Symbol: MVN OTC Trading Symbol: MDLNF CALGARY , Jan. 7, 2015 /CNW/ - Mad...
About this update from Centaurus Energy Inc.
[{"type":"text","content":"\n\nTSXV Trading Symbol: MVNOTC Trading Symbol: MDLNF\n\n\n\nCALGARY, Jan. 7, 2015 /CNW/ - Madalena Energy Inc. (\"Madalena\" or the \"Company\") (TSXV: MVN and OTC: MDLNF) provides the following comments on recent changes to regulated Argentina oil prices and updates its 2015 Capital Budget as outlined below.\n\nREGULATED ARGENTINA OIL PRICE MARKET\n\nIn Argentina, oil prices are set by the government for product sold into the domestic oil market, which is where Madalena sells the oil from its Argentine operations. For many years Argentina's domestic oil prices were well below the Brent oil benchmark price. Since May 2014, oil prices in Argentina have remained above USD $83 per barrel while Brent oil prices have sharply declined from USD $115 per barrel to USD $53 per barrel.   \n\nThe regulators in Argentina have set January 2015 oil pricing at approximately USD $77 per barrel for Medanito crude quality oil compared to the December 2014 posted price of approximately USD $83.90 per barrel of oil. The USD $77 posted Medanito crude oil price in Argentina for January 2015 is approximately 37% higher than the comparative period Brent price of USD $56 per barrel.\n\nMADALENA 2015 CAPITAL BUDGET \n\nMadalena's board approved a 2015 Capital Budget of up to CDN $48 million as press released on December 15, 2014. This 2015 Budget was based on USD $80 per barrel Medanito oil pricing. Each dollar change in oil price in Argentina represents approximately +/- CDN $1 million to the full year funds flow of the Company. Given the changes to the commodity price environment, Madalena plans to defer CDN $3.6 million of budgeted capital expenditures between Argentina and Canada. \n\nWith approximately 90% of the Company's oil production priced relative to Argentina's regulated oil prices, the Company continues to be well positioned and expects to fully fund the 2015 capital program with funds generated from operations and existing working capital.  Madalena also expects to end 2015 with positive working capital.\n\nManagement and the Board will continue to monitor its political, market and commodity price environment, with a view to protecting Madalena's financial position in the context of its contractual and regulatory obligations.\n\nABOUT MADALENA – International and Domestic Assets\n\nMadalena is an independent, Canadian...