CALGARY, ALBERTA–(Marketwired – April 27, 2017) – Manitok Energy Inc. (“Manitok” or the “Corporation“) (TSX VENTURE:MEI) is pleased to announce that it has completed an acquisition from an Alberta based oil and gas company to acquire a 100% working interest in approximately 1.1 Mmcf/d (175 boe/d) of natural gas production, based on field estimates, in the Carseland, Alberta area (the “Acquisition“). In addition to the current production, the Acquisition includes 13 sections of developed P&NG rights to the base of the Belly River formation complete with full 3D seismic coverage, and approximately 170 kilometers of related gathering systems extending over 3 townships. The Corporation paid a cash consideration of $75,000 and assumed discounted abandonment liabilities of approximately $400,000 (10% discount rate) for the Acquisition.
The Acquisition is of value to Manitok in the following ways:
- the acquired gathering system contains a segment of pipeline that will facilitate a lower cost tie-in for four Manitok wells; two Basal Quartz (“BQ“) wells located on the surface pad at 3-16-23-25W4M and two Lithic Glauc (“LG“) wells located on the surface pad at 07-03-23-25W4M. The location of the existing pipeline is expected to reduce the installation costs associated with the tie-ins by about $1.0 million;
- the acquired gathering system extends Manitok’s infrastructure reach in its core Carseland area over 3.5 townships making it less costly to tie in wells drilled in the future as well as increasing the potential for securing future third party volumes for the Carseland gas plant; and
- Manitok has estimated recompletion potential in approximately 40 of the acquired wellbores and the lands associated with the Acquisition are contiguous to the Corporation’s Carseland block.
Production and Operations Update
Based on field estimates, Manitok’s net production averaged 6,120 boe/d (38% oil and liquids) during the first quarter of 2017 which is a 39% increase over first quarter 2016 average production of 4,407 boe/d (46% oil). Approximately 75 boe/d was lost to unanticipated production down time during the quarter.
The year over year production increase was achieved even though there has not been any additional production added from drilling since December 2016 due to the inability to complete (i.e.: fracture stimulate) the last two horizontal wells that were drilled late in 2016. Manitok was unable to complete the final two wells of the 2016 drilling program due to the lack of availability of frac crews over the winter drilling season. Manitok expects to complete and production test these two wells late in the second quarter of 2017 and, if successful, tie them in at the same time as the three wells discussed in more detail below.
With the acquisition of the additional pipeline infrastructure in the Carseland area, Manitok anticipates it will tie-in the following three horizontal wells late in the second quarter of 2017:
- 02-09-23-25W4M (now 102/07-09-23-25W4M by name change) (the “07-09 well”): a lower BQ well that was drilled in 2014 and production tested for 206 consecutive hours until stable flowing conditions were observed. During the test period, the 07-09 well averaged 22.8 bbl/d oil and 989.6 Mcf/d natural gas for an average total of 186.2 boe/d and during the last 24 hours of the test period, the 07-09 well produced 15.1 bbl/d oil and 992.6 Mcf/d natural gas for an average of 179.0 boe/d;
- 03-09-23-25W4M (the “03-09 well”): a middle BQ well that was drilled in 2014 and production tested for 147 consecutive hours until stable flowing conditions were observed. During the test period, the 03-09 well averaged 137.2 bbl/d oil and 623.0 Mcf/d natural gas for an average total of 240.1 boe/d and during the last 24 hours of the test period, the 03-09 well produced 153.5 bbl/d oil and 1,208.0 Mcf/d natural gas for an average of 353.0 boe/d; and
- 10-04-23-25W4M (the “10-04 well“): a LG well that was drilled in 2016 and production tested for 253 consecutive hours until stable flowing conditions were observed. During the test period, the 10-04 well averaged 170.8 bbl/d oil and 402.6 Mcf/d natural gas for an average total of 237.3 boe/d and during the last 24 hours of the test period, the 10-04 well produced 215.5 bbl/d oil and 514.7 Mcf/d natural gas for an average of 300.5 boe/d.
Manitok anticipates adding approximately 800 boe/d (45% oil) of initial production from these three already completed wells and further anticipates additional volumes at Carseland when the two yet to be completed wells referred to above are successfully completed.
Projected Disclosure Timing – Year-End Financials, Year-End Reserves and Quarterly Financials
Manitok expects to announce its year-end financial results and to disclose its year-end reserves information on or about May 1, 2017. First Quarter 2017 financial results will be released no later than May 30, 2017.
About Manitok
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.