CALGARY, ALBERTA--(Marketwired - Sept. 26, 2016) -
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Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX VENTURE:MEI) announces an update on corporate production rates.
Based on field estimates, Manitok's production averaged approximately 4,825 boe/d from September 1, 2016 to September 19, 2016, with approximately 40% being light oil and NGLs. This represents an increase of about 35% from average daily production reported in the second quarter of 2016 and the highest production rate achieved by Manitok since early in 2014.
The increased daily production volumes are the result of shut-in volumes being placed back on production at Stolberg and Wayne, the removal of temporary pipeline restrictions experienced in Stolberg over the summer, and increased production volumes in Carseland due to gas plant improvements and removing restrictions on certain wells. In addition to the production increases at Carseland, Stolberg and Wayne, Manitok has added incremental production volumes at Rockyford as a result of participating at a 50% working interest level on a successful Lithic Glauc ("LG") discovery well and on a carried working interest of 5% on several of the initial Basal Quartz ("BQ") wells drilled by its farm-out partner on lands under a farm-out agreement.
It is worth noting during the same period of September 1st to 19th, the Corporation experienced production down time at Stolberg which equated to about 300 boe/d (90% gas) and currently has two shut-in BQ wells in Carseland that it intends to tie-in early in 2017, once the 2016 drilling program at Carseland is completed. Manitok expects that the Carseland BQ wells will come on-stream at an initial rate of approximately 500 boe/d.
Manitok is currently drilling a horizontal LG well at Carseland, which will be followed by a second Carseland horizontal LG well, and the first horizontal LG well drilled in the Wayne area. Manitok anticipates it will participate in at least one horizontal LG well (0.5 net) in Rockyford with its farm-out partner in October. These four (3.5 net) wells will be tied in and add incremental production volumes during the fourth quarter.
All of the horizontal LG wells are anticipated to be drilled using a monobore drilling plan which will significantly reduce drilling costs per well and increase the anticipated return on capital. The monobore drilling plan has been used by industry in progressively deeper zones since Manitok last drilled in 2014. Given its track record, the risk-reward ratio made it favorable to utilize in the Corporation's 2016 drilling program and in the future.
Manitok has endeavored to maintain a balanced approach towards production, and drilling opportunities, between light oil and natural gas. The prices for both commodities reached multi-year lows in the first 2 quarters of 2016 which negatively impacted funds from operations. The commodity price environment has rebounded from the multi-year lows and Manitok is now in a position to benefit from both increased production volumes and increasing commodity prices.
Massimo Geremia, President & CEO of Manitok, states, "Everyone at Manitok is excited about the potential for future production growth with fewer restrictions at both Stolberg and Carseland. We are especially excited to be drilling in Carseland again and testing the Wayne area given our recent success at Rockyford."
Manitok is a public oil and gas exploration and development company focused on conventional Mannville and Cardium oil and gas reservoirs in both southeast, and west central Alberta. The Corporation will utilize its experience to develop the untapped conventional oil and liquids-rich natural gas pools in its core areas of the Western Canadian Sedimentary Basin.
Forward-looking Information Cautionary Statement
This press release contains forward-looking statements. More particularly, this press release contains statements concerning planned exploration and development activities, the development and growth potential of Manitok's properties, anticipated initial flow rate of its Carseland BQ well, the planned use of monobore drilling plan for drilling Manitok's horizontal LG wells at Carseland and Wayne area and the anticipated cost savings resulting from the use of such monobore drilling plan.
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 and monobore drilling plan, 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, general business, economic, competitive, political and social uncertainties, capital market conditions and market prices for securities 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.
Any references in this press release to initial and/or final raw test or production rates and/or "flush" production rates are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily determinative of the rates at which such wells will commence production and decline thereafter. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Corporation. The initial production rate may be estimated based on other third party estimates or limited data available at this time. In all cases in this press release, initial production or test are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
Barrels of Oil Equivalent
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 (6 mcf) of natural gas to one barrel (1 Bbl) of crude oil. 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 equivalency 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.