Madalena Ventures Inc.
TSX VENTURE : MVN

Madalena Ventures Inc.

October 03, 2007 08:30 ET

Madalena Announces Second and Third Joint Venture Blocks in the Neuquen Province of Argentina

CALGARY, ALBERTA--(Marketwire - Oct. 3, 2007) - Madalena Ventures Inc. (TSX VENTURE:MVN) ("Madalena" or the "Company") is pleased to announce that its officially recognized branch in Argentina, Madalena Ventures Inc. (Sucursal Argentina), has executed Letters of Intent with Hidrocarburos del Neuquen Sociedad Anonima, ("HIDENESA"), the Neuquen Provincial Hydrocarbon Company, and received approval for work commitment programs from HIDENESA to pursue exploration activities on two new exploration blocks ("Blocks") in the Province of Neuquen, Argentina. The announcement of these two new Blocks known as Curamhuele and Coiron Amargo, follows the September 17, 2007 news release announcing the signing of a letter of intent and approval of the work commitment by HIDENSA on Madalena's initial joint venture on the Cortadera Block in Neuquen.

Madalena Ventures Inc. (Sucursal Argentina) will have an initial minimum 70% participating interest in the Blocks. The other parties in the Blocks are Roch SA ("Roch") with the option to participate for 20% and HIDENESA 10%. Madalena will have the right to acquire an additional 20% participating interest in the Blocks in the event Roch does not elect to acquire its interest on or before March 1, 2008. Final approval to the joint ventures is subject to the execution of formal operating agreements among the parties.

The Curamhuele and Coiron Amargo joint ventures each carry an initial three year exploration term with work commitments of $US 3.0 million and $US 5.0 million respectively in exploration expenditures on the Blocks, including seismic and the drilling of at least one exploration well on each Block. All parties in the Blocks with the exception of HIDENESA are proportionately responsible for expenditures incurred during the initial exploration term. Upon encountering commercial production on a Block, a development plan would be implemented with a 12% royalty payable to the Province of Neuquen and a concession term of 25 years, with an option to request an additional 10 year extension. There is a 1% overriding royalty reserved to a third party on the Curamhuele Block. During the development phase, HIDENESA is responsible for its share of operating and development costs which are recovered from 80% of their 10% share of production proceeds.

The Neuquen Basin is the most prolific oil and gas producing basin in Argentina and contains a number of fields with oil and natural gas reserves ranging as high as 25 trillion cubic feet of gas and 800 million barrels of oil.

The Curamhuele Block is situated along the eastern edge of the north south running thrust belt on the western side of the Neuquen Basin and is approximately 170 km2 (39,500 acres) in size. The Block has the potential for 4 different play types targeting both oil and natural gas and ranging in depths from 1700 meters to 3600 meters. The Block is in close proximity to a number of prolific fields along this trend, including the Filo Morado field which is located only 5 kilometers from the Block and has produced 62 million barrels of oil equivalent, comprised of approximately 50% natural gas and 50% light oil and condensates. The El Porton field is also located on the same trend 20 kilometers to the north, and has estimated recoverable reserves of 45 million barrels of oil and 282 billion cubic feet of natural gas producing from a depth of approximately 1700 meters. Two wells previously drilled on the Block tested significant volumes of oil and natural gas products and demonstrate the strong presence of hydrocarbon productivity on the Block. Madalena will have access to approximately 2000 kilometers of existing seismic data located on the Block and will conduct additional seismic on the Block to further delineate existing leads for drilling locations.

The Coiron Amargo Block is situated along the eastern side of the Neuquen Basin and is approximately 400 km2 (100,000 acres) in size. This Block also has the potential for 4 different play types targeting oil and natural gas ranging in depths from 2200 to 3,600 meters. The Coiron Amargo Block is in close proximity to a number of prolific fields including Borde Montuoso with reserves of 12 million barrels of oil equivalent, Charco Bayo/ Piedras Blancas with reserves of 300 million barrels of oil equivalent, and Loma de la Lata with reserves of 1.7 billion barrels of oil equivalent, all located within 20 kilometers of the Block. Two recently drilled wells offsetting the Block are currently producing oil at rates of approximately 400 barrels of oil per day. Madalena has access to approximately 900 kilometers of existing seismic data located on the Block which indicates the continuation of fault trends from this offsetting producing block extending across Coiron Amargo. The Company has several prospects mapped on the Block and will commence the immediate evaluation of the top drilling candidates.

Madalena is a publicly traded international junior Canadian oil and gas exploration company trading on the Toronto Venture Stock Exchange under the symbol "MVN". The Company has assets in Canada, Tunisia and Argentina and is actively evaluating international oil and gas opportunities with a primary focus on South America and North Africa.

MADALENA VENTURES INC.

On behalf of the Board

Ken Broadhurst, President

Forward Looking Statements

Certain information set forth in this press release, including a discussion of future plans and operations, contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, environmental risks industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources, as well as risks inherent in operating in foreign jurisdictions, including varying judicial or administrative guidance on interpreting rules and regulations and a higher degree of discretion on the part of governmental authorities. Actual results, performance or achievement could differ materially from those expressed in or implied by these forward-looking statements.

Contact Information

  • Madalena Ventures Inc.
    Ken Broadhurst
    President
    (403) 233-8010
    (403) 233-8013 (FAX)