26 June 2017

Mayan Energy Ltd / Index: AIM / Epic: MYN/ ISIN: VGG6622A1057 / Sector: Oil & Gas

Mayan Energy Ltd ("Mayan" or "the Company")

Restructure of Oklahoma Operations

Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company, is pleased to announce that it has restructured and rationalised its operations in Osage County, Oklahoma.   Following sale of the OKE Assets (RNS dated 13 March 2017), Mayan still held interests in three projects in Osage County, Oklahoma:  the Horizon leases, the Mathis leases and the Zink Ranch leases.  Mayan has now completed an agreement with Glenn Supply Company whereby, subject to performance pursuant to the terms of the agreement, Mayan has resolved substantial recorded liabilities, exited its interest in the Horizon leases and acquired additional interest in both the Mathis and Zink Ranch leases which give Mayan 100% working interest and full operatorship of each of Mathis and Zink Ranch.

Highlights

·     Total payment of $65,000 to Glenn Supply Company (GSC) in lieu of approximately $304,000 in past due invoices and other recorded liabilities related to joint interest billings associated with the Zink Ranch leases and the Horizon assets

o  Initial payment of $15,000.00 has been paid to GSC

o  Additional payment of $15,000 due July 20, 2017

o  Final payment of $35,000 due August 20, 2017

·     Mayan will assign all right, title and interest in and to the Horizon leases to GSC.  The Horizon leases have been consistently uneconomic to Mayan and following failure of the fracture stimulation program attempted by Mayan (then Northcote) in 2013 it is not believed that these wells have any upside potential and as well bore only interests, no additional drilling upside on these leases exists for Mayan.  Further, Mayan had recorded $142,000 in present abandonment/decommissioning liabilities for these assets as of year-end 2016 which will be assumed by GSC as part of this transaction.

·     GSC will assign all right, title and interest in and to both the Mathis lease and the Zink Ranch leases to Mayan along with full control of operations.  Relative to Horizon, these leases have substantially less current production (though, as noted above, all Horizon production is and has been uneconomic) but are assessed to have substantially more upside.

o  Mathis leases:  The Mathis leases have two seismically identified drilling locations at shallow depth (less than 3500') in the Mississippian formation.  These leases are held by approximately 2 barrels per day of production from one well.  It is believed that owing to reduced costs in the oil services industry as well as stable oil and natural gas prices that a vertical well to target the Mississippian reserves may be attractive at current prices. 

o  Zink Ranch leases:  Originally acquired by Mayan (then Northcote) in 2014, presently production Zink Ranch is 8 boepd, but it was never developed further due to two unrelated factors:

(i)         Regulatory and legal challenges facing oil and gas operators in Osage County, Oklahoma that have now largely been resolved; and,

(ii)        An unfavourable operating agreement negotiated by prior management and Glenn Supply along with disputes arising between the Company and Glenn since acquisition of Zink Ranch.  These matters are now resolved through the agreement announced by this RNS.

Commenting on the above Mayan's CEO Eddie Gonzalez said:  "The transaction announced today unlocks substantial potential value for Mayan.  First, we resolved a substantial payable at 21 cents on the dollar while exiting a set of assets, Horizon, which have been a consistent operational and financial headache to the Company.

After careful review, we believe the Zink Ranch asset is an attractive oil and gas prospect.  The primary issue in my opinion was a poor operating agreement with Glenn Supply.  Frankly, Zink Ranch was and is the right type of project for a company like Mayan to undertake.  The geology, land, environmental, weather and operational variables which can impact execution of an oil and gas project are altogether the most favourable of any in Mayan's portfolio and now that Mayan has full control of this asset, the potential to either develop or monetize the asset offers Mayan value enhancing options in its US portfolio." 

**ENDS**

For further information visit www.Mayan energy.com or contact the following:

Notes:

Mayan Energy Limited is an AIM listed (London Stock Exchange) oil and gas energy company; whose present operations which are focussed on the redevelopment and enhancement of its upstream oil and gas interests in Oklahoma and Louisiana.