MENA Hydrocarbons Inc.

MENA Hydrocarbons Inc.

July 22, 2011 08:56 ET

MENA Hydrocarbons Inc. Announces Spud of the Itheria-1 Exploration Well in Block 9, Syria

CALGARY, ALBERTA--(Marketwire - July 22, 2011) - MENA Hydrocarbons Inc. ("MENA" or the "Company") (TSX VENUTRE:MNH) is pleased to announce the commencement of drilling operations in Syria with the spud of Itheria-1, the first exploration well on Block 9, Syria.

The planned total depth of the well is 3,256 metres and it is expected to take 80 days to drill, on a dry hole basis. The Itheria-1 well will test a large structure with four-way dip closure defined by 3D seismic. Primary targets are sandstones of Ordivician age.

Graham Lyon, President and Chief Executive Officer of MENA said: "The Itheria prospect, the first of two 2011 exploration wells to assess the prospectivity of Block 9, provides MENA with a high impact exploration opportunity which is one further step in the MENA strategy of delivering a portfolio of development, production and high impact exploration."

Pursuant to a farmout agreement, MENA Hydrocarbons (Syria) Ltd., an indirect wholly-owned subsidiary of MENA will fund 60% of the costs for the drilling of Itheria-1 with Triton Petroleum Pte Ltd. and Loon Latakia Ltd. (an indirect wholly-owned subsidiary of Kulczyk Oil Ventures Inc.) each paying 20% of the remaining costs. The well is being operated by Loon Latakia Limited.

About Syria, Block 9

MENA owns a 30% participating interest in a Syrian concession for the exclusive right to explore the onshore exploration block in north western Syria known as "Block 9". The concession is for an initial exploration period of 4 years, which term may be extended for up to 5 years subject to the satisfaction of certain conditions. Block 9 is located on the north western flank of the hydrocarbon producing Palmyrides Basin. The block, which comprises 10,032 square kilometres (2,478,876 acres), is prospective for crude oil, natural gas and condensate. Major gas and oil pipelines lie in close proximity to the initial exploration focus area in the southeast part of Block 9.

RPS Energy Canada Ltd. ("RPS") prepared a report dated March 21, 2011 estimating, as at December 31, 2010, the oil and gas prospective resources of two prospect locations (Itheria and Bashaer) in Block 9 in Syria (the "Block 9 Resource Report"). The Block 9 Resource Report was prepared in accordance with the COGE Handbook, and the definitions contained in NI 51 101 and the COGE Handbook, for the Syria Block 9 consortium consisting of Loon Latakia Ltd. (Kulczyk Oil Ventures), MENA and Triton Petroleum Pte Ltd.

The tables below summarize RPS' "high", "best" and "low" estimates for prospective oil and solution gas resources of the Itheria and Bashaer prospect locations in Block 9 in Syria:

Prospective Resources Summary
100% field basis, unrisked
Prospect Resources Category Low Estimate Best Estimate High Estimate Mean
Itheria(1) Oil (MMbbls) 80 300 677 350
Gas (Bscf) 57 225 530 268
Bashaer(1) Oil (MMbbls) 50 94 165 102
Gas (Bscf) 25 47 82 51
Prospective Resources Summary
MENA 30% working interest basis, unrisked
Prospect Resources Category Low Estimate Best Estimate High Estimate Mean
Itheria(1) Oil (MMbbls) 24 90 203 105
Gas (Bscf) 17 68 159 81
Bashaer(1) Oil (MMbbls) 15 28 49 31
Gas (Bscf) 7.5 14 25 15
  1. "GPoS" or "Geological Probability of Success" is estimated by RPS to be 19% for the Itheria prospect and 14% for the Bashaer prospect. This concept refers to the technical chance of success of a geological model as it applies to the entire volumetric expectation curve between P0 and P100. No commercial cut-off is applied and the geological chance should not be taken as necessarily equivalent to the commercial success chance. Geological chances calculated by multiplying play chance (source, reservoir and seal) and prospect specific chance (trap and timing, seal, charge and reservoir).

The petroleum resources set out above are classified as "prospective resources". Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

About MENA Hydrocarbons

MENA Hydrocarbons is an international oil and gas company focused on growing an asset base of production, development and high impact exploration in the Middle East and North Africa region. In Egypt, MENA owns and operates the development lease for the Lagia oil field, a 32 square kilometer onshore block located on the Sinai Peninsula, directly adjacent to the Gulf of Suez. In Syria, MENA owns a 30% participating interest in Block 9 in Syria, a 10,032 square kilometer onshore block prospective for crude oil, natural gas and condensate. MENA's shares currently trade on the TSX Venture Exchange under the symbol "MNH".

Forward looking information

This news release contains forward-looking information relating to the drilling of the Itheria-1 well, resource estimates and other statements that are not historical facts. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results or events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on this forward-looking information.

Forward-looking information is based on certain factors and assumptions regarding, among other things, the impact of increasing competition; the general stability of the economic and political environments in which the Company operates or owns interests; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with instability of the economic and political environments in which the Company operates or owns interests, oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, the inability to settle the definitive terms of the farmout arrangements, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.

The estimates of resources in this news release constitute forward-looking information which are subject to certain risks and uncertainties, including those associated with the drilling and completion of future wells, limited available geological data and uncertainties regarding the actual production characteristics of, and recovery efficiencies associated with, the reservoirs, all of which are being assumed. As estimates, there is no guarantee that the estimated resources will be recovered or produced. Actual resources may be greater than or less than the estimates provided in this presentation. Information concerning the independent evaluation from which these estimates are derived may be accessed under the Company's profile on SEDAR at

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • MENA Hydrocarbons Inc.
    Graham Lyon
    President & Chief Executive Officer

    MENA Hydrocarbons Inc.
    Jason Bednar
    Vice President & Chief Financial Officer

    MENA Hydrocarbons Inc.
    1000, 205 - 5th Avenue S.W.
    Calgary, AB
    T2P 2V7
    +1.403.930.7599 (FAX)