Development and Exploration Update

Caracal Energy Provides Development and Exploration Update

/NOT FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, July 16, 2013 /CNW/ - Caracal Energy Inc. ("Caracal" or the "Company")
an international exploration and development company focused on oil and gas
exploration, development and production activities in the Republic of Chad,
Africa ("Chad"), today provided an operational update summarizing its current
development and exploration activities in Chad.

Highlights

·         The Badila production facilities have been commissioned and an
inauguration ceremony was held by President Idriss Deby on June 9, 2013.  The
interconnection (hot-tap) with the TOTCO-COTCO export line has been completed,
and the transportation agreement is being finalized.  The Company anticipates
approval to start producing the Badila field this month.

·         A second drilling rig has arrived on location in southern Chad and is
expected to spud the Badila-4 development well by the end of July 2013.

·         The Badila-3 well was drilled to a total depth of 2,150 meters and
cased as a Cretaceous C and D sands producer.  Test results indicated that the
well is capable of producing ~2,400 bopd and will be brought onstream once
facilities are completed to handle the associated water.

·         The 320 km2 3D seismic survey covering the Badila field and the
adjoining Bitanda Ridge exploration prospect was completed on schedule and on
budget.

·         The Mangara-4 development well spudded on March 13, 2013, and drilled
to a total depth of 2,471 meters.  Petrophysical results show 40-60 meters of
estimated oil pay in the lower Cretaceous C & D sands.  The well was suspended
due to hole instability, with plans to re-enter in the near future and complete
as a producer.

·         The Mangara-5 well was drilled and cased as a lower Cretaceous C & D
sands producer.  The well was also deepened to 3,339 meters to test the lower
Cretaceous E sands, a new exploration horizon below the main Mangara field. 
Petrophysical results show a potential range of 150-230 meters of estimated net
oil pay in the lower Cretaceous E sands.  Testing of the E sands has commenced
and the first 25 meter interval produced a maximum rate of 815 bopd of 39
degree API with no water.  Cumulative oil recovery from this test was 200 bbl
over a total 16-½ hour flow period.

·         An application for the 25 year development license was filed for the
Kibea field on April 25, 2013.

·         With the arrival of the second drilling rig, the Company is now able
to initiate exploration drilling. A Krim exploration well is expected to spud
in August 2013 and a Bitanda exploration well in September 2013.

Badila Exploration

The Company completed its 3D seismic program covering 320 km2 of the Badila
field, as well as the adjoining Bitanda ridge, where multiple exploration
prospects had been identified on 2D seismic.

The 3D seismic confirmed closure of the Bitanda structure against a basin
bounding fault, moving the priority of this exploration prospect near the top
of the Company's drilling sequence.  This prospect has been quantified in the
recent mid-year reserves and resources update.

Badila Development

Caracal has full 3D coverage of the Badila field, and the results of the
initial processing of the 3D seismic are incorporated in the mid-year reserves
update.  The results suggest extension of the Cretaceous D sands to the east of
the previously understood field limits, and this extension will be confirmed by
further drilling commencing with the Badila-4 well.

Badila-3

Badila-3 was drilled to test the flank of the field structure at the Cretaceous
C and D levels.  Drilling and petrophysical analysis suggested the Cretaceous D
sands may contain additional moveable oil, so three additional well tests were
added. Results have been encouraging, and suggest economic reserves may be
produced from the C1a, C3, D6 and D8 zones as follows:

ZONE   COMMINGLED TESTING INDIVIDUAL TESTING POTENTIAL RATE WITH ESP
                                                                    
       Fluid Rate Oil Cut Fluid Rate Oil Cut Fluid Rate   Oil Rate  
                                                                    
       (BBL/day)  %       (BBL/day)  %       (BBL/day)    (BBL/day) 
                                                                    
C1a    1,734      6%      697        11%     311          99        
                                                                    
C3                        1,438      5%      4,446        218       
                                                                    
D4, D5                    1,492      0%      7,500        0         
                                                                    
D6                        1,655      36%     6,834        2,434     
                                                                    
D8                        854        22%     2,641        585       
                                                                    

Notes: Productivity Index was estimated from swab tests, and used to estimate
ESP (Electric Submersible Pump) rates at an intake pressure of 1,350 psi (~35%
drawdown)

The oil gravity of the D6 and D8 zones is ~36 degrees API. With only the D6 and
D8 zones completed with an electric submersible pump, the well is capable of
~2,400 barrels of oil per day commingled from these two zones.  However, since
this oil comes with ~5,100 barrels of water per day, these zones will be
produced when additional processing and water injection facilities are
available.

Mangara Development and Exploration

Mangara-4

The Mangara-4 development well spudded on March 13, 2013 and was drilled to a
total depth of 2,471 meters.  Petrophysical results show 40-60 meters of
estimated oil pay in the lower Cretaceous C & D sands.  The well was suspended
due to hole instability, and will be re-entered in the near future and
completed as a producer.  Depending on the testing results of Mangara-5,
Mangara-4 may be deepened and completed as a dedicated lower Cretaceous E sands
producer.

