Mediterranean Oil & Gas: 1Q revenue in line with expectations

The Board of Mediterranean Oil & Gas Plc announces the following operational update for the three months ended 31 March 2014.

MOG’s total net production for Q1 2014 was 4.23 MMscm (equivalent to 0.15 Bcf, or 26,875 boe). This represents average net production of 46,975 scm per day or 299 boe per day during the period (Q1 2013: 700 boe per day).

The Guendalina Field achieved net gas production (MOG 20% W.I.) of 3.19 MMscm (equivalent to 0.11 Bcf or 20,298 boe). This represents average net production of 35,479 scm per day or 226 boe per day in Q1 2014. The operating conditions of the well GUE 3ss have stabilized post the well intervention conducted in January 2014. The operator is reviewing the production data to identify the optimal operating parameters going forwards. The Guendalina Field is currently producing approximately 35,500 scm (~225 boe) per day net to MOG.

The Company’s onshore Italy gas fields achieved net production of 1.04 MMscm (equivalent to 35.3 MMscf or 6,577 boe) during the period. This represents average net production to the Company of 11,496 scm per day or 73 boe per day. In February 2014 a coiled tubing operation was undertaken on the Vigna Nocelli 1 well in an attempt to restore production. The operation failed due to mechanical obstructions in the well. Alternative strategies to restore production from this field are currently being developed with the Joint Venture partners.

MOG’s total net revenue for Q1 2014 was €1.05 million, representing an average realised price of €0.249 per scm, which was in line with management expectations.

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

On 10 April 2014 Dolphin Geophysical completed the acquisition of 1,715 km of broadband 2D seismic, on time and under budget, 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 100 percent owned subsidiary of Cairn Energy PLC) (60% WI, Operator).

These data will now undergo seismic processing and are expected to be available to the Joint Venture partnership for interpretation in Q3 2014.

Offshore Malta – Area 4 Blocks 4, 5, 6 & 7

MOG has been informed by the operator, Phoenicia Energy Company Ltd, that the Noble Paul Romano rig being used to drill the Hagar Qim well to the south of Malta (Block 7 of Area 4) is currently undergoing the final inspection and certification tests in Valletta Harbour. MOG understands this work is forecast to be completed in time for the rig to mobilise to the Hagar Qim well location and to commence drilling in May.

Ombrina Mare:

The Company announced on 17 April 2014 that, following the tribunal hearing held on 9 January 2014 in Rome, the Lazio Regional Administrative Court rejected the appeal filed by Medoilgas Italia S.p.A (“Medoilgas”), a wholly owned subsidiary of MOG.

This appeal was aimed at obtaining an annulment of the letter sent by the Ministry of the Environment and of Protection of Land and Sea (“MEPLS”) on 9 July 2013 instructing Medoilgas to complete an ‘Autorizzazione Integrata Ambientale’ (an Integrated Environmental Authorisation) (“AIA”) for the Ombrina Mare project as a precursor to MEPLS considering the approval of the Environmental Impact Assessment (“EIA”) decree.

The Company has completed the activities necessary to finalise the AIA documentation, which will be submitted to MEPLS shortly. The Company will provide all necessary technical input requested by MEPLS to expedite the approval of the AIA and the EIA, so that the Company can move forward with the award of the Production Concession.

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

“In the first quarter of the year the Company began to reverse the production challenges encountered at Guendalina in 2013. We are pleased that sustained production has been achieved at GUE 33ss and we are working with the Operator to maximise the value of the asset.

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

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Press Release, April 23, 2014