Petromanas provides operational update

Petromanas Energy Inc. (“Petromanas” or the “Company”) (TSXV: PMI) today announced the filing of its financial results for the second quarter of 2014 and provided an update on its activities in Blocks 2-3 onshore Albania. The Company holds a 25% working interest and is the operator with Shell holding the remaining 75% interest.

Molisht-1 Well

Petromanas has provided a phased appraisal plan to the Albanian Government for the Shpirag-2 discovery and entered the second exploration period under the Blocks 2-3 PSC on June 3, 2014. The second exploration period has a two-year term. The appraisal plan contemplates drilling additional wells, planning additional seismic, continued fracture studies and the scoping of extended testing facilities.

This plan includes the Molisht-1 well which is currently drilling, followed by the Shpirag-3 well located approximately three kilometres south of Shpirag-2. Long lead items have been ordered for Shpirag-3 and the lease and access road construction that commenced in June is substantially complete. Conductor pipe has been set at the drill site.

In June, the Company announced that the Molisht-1 well had penetrated approximately 250 metres of Eocene carbonate section, before encountering a lower flysch shale zone. Hydrocarbons were present in the drill cuttings from the Eocene zone. The Company logged the upper carbonate zone and cased the well to a depth of 4,175 metres. Based on encouraging logging while drilling results in the upper Eocene carbonate, the Company elected to run intermediate wireline logs. The bore-hole image analysis revealed sections within the Eocene containing natural fractures. The prospective carbonate reservoirs in Albania are the Eocene, Paleocene and Cretaceous with the Cretaceous being the primary target.

Subsequently, drilling ahead from 4,650 metres, the Company encountered challenges in drilling the lower flysch zone due to poor hole stability caused by the extensive fracturing. The drill bit became stuck on two occasions which required sidetracks to be drilled and has extended the timeframe for drilling operations. Management is encouraged that the oil shows and fractures observed in the Eocene are indicative of the conditions that will be encountered in the Cretaceous age target reservoir. The well is currently drilling ahead in the lower flysch zone at a depth of approximately 4,500 metres. The Company expects to drill the well up to a total depth of approximately 5,800 metres with the anticipation that drilling will be completed in the fourth quarter.

“Our immediate focus remains on getting the Molisht-1 well drilled to total depth and assessing the area to the south of the discovery at Shpirag-2,” said Glenn McNamara, CEO of Petromanas. “Growing our understanding of the broader field potential of Blocks 2-3 is predicated on drilling multiple wells. We are focused on drilling an optimal wellbore into the Cretaceous so we can test the productivity of this part of the reservoir and gain further information on the potential size of the resource.”

Blocks 2-3

Interpretation of the seismic data that was shot in 2013 continued during the second quarter. The interpretation of this data has provided valuable information used for the development of the final plan for the orientation of the Molisht-1 wellbore and the determination of bottom-hole locations for future wells in the exploration and appraisal program. Having completed the technical analysis, the Company has engaged Calgary-based GLJ Petroleum Consultants Ltd. (“GLJ”) to provide an updated resource assessment of the Company’s prospects on Blocks 2-3. Results of this assessment are expected to be finalized in the fourth quarter of 2014.

Blocks D-E

On May 15, 2014 the Albanian National Agency of Natural Resources refused the Company’s request to enter into the third exploration period for Blocks D-E with a reduced financial commitment. While the Company had until August 11, 2014 to provide a bank guarantee for $6.3 million in order to enter into Phase 3, it has decided not to provide this level of guarantee and expects the Albanian government to terminate the licence. As a result, the Company previously recorded an impairment expense of its carrying value of Blocks D-E which was approximately $23 million. The Company considered Blocks D-E to be of higher risk than Blocks 2-3 and relatively costly to explore based on the lower prospective resource volumes allocated to the Papri prospect which led to the election to relinquish Blocks D-E.

Filing of Q2 2014 Financial Results

The Company has filed its financial statements and related Management’s Discussion and Analysis (“MD&A”) for the three and six month periods ended June 30, 2014 on SEDAR. The financial statements and MD&A will be available on the Company’s website or at www.SEDAR.com

energjia.al 25.08.2014