Atikwa Resources Inc.

January 20, 2011 06:00 ET

Atikwa Spuds Manitoba Spearfish Light Oil Well

CALGARY, ALBERTA--(Marketwire - Jan. 20, 2011) - Atikwa Resources Inc. ("Atikwa" or the "Company) (TSX VENTURE:ATK) wishes to announce that, on Saturday January 15th, the Company spudded a new horizontal well targeting Spearfish light oil in the Pierson area of Manitoba. The new horizontal well at 11-26-01-28 W1 is surrounded by several offsetting horizontal wells. The three horizontal wells in the section to the west of the 11-26 well, are producing at an average rate of over 100 barrels of light oil per day, after five months of production based on publicly available industry data. The 11-26 well is the first of a multi well program that the Company has planned for the area in the first quarter of 2011. The Company currently has an inventory of 20 net drilling locations in the area based on three wells per quarter section. Some companies in the area are planning infill drilling density of up to six wells per quarter section. To date the Company has invested approximately $3,000,000 on land acquisitions and drilling in the Pierson area, the NI 51-101 reserves report prepared by AJM Petroleum Consultants effective November 30, 2010 lists the current proved plus probable net present value (NPV 10) of this property at $22,012,800. (This estimate of net present value does not necessarily represent fair market value.)

FINANCING. The Company has recently secured access to a non dilutive third party financing program (the "Funding Source") which could provide a significant portion of the capital required to fund the Company's go forward drilling program. Under this program, the Funding Source may elect to provide up to 70% of the capital required, on a well by well basis, in exchange for a predetermined share of the revenue stream from the well. That share of the revenue stream is then structured to decrease on a sliding scale basis after certain economic objectives have been met with a Company buy back provision contemplated at the end of the program. The Funding Source provides the company with access to capital without reducing its ownership interest in the lands or causing further dilution to existing shareholders through the need to issue additional shares from treasury to fund the drilling program.

This news release contains forward‐looking statements relating to the Company's plans and other aspects of the Company's anticipated future operations, strategies, financial and operating results and business opportunities. Forward‐looking statements typically use words such as "anticipate", "believe", "project", "expect", "plan", "intent" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future, or consists of statements regarding estimates of future production, operating costs or other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance. Statements regarding reserves are also forward‐looking statements, as they reflect estimates as to the expectation that the deposits can be economically exploited in the future. Although the Company believes that the expectations represented in such forward‐looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward‐looking statements and you should not unduly rely on forward‐looking statements. The forward‐looking statements contained in this news release are made as the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward‐looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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.

Contact Information

  • Atikwa Resources Inc.
    Sean Kehoe
    President and CEO
    (403) 233-6073