Maha Energy AB: Announces 2018 Capital Plan and Future Production Guidance

Maha Energy AB: Announces 2018 Capital Plan and Future Production Guidance

Maha Energy AB (publ)

Biblioteksgatan 1

SE-111 46 Stockholm

www.mahaenergy.ca

Press release

Stockholm

February 22, 2018

Maha Energy AB (publ) ('Maha' or the 'Company') Announces 2018 Capital Plan and future Production Guidance

Maha Energy AB (publ) ('Maha' or the 'Company') has today released details of the proposed 2018 capital plan ('Capital Plan') and expected minimum future production levels for its operations in Brazil and the USA.

During 2017 the Company completed a number of financings, issued a bond and completed acquisitions of two significant producing oil and gas properties in Brazil. As outlined in its April 2017 - Five Year Capital Plan Press Release, 2018 was meant to be and will be a year of organic growth. Below is an outline of the Company's 2018 Capital Plan to achieve this growth.

Jonas Lindvall, President and Chief Executive Officer of Maha Energy, commented: 'The benefits of merging the closely situated Tartaruga and Tie business units is bearing fruit. Our new streamlined Brazil organization is commencing a vigorous 2018 capital plan. I predict 2018 will be a year of healthy growth for the Company.'

LAK Ranch -Wyoming USA

(a) Reservoir Analysis

Laboratory studies and reservoir analysis completed in 2017 on LAK have confirmed that pressure support is the dominating requirement for mobilizing the 19° API oil from the LAK reservoir. This concept is further supported by the two recent successful field trials, (one of which is still ongoing), where commercial quantities of oil have been mobilized and produced.

(b) First Expansion Phase

With strengthening oil prices and the positive reservoir analysis (above), the Company is planning a 2018 first expansion phase of the hot water flood commenced in 2016. This program expansion phase entails drilling two more horizontal producing wells and six vertical injector wells. Two of the planned injector wells will be placed up dip of an existing horizontal producer that requires pressure support. Completion of the drilling program is scheduled for Q3 2018. Upon completion, LAK will have a total of 5 horizontal producing wells and 9 injectors. The Drilling Program is subject to various routine drilling approvals by Landowners and Wyoming Authorities.

Tartaruga - Sergipe, Brazil

(a) Re-entry and Workover of 7TTG

One of the existing producing wells (7TTG) will be re-entered during the first half of the year to recomplete the production string with a larger diameter tubing to optimize production. Technical analysis suggests current production is constrained due to the undersized tubing currently in place. During the same workover, the Company plans to perforate two previously untested intervals in the well. One of these intervals may be stimulated to increase production volumes. Upon completion of the workover, the 7TTG well should be producing from 3 intervals instead of the current 1. The workover is expected to take 3 weeks to complete.

(b) Sidetrack of 107D

After the recompletion of 7TTG, a drilling rig will be brought in to sidetrack the other producing well at Tartaruga (Well 107D). The current completion will be recovered, and the well sidetracked. The sidetrack will be drilled directionally and end with a 500 m long horizontal drainhole in the Pendeo sandstone. This operations is expected to start immediately after the 7TTG workover and should take 45 days. A new hydraulic pump has been ordered from the United States and is expected in Brazil in April. This will be installed upon completion of the 7TTG sidetrack.

The Tartaruga field will be shut in during the 7TTG workover and the 107D drilling for safety reasons.

(c) Facility Upgrade

Production test results of the Sidetrack and Workover will dictate upgrade requirements for the production handling facilities at Tartaruga. Current capacity of this production facility is limited, because of gas offtake constraints, to about 500 BOPD. Maha is presently securing gas offtake agreements to handle the associated gas from the anticipated increase in production. Additional work on the facility will include upsizing existing oil and gas handling equipment such as treaters and separators. Facility work is expected to be completed during the second half of 2018.

