Mediterranean Oil & Gas Moves Ahead with Drilling Campaigns Offshore Malta

The Board of Mediterranean Oil & Gas Plc provids operational update for the 3 month period ended 31 December 2013.

Production:

MOG’s total net production for Q4 2013 was 4.24 MMscm (equivalent to 0.15 Bcf, or 26,980 boe). This represents average net production of 46,133 scm per day or 293 boe per day during Q4 2013 (Q3 2013 399 boe per day).

Production levels were down quarter-on-quarter as a result of Guendalina Field wells GUE 3ss and GUE 2ss remaining offline for the full quarter. The Guendalina Field achieved net gas production (MOG 20% W.I.) of 3.06 MMscm (equivalent to 0.11 Bcf or 19,463 boe). This represents average net production of 33,281 scm per day or 212 boe per day in Q4 2013.

Investigative work, undertaken by the operator, ENI, demonstrated that the reservoir remains in good condition in terms of pressure and absence of formation water, and issues with the production performance were likely due to the plugging of the well completion. On 24 December 2013, the operator initiated remedial operations to restore the production at GUE 3ss. These operations were hampered by difficult weather conditions in the Adriatic. The intervention was completed successfully on 11 January 2014 and the well returned to low-rate production. The operating condition of the well continues to improve as the well cleans up. A further update will be provided once production from GUE 3ss has stabilized. The Guendalina Field is currently producing approximately 36,000 scm (~229 boe) per day net to MOG.

In Q4 2013, the Company’s onshore Italy gas fields achieved net production of 1.18 MMscm (equivalent to 41.8 MMscf or 7,516 boe). This represents average net production to the Company of 12,852 scm per day or 82 boe per day in Q4 2013.

Revenues:

MOG’s total net revenue for Q4 2013 was €1.1 million (Q3 2013 €1.8 million), representing an average realised price of €0.253 per scm (Q3 2013 €0.295 per scm). The average realised price was lower in Q4 than Q3 due to the dual effects of entering the new thermal year contract with Repower Italia S.p.A. and changes to the Euro versus US Dollar exchange rate.

Total net revenue for 2013 was €8.2 million (2012 €16.3 million). Net revenue from the offshore Guendalina Field was €6.7 million and €1.5 million for the onshore Italy gas fields.

Offshore Malta – Area 3 Blocks 1, 2 and 3:

As part of the work programme aimed at exploring this frontier exploration area, where MOG’s subsidiary Melita Exploration Company Ltd has a 40% W.I. in partnership with Capricorn Malta Ltd (a subsidiary of Cairn Energy PLC) (60% WI, Operator), the joint venture has approved the acquisition of approximately 1,500km broadband 2D seismic in H1 2014 and the operator is finalising the preparation of the seismic campaign.

Dr. Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented:

“The fourth quarter of the year was a difficult period for the Company with the continued production challenges at Guendalina. We are pleased early indications suggest that sustained production can be resumed at GUE 3ss.

“We look forward to a very active first half of 2014 as we move ahead with our drilling campaigns offshore Malta and onshore Italy, as well as the acquisition of new seismic data offshore Malta Area 3.”

Press Release, January 27, 2014

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