CALGARY, ALBERTA–(Marketwire – Feb. 25, 2013) –
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Manitok Energy Inc. (the “Corporation” or “Manitok“) (TSX VENTURE:MEI) is pleased to provide an update on its 2013 drilling program.
Manitok’s 10th and 11th Stolberg Cardium oil wells are both horizontal wells drilled at the southern end of the Stolberg trend. By design, both wells were drilled significantly deeper in the structured reservoir than the previous wells in order to understand the position of the oil/water contact. Neither well intersected formation water, which further supports Manitok’s contention of significant oil reserves in place at Stolberg.
Using the drilling rig, the 10th well was initially swabbed in at about 200 bbls/d (150 net) of light oil for 78 hours beginning January 6, 2013. Given that it was in line with management’s expectations, Manitok shut-in the 10th well and drilled the 11th well from the same pad. Since February 2, 2013, the 10th well has been free flowing oil to surface and it produced at a rate of approximately 400 bbls/d (300 net) of 45º API oil, with little or no associated gas, over a 30-hour period this past weekend.
The 11th well was swabbed in at about 180 bbls/d (137 net) of light oil for 31 hours beginning February 15, 2013 and it has free flowed oil since that time. This past weekend, the 11th well averaged approximately 500 bbls/d (380 net) of 45º API oil, with little or no associated gas, over the same 30-hour period mentioned above for the 10th well.
The significant increase in production rates during this initial test phase is partly due to the normal cleaning-up process and other normal start-up issues, including flow restriction due to wax build-up. As with many of Manitok’s Stolberg wells, wax from the oil is deposited in surface and subsurface piping and requires removal either by mechanical or chemical means. Until the optimal frequency and makeup of wax treatments are determined, initial production rates during the free-flowing test phase vary considerably. Production from both wells has not been optimized at this time, and it is anticipated that with artificial lift, initial production rates could improve noticeably.
Manitok’s eighth Stolberg Cardium oil well, in the southern end of the Stolberg field, was brought back on production this past weekend. The well was initially shut-in during January of this year due to an Alberta government monthly volume restriction under its guidelines for new oil pool discoveries. Last week, this well was approved to produce under unrestricted production guidelines. Over a 35-hour period this past weekend, the eighth well free flowed to surface at an average rate of approximately 710 bbls/d (579 net) of light oil and 66 boe/d (54 net) of associated gas. To date, this well has free flowed over approximately 50,000 barrels (40,800 net) of 48º API oil.
While the flow rates from wells in the southern end of the Stolberg trend are lower than the initial production rates of the wells in the northern end, Manitok believes that it is possible that due to the lower reservoir intersection, these wells may ultimately yield higher reserves per well as is apparent in some of the oil wells in the analogous Cordel Cardium oil pool to the north. However, with the limited production history in the Stolberg trend to date, this belief cannot be confirmed at the present time. Manitok believes that the greater volume of associated gas in the section 29 wells, at the northern end of the Stolberg trend, partly explains the higher initial test rates there versus the latest wells drilled at the southern end of the field.
The test rates from both the 10th and 11th wells significantly exceed the type curve being used in Manitok’s 2013 guidance. Based on current commodity prices, that type curve uses an initial production rate of 265 bbls/d and generates an internal rate of return (“IRR“) in excess of 100%. The parameters used in estimating Manitok’s IRR are outlined in Manitok’s corporate presentation, which is available on its website, www.manitokenergy.com.
Manitok’s 12th Stolberg Cardium oil well is currently being drilled at the northern end of the Stolberg trend. Results will be provided as soon as practicable after drilling operations are complete.
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 concerning anticipated rates of production and Manitok’s operational and drilling plans.
The forward-looking statements in this press release are based on certain key expectations and assumptions made by Manitok, including 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, the 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 SEDAR profile at www.sedar.com.
Forward-looking statements are based on estimates and opinions of management of Manitok at the time the statements are presented. Manitok may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but Manitok undertakes no obligation to update or revise any forward-looking statements, 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). This 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 equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Manitok Energy Inc.
Massimo M. Geremia
President & Chief Executive Officer
Manitok Energy Inc.
Tim de Freitas
Vice President, Exploration & Chief Operating Officer