Operations Update

Caracal Energy Operations Update and Capital Markets Event

CALGARY, Sept. 18, 2013 /CNW/ - Caracal Energy Inc. ("Caracal Energy" or the
"Company") announces an operational update summarizing current exploration and
development activities in Chad.

Krim-1 Exploration Well

·         Structural closure southwest of the Mangara field

·         Good porosity and good shows identified over 85 metres so far

·         Maximum natural flow rate of 2,580 barrels oil per day ("bopd")
recorded during testing. It is estimated that with an electric submersible pump
("ESP") in the well a stable production rate of 3,000 - 4,500 bopd is
achievable

Mangara Drilling Update

·         Successful testing of the Cretaceous E sands in the Mangara eastern
lobe

·         Maximum natural flow rate of 1,917 bopd recorded during testing. It
is estimated that with an ESP in the well a stable production rate of 1,500 -
2,500 bopd is achievable

·         Pre-drill un-risked Prospective Resource estimate of 25 MMbbls and 58
MMbbls on a Pmean and P10 basis, respectively by the Company's third party
reserves evaluator, McDaniel & Associates ("McDaniel")

·         Further E sands potential exists in the Mangara western lobe

Rig Contract Award

·         The Company is in the process of contracting an additional 4 to 6
drilling rigs and 2 to 4 service rigs

·         Rig arrival is scheduled to commence in Q1 2014

Seismic Program Tenders

·         Evaluation of tenders underway for a multi-year 2D and 3D seismic
programme across the Caracal acreage

Krim Exploration Drilling Update

The Company's first exploration well, Krim-1, has been drilled to 2,630 metres
and cased across the C and D sand horizons. Drilling results indicate
approximately 50 metres of good porosity intervals with good oil shows in the
Cretaceous C and D sands. Cased hole wireline logs across the Cretaceous C and
D sands are currently being processed and analysed.

An open hole drill stem test ("OHDST") has been completed over approximately 35
metres of gross E sands drilled to date achieving a maximum natural flow rate
of 2,580 bopd at a flowing wellhead pressure of 120 psi. The well flowed for a
total duration of 31 hours. Field sampling suggests oil gravity of 34 - 37
degrees API and a producing gas-oil ratio of approximately 100 standard cubic
feet per stock tank barrel ("scf/stb"). Based on surface pressure data, no
pressure or production decline was observed.

The productivity index for the zone is 2.6 - 3.2 bopd/psi. It is estimated that
with an ESP in the well a stable production rate of 3,000 - 4,500 bopd is
achievable. Further testing is planned on this section with potential for
further E sands to be encountered and tested as drilling continues to a total
depth ("TD") estimated to be 3,332 metres.

The Mangara field and Krim prospect were included in the 147 km2 3D seismic
program acquired by the Company in 2012. For the Krim structure, the
independent reserves and resources evaluation provided by McDaniel & Associates
Ltd. (the "McDaniel Report") as at June 30, 2013 (as previously announced)
booked for Krim unrisked Prospective Resources of 29 MMbbls and 64 MMbbls on an
Pmean and P10 basis, respectively, for the C, D and E sands.

 

Mangara Drilling Update

The Company conducted extensive testing of the Cretaceous E sands in the
Mangara-5 well since the publication of the McDaniel Report (which attributed
relatively low reserves to Mangara E sands and which was prepared prior to
drilling Mangara-5) This was the Company's first opportunity to comprehensively
test the Cretaceous E sand.

The first cased hole test was over the interval 2,950 - 3,095 metres (29.5
metres of net perforations). The well was swabbed for 30 hours and confirmed
100% formation water as suggested by petrophysical interpretations.

The second cased hole test was from 2,474 - 2,669 metres (75 metres of net
perforations). The initial 53 hours flow test resulted in a maximum natural
flow rate in excess of 1,900 bopd with a 1" choke and a flowing wellhead
pressure of 160 psi. Field estimates indicate crude quality of 35 - 39 degrees
API, and a producing gas-oil ratio of 100 scf/stb. No formation water was
observed for the duration of this test and based on surface pressure data, no
pressure or production decline was observed.