Mangara-5

The Mangara-5 development well was drilled and cased as a lower Cretaceous C &
D sands producer.  The well was also deepened to 3,339 meters to test the
Cretaceous E sands, a new exploration horizon below the Mangara field. Previous
operators drilled three penetrations (to varying depths) of the lower
Cretaceous E sands. The E Sands had good hydrocarbon shows across a gross
interval of 750 meters with a potential gross section of 900+ meters based on
seismic estimates. In addition, a drillstem test by previous operators across a
9 meter interval at the top of the E sands showed moveable hydrocarbons with an
undamaged calculated flow capacity of 220 bopd, and API gravity of 38.9°.

The recent 3D seismic over Mangara, along with specialized processing and
interpretation techniques, suggests continuity of sands within the lower
Cretaceous E could provide significant hydrocarbon storage volumes. From
drilling and petrophysical analysis, preliminary Mangara-5 results suggest this
well has a potential range of 150-230 meters of estimated net oil pay in the
Cretaceous E sands. The first of a series of planned tests was across a 25
meter interval and achieved a maximum oil rate during this period of 815 bopd.
The interval produced a total of 200 barrels of 39 degree API oil with no water
over the 16-½ hour test period.

Kibea Development

Caracal filed an Exclusive Exploitation Authorization ("EXA") application on
April 25, 2013 and was deemed conditionally approved on May 25, 2013 pending
submission of an Environmental Impact Assessment ("EIA"). The EIA is underway,
and potential pipeline routes are being surveyed. A 3D seismic survey over the
Kibea field and nearby exploration prospects is scheduled to commence in the
4th Quarter of 2013 or 1st Quarter of 2014. In addition, an appraisal well on
the Kibea field is scheduled to spud in the 4th Quarter of 2013 to test deeper
horizons and obtain core and fluid samples for development planning and
facilities design.

Badila Production

The first phase of the modular Badila production facilities was completed on
schedule at the end of May and has been commissioned for production.  President
Idriss Déby inaugurated the Badila facilities on June 9, 2013 by opening the
production shipping valve.  The system has been loaded with oil and prepared to
commence production during July, once the transportation agreement has been
finalized and signed.

Exploration Drilling

In addition to the results in the lower Cretaceous E sands at Mangara-5, the
arrival of a second drilling rig will allow the exploration program to
commence.  The Company anticipates spudding a Krim exploration well in August
2013, after which the drilling rig will move to the Chari East Doseo block for
further exploration.  One of Caracal's most high potential exploration
prospects, Bitanda in the DOI block, is expected to spud in September 2013.

Gary Guidry, Chief Executive Officer of Caracal Energy said:

"In 2013 we sucessfully drilled and tested two development wells in the Badila
field and we are currently testing a second well drilled in the Mangara field.
The 3D seismic surveys at Badila and Mangara have provided encouraging
information, suggesting further extensions of the fields, and validating nearby
exploration potential.

We are ready to commence production at Badila, and anticipate the final
authorization this month. Our combined capacity from the first three Badila
wells will provide production capacity to deliver at a combined 14,000 bopd to
keep our Phase one production facilities loaded and production volumes in line
with management expectations. We expect the Mangara field to add further
production by the end of the year."

About Caracal Energy Inc .

Based in Canada, Caracal Energy Inc. is an international exploration and
development company focused on oil and gas exploration, development and
production activities in the Republic of Chad, Africa.  In 2011, the Company
acquired three production sharing contracts ("PSCs") from the government of the
Republic of Chad.  These PSCs provide exclusive rights to explore and develop
reserves and resources over a combined area of 26,103 km2 in southern Chad. 
The PSCs cover two world-class oil basins with development opportunity, oil
discoveries, and numerous exploration prospects.

Cautionary Statement

Certain information in this press release constitutes forward-looking
statements under applicable securities law. Any statements that are contained
in this press release that are not statements of historical fact may be deemed
to be forward-looking statements. Forward-looking statements are often
identified by terms such as "may," "should," "anticipate," "expects," "seeks"
and similar expressions. Specific forward-looking statements included in this
press release include comments related to the expected timing of pipeline
completion and facilities advancement; potential production rates; expected
completion of well servicing operations; development of the Mangara and Badila
field; expected completion of the 3D seismic shoot; and other matters. Subject
to applicable securities laws, the Company does not undertake any obligation to
revise this forward-looking information or these forward-looking statements to
reflect subsequent events or circumstances. The forward-looking information and
statements contained in this press release are expressly qualified by this
cautionary statement.  Well-test results are not necessarily indicative of
long-term performance or of ultimate recovery.

 

SOURCE: Caracal Energy Inc.

For further information:

Caracal Energy Inc.
Gary Guidry, President and Chief Executive Officer
Trevor Peters, Chief Financial Officer
403-724-7200

Longview Communications -  Canadian Media Enquiries
Alan Bayless
Joel Shaffer
604-694-6035
416-649-8006

FTI Consulting - UK Media Enquiries
Ben Brewerton / Ed Westropp
+ 44 (0) 207 8313 3113
[e-mail]