CALGARY, ALBERTA–(Marketwired – July 30, 2013) –
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Manitok Energy Inc. (the “Corporation” or “Manitok“) (TSX VENTURE:MEI) is pleased to provide an update on its 2013 drilling program and on a new farm-in agreement.
The 16th Stolberg Cardium oil well, where Manitok has a working interest of 33.3%, was completed and production testing operations are well underway. It is the fourth horizontal Cardium oil well of a four well pad on section 21 in the Stolberg area. As disclosed in Manitok’s July 26, 2013 press release, Manitok believes that this latest horizontal Cardium oil well has intersected a previously unrecognized oil charged Cardium reservoir trend in the Stolberg Complex. During the last 35 hours of testing (up to noon (Calgary time) on July 29, 2013), the unstimulated well free-flowed to surface at an average of rate of 722 bbls/d (241 net) of 37º API oil and 67 boe/d (22 net) of associated gas. This brings the combined tested production rate on the 4 well pad to over 3,300 boe/d (1,100 net), including over 3,000 bbls/d (1,000 net) of light oil. It is important to note that these production rates were achieved from unstimulated oil wells that have not been optimized with production facilities. More information regarding the individual flow tests of these wells can be found in the Corporation’s April 18, 2013, May 27, 2013, June 20, 2013 and July 26, 2013 press releases, which are available on the Manitok website at www.manitokenergy.com.
Manitok will continue to free flow the latest well for at least the next 24 hours and then shut it in for a buildup test to collect reservoir pressure data. Manitok is very encouraged by the capability of this new, deep structural trend within the Stolberg Complex, which Manitok believes will add five or more additional drilling locations in the area based on current data. The full extent of the new Cardium reservoir trend can only be determined through future deeper drilling along the trend.
Also, as disclosed in Manitok’s July 26, 2013 press release, the gas pipeline construction to the pad has already been completed. At any given time over the course of August and September, one to two of the four wells from the pad are anticipated to be rotated on production as battery construction takes place. All four wells are expected to be fully on production in early October.
Manitok has entered into a farm-in agreement with Legacy Oil + Gas Inc. (“Legacy“) in the Quirk Creek area of the Southern Alberta foothills, which is about 10 kilometers west of the Turner Valley oil field. The farm-in is on about 21 gross sections (13,440 acres) of land, with about 19.6 gross sections (12,544 acres) being prospective for sweet Cardium oil (“Farm-in Lands“). Legacy has approximately a 99% average working interest in the Farm-in Lands prior to Manitok earning. Manitok will pay 100% of the cost to drill, complete and equip one horizontal Cardium oil well (“Test Well“) in order to earn 70% of Legacy’s working interest, to the base of the deepest formation penetrated by the Test Well, in a 7 section (4,480 acres) block of land within the Farm-in Lands. Manitok has a rolling option to drill additional horizontal Cardium wells on the Farm-in Lands with the same earning parameters as the Test Well (“Option Wells“). In order to earn the entire 70% of Legacy’s working interest in the Farm-in Lands, Manitok would have to drill, complete and equip 3 horizontal Cardium oil wells at 100% of the cost.
The farm-in agreement requires Manitok to commence drilling the Test Well prior to December 31, 2013. Legacy has already licensed the well, completed all pre-spud requirements and constructed the drilling lease pad, all of which will be transferred to Manitok under the farm-in agreement. Manitok plans to drill 2 horizontal Cardium oil wells from the pad, with the first being the Test Well and, assuming a successful production test of the Test Well, the second being the first Option Well. Manitok plans to spud the Test Well early in the fourth quarter of 2013.
Manitok is a public oil and gas exploration and development company focusing on conventional oil and gas reservoirs in the Canadian foothills. Manitok’s corporate strategy is that of being an “early mover” in the exploitation phase of the development life cycle of hydrocarbon reserves in the Canadian Foothills. The Corporation will continue to utilize its experience and expertise to develop the untapped conventional sweet oil and liquids-rich natural gas pools in this large and under-exploited region of the Western Canadian Sedimentary Basin.
For further information view our website at www.manitokenergy.com.
This press release contains forward-looking statements. More particularly, this press release contains statements as to Manitok’s operational and drilling plan, the development and growth potential of Manitok’s properties and the anticipated timing of the drilling of the Test Well and the Option Well under Manitok’s farm-in agreement with Legacy.
The forward-looking statements in this press release are based on certain key expectations and assumptions made by Manitok, including the operational parameters specifically set out in the press release and expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the successful application of technology, validity of the geological and other technical interpretations that have been performed by Manitok’s technical staff, prevailing weather conditions, commodity prices, royalty regimes and exchange rates and the availability of capital, labour and services.
Although Manitok believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Manitok can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations, unexpected adverse weather conditions and changes to existing laws and regulations. Certain of these risks are set out in more detail in Manitok’s current Annual Information Form, which is available on Manitok’s profile profile on the System for Electronic Document Analysis and Retrieval (“SEDAR“) website at www.sedar.com and on the Corporation’s website at www.manitokenergy.com.
Forward-looking information is based on estimates and opinions of management of Manitok at the time the information is presented. Manitok may, as considered necessary in the circumstances, update or revise such forward-looking information, whether as a result of new information, future events or otherwise, but Manitok undertakes no obligation to update or revise any forward-looking information, except as required by applicable securities laws.
The term barrels of oil equivalent (“boe“) may be misleading, particularly if used in isolation. Per boe amounts have been calculated using a conversion ratio of six thousand cubic feet of natural gas (6 mcf) to one barrel of oil (1 bbl). The boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Massimo M. Geremia
President & Chief Executive Officer
Manitok Energy Inc.
Tim de Freitas
Vice President, Exploration & Chief Operating Officer