The Board of Maha Energy has approved the 2022 Capital Plan detailed in the press release dated 30 December 2021. The 2022 Capital Plan aims to invest USD 47 million on various drilling and construction projects in Brazil, USA and Oman. The Capital Plan is to be funded through operating cash and proceeds from the 2021 financing. The Company estimates its Corporate operating costs for 2022 (including oil transportation costs) to range between $10 and $13 per BOE based on the annual average production range of 4,000 - 5,000 BOEPD.

Jonas Lindvall CEO of Maha said: 
“2022 is shaping up to be a transformational year for Maha. We look forward to starting drilling and well testing operations in Oman and at the same time, transitioning the Tie field in Brazil from the development drilling phase towards the final phases of the waterflood implementation.”

Maha Energy is providing production guidance of 4,000 - 5,000 BOEPD for 2022, compared to the estimated volume of 7,000 BOEPD presented in the 5 year operational strategy in early March 20211. The preliminary guidance accounts for the impact of the previously published delay and recent reconfiguration of Tie-4 production well from a horizontal well to a vertical well. 

Tie Field - Bahia, Brazil 2022 Capital Plan

Tie-5 Hz
Tie-5 will be drilled from the GTE-4 pad and completed in the Agua Grande formation. This is a completely re-designed horizontal production well with an electrical submersible pump.

Tie-6
Tie-6 is a dual-zone water injector drilled on the south pad targeting to sweep the southwestern part of the structure

Tie-7
Tie-7 is a dual-zone water injector drilled on the new northwest pad targeting to sweep the northwestern part of the structure.

Tie-3 Conversion
Tie-3 was designed and drilled as a hybrid oil producer, with subsequent conversion to water injection. This conversion will commence earlier than planned and will be carried out with a workover rig during Q1.

Tie Facilities
Capital for the facilities is focused on future well tie-ins, construction of the new northwestern pad and water handling facilities, including injection.

Tartaruga Field – Sergipe, Brazil 2022 Capital Plan

TTG-4 Hz
A horizontal production well targeting the Penedo 1 reservoir is now delayed and scheduled to spud towards the end of Q4, 2022 and brought onstream in 2023.

LAK Ranch –Wyoming USA 2022 Capital Plan

Production Optimization
The LAK Ranch heavy oil field was shut in at the beginning of the Pandemic in 2020.  No work is planned for 2022 other than regulatory requirements.

Illinois Basin–Illinois and Indiana, USA 2022 Capital Plan

Wells
Production will continue from the IB area during 2022. 2 gross/1.5 net wells are planned for the year, and these wells are considered to be commitment wells to keep all leases in good standing. Once final results are received from the 2021 drilling program during the first quarter of 2022, further evaluation will occur of the future IB wells.

Mafraq Oil Field, Oman 2022 Capital Plan

Farm-Down
A non-binding term sheet has been signed that contemplates a potential farm down of Block-70. This farm down is expected to close during Q1 2022 and all potential production from Block-70 assumes this farm down occurs.

Wells
With the ongoing placement of equipment purchase orders and rig contract negotiations, eight wells are currently planned for 2022. Two of these are appraisal wells, predominantly designed to acquire reservoir data and may not be placed on test production, and the balance are horizontal pilot wells testing Mafraq reservoir deliverability.  

Facilities
A temporary Extended Well Test (“EWT”) package will be procured and constructed to allow extended well test production to commence from the pilot wells.

Production
The Company expects to complete most of the Capital Plan prior to year-end 2022 with the exception of the TTG 4 production well which is planned to be drilled towards the end of Q4 2022/Q1 2023. The exact timing of the operations is dependent upon a number of factors that may be outside Maha’s control, including delivery of long lead items, rig availability, regulatory permitting and logistics which in turn might affect Company’s total annual production.

As such, this preliminary 2022 production guidance, is net to the Company and after Oman farm down (but before government or freehold royalties and/or government production share) and is expressed in the range of 4,000 – 5,000 BOEPD, of which approximately 8% is estimated to be gas.

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