Madalena Energy Inc. ("Madalena" or the "Company") (TSXV: MVN and OTCQX: MDLNF) is pleased to provide its operating and financial results for the three months ended March 31, 2017. Selected information is outlined below and should be read in conjunction with Madalena's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2017 and the associated management's discussion and analysis, which are available for review under the Company's profile at www.sedar.com and on the Company's website at www.madalenaenergy.com.
Madalena has successfully completed the strategic alternatives process which it initiated in June 2016. On May 8, 2017, Madalena entered into a series of agreements with Hispania Petroleum S.A., ("Hispania") a private, family-owned Spanish energy company which has operated in multiple countries, including Argentina, for three generations. The agreements provide for a package of debt and mezzanine financing which, once completed, are expected to alleviate Madalena's liquidity challenges (the "Working Capital Loan") and provide the Company access to growth capital for drilling and investment activities (the "Capex Loan"). These agreements are subject to certain regulatory and shareholder approvals. The Company expects to hold its annual and special meeting of shareholders in July 2017 to, among other things, approve the Capex Loan.
Jose David Penafiel, Hispania's CEO, was appointed CEO of Madalena effective May 8, 2017 and he and Alejandro Augusto Penafiel have joined Madalena's Board of Directors. Effective May 31, 2017, Alejandro Penafiel will assume the Interim CFO role as the Company conducts a search for a permanent CFO.
In order for new management to successfully transition and streamline operations, the companies have entered into a services agreement (the "Services Agreement") whereby Hispania's personnel, in Argentina and elsewhere, will be made available to Madalena.
As a result of transferring the executive management functions to Argentina, the Interim President and Chief Executive Officer and the Vice President, Exploration and New Ventures departed the Company on May 8, 2017 and the Vice President, Finance and Chief Financial Officer will depart on May 31, 2017.
Recent Highlights in 2017
As at March 31, 2017, the Company reported net income from continuing operations of $0.3 million, had working capital of approximately $5.2 million and significant future capital commitments to develop its properties. It is anticipated that currently available resources in addition to forecasted cash flow from operating activities will not be sufficient to resolve the anticipated capital commitments through 2017 and 2018.
As a result, for the three months ended March 31, 2017, the Company continues to include a note of going concern uncertainty in the condensed interim consolidated financial statements.
About Madalena Energy
Madalena is an independent, Canadian headquartered, Argentine focused upstream oil and gas company with operations in four provinces of Argentina where it is primarily focused on the delineation of unconventional oil and gas resources. The Company is implementing horizontal drilling and completions technology to develop both its conventional and resource plays.
Madalena trades on the TSX Venture Exchange under the symbol MVN and on the OTCQX under the symbol MDLNF.
SOURCE: Madalena Energy Inc.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.