Caracal Energy Inc. provides an operational update on its activities in Chad and 2014 guidance.
◾ Production has increased to approximately 12,000 gross barrels oil per day ("bopd");
◾ On track to achieve first oil lifting in Q1 2014;
◾ Commissioned the Southern Processing Terminal ("SPT");
◾ Continued construction of the Mangara Central Processing Facility (the "CPF"), 12 inch oil pipeline and 6 inch gas pipeline, all of which are expected to be completed in Q1 2014;
◾ Ordered long lead facilities for the Badila expansion;
◾ Placed Badila-4 and Badila-5 on production at maximum producing rates of approximately 1,000 and 5,000 bopd respectively;
◾ Mangara-6 development well was spud on November 19, 2013 and drilled to a depth of 3,109 meters ("m"). Petrophysical evaluation in the Lower Cretaceous C sands ("C sands") proved the zone to be oil bearing. A Drill Stem Test ("DST") over the Lower Cretaceous E sands ("E sands") successfully flowed oil to surface. The Company cored 18m of E sand, which showed clear signs of oil pay. The Company believes that the E sands could have a positive impact on reserves;
◾ Production flow tests conducted over the Krim-1 C sands measured rates as high as 1,470 bopd and the D sands flow tested at up to 702 bopd. No reserves were assigned to these C and D sands in the report by McDaniel & Associates Consultants Ltd., an independent qualified reserves evaluator, ("McDaniel")1;
◾ Drilled and cased the Bitanda-1 exploration well, which was spud on December 5, 2013, and was rig released onDecember 31, 2013. Based on petrophysical interpretation, there is a potential of 38 m of net reservoir interval in the Upper Cretaceous M sands and 66 m in the D sands, which will be subsequently tested;
◾ Commenced the 2014 2D and 3D seismic acquisition program;
◾ Finalized rig contracts and received definitive rig schedule from the rig contractor for an additional four drilling rigs and two completion rigs, bringing the total to six drilling rigs and three completion rigs;
◾ 2014 guidance of $475 -$525 million net capital expenditures ($375 -$425 million net of the remaining $100 millionGlencoreXstrata plc carry), 22,000 - 26,000 bopd annual average gross production (11,000 - 13,000 bopd working interest production) and funds flow from operations of $220 - $270 million.