CALGARY, ALBERTA--(Marketwired - Sept. 21, 2016) -
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Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX VENTURE:MEI) announces the initial production rates from a successfully drilled horizontal Lithic Glauconitic ("LG") exploration well in the Rockyford area pursuant to a farm-out agreement that was previously announced in November 2015, and that it has spud the first horizontal LG well of its 2016 drilling program in the Carseland area.
Through its farm-out agreement in the Rockyford area of southeast Alberta, Manitok participated with its farm-out partner ("Partner") at a 50% working interest to drill its first horizontal LG well incorporating a monobore drilling plan to reduce capital costs. The total cost to drill and complete the well was approximately $1.3 million which is about a 52% decrease from the $2.7 million Manitok spent for the same operation in 2014.
The Rockyford horizontal LG well was completed in August 2016 and immediately tied-in after two days of production testing. The well has been flowing since late August and has recovered about 60% of the frac fluid used in the completion. In that time, the production rate improved by about 68% as more of the frac fluid was recovered. Over a 17 day period ending September 17, 2016, the well averaged about 396 boe/d (198 net), comprised of 56 bbls/d (28 net) of light oil, 1.8 Mmcf/d (0.9 net) of natural gas and 36 bbls/d (18 net) of NGLs. The well continues to flow back about 79 bbls/d of frac fluid.
Manitok will use the monobore drilling plan for all of its horizontal LG wells in its 2016 drilling program. Manitok spud its first horizontal LG well in the Carseland area on September 20, 2016. The first two horizontal LG wells of its 2016 drilling program are planned for the Carseland area and a third well will be the first horizontal LG well drilled in the Wayne area, all at a 100% working interest. The first three horizontal LG wells of the 2016 drilling program are anticipated to be completed and on production in the fourth quarter of 2016. In addition, it is anticipated that Manitok and its Partner will drill offsetting LG locations to the above-noted successful Rockyford well before the end of 2016.
The successful results of the first horizontal LG well in Rockyford builds on the initial success achieved at Carseland in late 2014, where the first two horizontal LG wells combined, have cumulatively produced over 350,000 boe to date. Based on field estimates, the two LG wells are currently flowing at a combined rate of about 900 boe/d with a 100% working interest. Based on production to date from the two areas, 3D seismic and well log data, the Corporation believes there are about 28 Carseland horizontal LG drilling locations, at a 100% working interest, and about 23 Rockyford horizontal LG drilling locations, where Manitok has an option to participate up to a 50% working interest in each well through its farm-out agreement. Manitok believes there are a total of approximately 150 horizontal LG drilling locations on its lands in southeast Alberta.
Massimo Geremia, President and CEO of Manitok, states, "The operational success of the monobore drilling plan in the Lithic Glauc play has significant implications to the value of Manitok's future drilling locations and reserves in southeast Alberta. Reducing the capital costs by more than half from 2014 levels allows the wells to be drilled economically at current commodity prices. Drilling the Lithic Glauc wells using the monobore drilling plan is a 'game-changer' in regards to finding and development costs, which will lead to greater value creation through the drill-bit for Manitok shareholders."
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.
View our website at www.manitokenergy.com.
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, planned use of monobore drilling plan for Manitok's 2016 drilling program and anticipated timing of completion of the first three horizontal LG wells.
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.