CALGARY, ALBERTA–(Marketwired – May 24, 2017) – Manitok Energy Inc. (the “Corporation” or “Manitok“) (TSX VENTURE:MEI) is pleased to announce amended terms of its Lease Issuance and Drilling Commitment Agreement (the “Agreement“) with an Alberta based royalty company (the “Company“). Summary of the key terms of the revised Agreement are as follows:
In the amended Agreement, Manitok has agreed to:
- the early surrender of approximately 148,000 acres of undeveloped leased lands located mostly in the northern end of the Entice block in Manitok’s Beiseker and Strathmore areas and the payment of cash consideration of approximately $1,998,520, with $350,000 having been paid immediately on the execution of Agreement and the remainder to be paid by Manitok following the completion of its previously announced plan of arrangement with Craft Oil Ltd. which is anticipated to be closed on or about June 6, 2017 (the “Arrangement”);
- assign its existing gross overriding royalty (“GORR”) on Section 28-41-07 W5M at Willesden Green, Alberta, grant a 4% GORR on its working interests on developed and undeveloped lands at Willesden Green, Alberta and grant a 4% GORR on its working interest on undeveloped lands at Stolberg, Alberta, and related tax pools; and
- convey its proprietary interest in various 2D and 3D seismic data sets and related tax pools while obtaining a concurrent 15 year seismic data licence to such 2D and 3D seismic data.
In the amended Agreement, the Company has agreed to:
- adjust the remaining drilling and completion expenditure commitment from $56.0 million to $24.0 million, with $8 million required by December 31, 2017 and the remainder by August 31, 2018;
- conditional upon closing of the Arrangement, extend the primary term on 1,554 hectares (3,885 acres) of undeveloped land at Wayne, Alberta that were previously due to expire on June 15, 2017; the renewed primary term will extend these leases for an additional three (3) years; and
- adjust the Agreement terms to provide Manitok with the option to extend the primary term associated with all undeveloped leased lands within the Agreement (expiring on April 30, 2018) for an additional thirty-two (32) months to December 31, 2020 at $600/hectare with no capital commitment in the future, versus the previous $400/hectare plus future capital commitment.
The land under the Agreement held by Manitok has become its core area of operation. The Corporation has taken the production in the Entice area from zero to a peak of approximately 3,200 boe/d in December 2016, during the early development phase of its operations. Currently Manitok has identified a development drilling inventory of approximately 56 Lithic Glauconitic oil horizontal locations and approximately 46 Basal Quartz oil horizontal locations on the Carseland and Wayne area lands continued to be held under the Agreement in this area. The amended terms of the Agreement will enable the Corporation to continue to develop this prolific core area in a financially stable manner.
Manitok is a public oil and gas exploration and development company focused on Lithic Glauconitic light oil in southeast Alberta and Cardium light oil in west central Alberta. The Corporation utilizes its expertise, combined with the latest recovery techniques, to develop the remaining oil and liquids-rich natural gas pools in its core areas of the Western Canadian Sedimentary Basin.