The productivity index for the zone is 1.4 - 1.9 bopd/psi. It is estimated that
with an ESP in the well, a stable production rate of 1,500 - 2,500 bopd is
achievable. Further testing is on-going that will reduce the range of
uncertainty on this well's potential.

For the E sands in the eastern lobe of the Mangara field, the McDaniel Report
estimated un-risked Prospective Resources of 25 MMbbls and 58 MMbbls on a Pmean
and P10 basis, respectively (based on a resource audit prior to drilling). In
addition, approximately 1.5 MMbbls of 2P reserves are booked in the McDaniel
Report for the eastern lobe of the field.

The Company anticipates testing the Cretaceous E sands in the western lobe of
the Mangara Field, with the Mangara-6 well results due later this year. For the
western lobe of the Mangara field, the McDaniel Report estimated (on a resource
audit prior to drilling results), un-risked Prospective Resources of 15 MMbbls
and 35 MMbbls on a Pmean and P10 basis, respectively. No reserves have been
assigned in the western lobe of the Mangara field.

Badila Drilling Update

Rig 96 continues to drill the Badila-4 well. Some delays were encountered due
to fishing operations to retrieve a stuck logging tool. The well has reached TD
and penetrated the Cretaceous C, D and E sands. Further wireline logging is
underway prior to running production casing and testing the well.

Rig 96 will move next to the Badila-5 well site, which is located immediately
adjacent to Badila-1 and Badila-2. This is expected to occur during October
2013.

The access road and well site for the Bitanda exploration well, adjacent to the
Badila field, are under construction. The Company anticipates spudding the
Bitanda well after Badila-5.

Gary Guidry, Chief Executive Officer of Caracal Energy, said:

"We are very excited by the results of the Mangara-5 E sands testing. This has
the potential to accelerate our development plans and production goals for
Mangara. We have now confirmed the presence of oil over a gross column of 195
metres. We are also excited about the preliminary results and oil flow tests to
date from our first exploration well at Krim."

Capital Markets Day

Caracal Energy is holding a Capital Markets Day for analysts and investors in
London, today. Gary Guidry, Chief Executive Officer, and Trevor Peters, Chief
Financial Officer will host the event, with presentations by a number of the
operational management team.

A live webcast of the capital markets day will be available starting at 2.30pm
(BST) on Wednesday 18th September 2013 for analysts and investors. To register:

Webcast:  http://mediazone.brighttalk.com/event/h2glenfern/
908075ea2c-7897-intro

International dial in: [phone], Password: Capital Markets Day

The presentation slides will be posted and available for viewing on the
Investors section of the Caracal Energy website (www.caracalenergy.com) on
Thursday 19th September.

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
entered into 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," "will", "should," "could," "project,"
'likely", "anticipate," "aim," "target," "expects," "seeks" and similar
expressions and words of similar meaning. These statements reflect the beliefs
and expectations of the Company and involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future.
Information relating to reserves and resources is deemed to be forward-looking
information, as it involves the implied assessment, based on certain estimates
and assumptions, that the reserves and resources described exist in the
quantities predicted or estimated, and can be profitably produced in the
future. No representation is made that any of these statements or forward
looking statements will come to pass or that any results will be achieved.
Specific forward-looking statements included in this press release include
comments related to the expected timing of drilling and facilities advancement;
potential production rates; expected completion of well servicing operations;
development of the fields described; expected results of the Krim prospect; and
other matters. Subject to applicable securities laws, the Company and its
directors, officers, employees or affiliates do not undertake any obligation to
revise this forward-looking information, to correct any inaccuracies which may
become apparent, to publicly announce the result of any updates or revisions to
the statements made, and any opinions expressed in them are subject to change
without notice. This cautionary statement expressly qualifies the
forward-looking information and statements contained in this press release.
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 604-694-6035
Joel Shaffer 416-649-8006

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