Tie Field - Bahia, Brazil

(a) New Hydraulic Jet Pumps

Two new hydraulic jet pumps were ordered at the end of 2017. The pump equipment is expected to be shipped from the United States at the middle of April. Installation and commissioning is scheduled for the end of Q2 (subject to shipping and customs clearance). The first pump will be installed on the GTE3 well, currently shut in, and will add oil production from both the Agua Grande and Sergei zones. The second pump will be installed on the currently producing GTE4 well. The theoretical pump capacity is over 2,000 barrels of liquids per pump

(b.1) Attic Well

A vertical production well (the Attic Well) is planned to be drilled on the crest of the Tie structure. The structure is a 3-way fault bounded structure that extends across multiple reservoirs. Both the Agua Grande and the Sergei reservoirs are known to be oil bearing and the structurally high well location is expected to access previously unproduced oil and gas from both reservoirs. Both zones are expected to be free flowing and will not initially require artificial lift

(b.2) Attic Well Exploration Target

A deeper reservoir, and of similar size as the Sergei reservoir, the Boipeba has been mapped on 3D seismic and is located +/-250 m below the oil producing Sergei reservoir. The Boipeba reservoir has not been penetrated on the Tie structure and hence forms a near field exploration target to the Company. The Attic Well will be drilled in such a way so that the Boipeba can be drilled, and if applicable, tested - but at the same time safely accessing the already known oil producing Agua Grande and Sergei reservoirs.

The Attic well is scheduled to be drilled right after the 107D horizontal sidetrack, and is expected to be a free flowing oil well.

(c) Facility Upgrade

The current production facility at the Tie field is sized to handle approximately 2500 BOPD and associated gas. With the installation of the jet pumps and the drilling of the Attic Well, the handling capacity of the facilities must be increased. Plans are underway to increase facility capacity to approximately 5000 BOPD and the associated gas.

(d) Waterflood

In order to support the Tie field water flood project that commenced in October, 2017, another water supply well will be drilled during 2018.

Production

The Company expects to complete most if not all of the Capital Plan prior to year end 2018. The exact timing of the operations is dependent upon a number of factors including delivery of long lead items, rig availability, permitting and logistics. Depending on the results of the operations, the Company will need to find new markets and offtake arrangements for production increases. As a minimum the Company expects to achieve, those production levels reflected in its April 2017 Five Year Capital Plan: an average annual net production of 2,040 BOPD for 2018, 3,990 BOPD for 2019 and 4,820 BOPD for 2020.

As the exact timing of operations and expected production/offtakes becomes clearer the Company will provide updated information by Press Release.

Funding of Capital Plan

The 2018 Capital Plan has budget of USD 23 million for the above projects and will be funded fully through operating cash flow and existing Company cash.

As a final comment, Jonas Lindvall said: 'As you can see, 2018 is shaping up to be a very busy year for the Maha team. The Boipeba exploration target is an exciting play and an excellent example of our core exploration philosophy - explore in close proximity to existing proven hydrocarbon accumulations. Having allocated the necessary capital and resources to these projects; I am confident we will deliver healthy results during 2018.'

Adviser

FNCA Sweden AB is the Company's Certified Adviser.

For more information, please contact:

Jonas Lindvall (CEO)

Tel: +1 403 454 7560

Email: [email protected]

or

Ron Panchuk (CCO)

Tel: +1 403 454 7560

Email: [email protected]

Miscellaneous

This information is published in accordance with the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above on February 22, 2018, at 7:00 am CET.

Maha in Brief

Maha Energy AB is a Swedish public limited liability company. FNCA Sweden AB has been engaged as Certified Adviser. The Company's auditors are Deloitte. The Company's predecessor Maha Energy Inc. was founded in 2013 in Calgary, Canada, by Jonas Lindvall and Ron Panchuk. In May 2016, the new group was formed with Maha Energy AB as parent company for purposes completing an initial public offering on the Nasdaq First North Sweden stock exchange. Jonas Lindvall, CEO and Managing Director, has 26 years of international experience in the oil and gas industry, starting his career with Lundin Oil during the early days of E&P growth. After 6 years at Shell and Talisman, Jonas joined, and helped secure the success of, Tethys Oil AB. Maha's strategy is to target and develop underperforming hydrocarbon assets on global basis. The Company operates three oil fields, Tartaruga and Tie in Brazil and LAK Ranch, in Wyoming, U.S. For more information, please visit our website www.mahaenergy.ca.

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