Reliable Energy Ltd.

Reliable Energy Ltd.

December 22, 2010 09:00 ET

Reliable Announces Initial Gross Production Rates of 125 bbl/d on First Horizontal Well and Increased Credit Facility

CALGARY, ALBERTA--(Marketwire - Dec. 22, 2010) -


Reliable Energy Ltd. ("Reliable" or the "Company") (TSX VENTURE:REL) is pleased to provide initial production results from the 5-34-11-29W1 horizontal well completed in the Bakken formation on its Kirkella property in Manitoba. Drilled from 4-27-11-29W1, the 5-34 well reached total depth on November 17th, 2010 and is comprised of a 1,200 meter horizontal lateral section that encountered excellent quality Bakken reservoir throughout. The well was completed using a multi stage frac system with a total of 15 stages being fracture stimulated. This is the first well in Reliable's horizontal drilling program to be successfully completed in its entirety and placed on production. The well commenced production on December 3rd, 2010 and has been producing continuously since. During the clean-up phase of production, the oil cut has continuously increased to 35% while total fluid production has averaged 358 bbl/day. Over the last 24 hour period, the well has produced 125 bbls (94 bbls net) of light sweet oil. The well is expected to continue to clean up and stabilize over the next several weeks and the well has been set up as a single well battery until it can be tied into our central battery at our 14-10 site.

The Company has drilled a total of 5 (4.3 net) horizontal wells to date on its Kirkella and Elkhorn properties in Manitoba. As previously announced, the Company has experienced significant issues in accessing the equipment and services necessary to complete these wells, however the Company is working closely with the frac companies to ensure availability of services in the new year. Two wells, 5-15-11-29W1 and 6-15-11-29W1, have been partially completed and are still awaiting the conclusion of their respective frac programs. These wells are currently on production test while awaiting frac equipment. The first well, 6-15, has had eight of twenty planned fracs completed and has been on production since November 9. In December, the well has produced an average of 75 BOPD (net). The company expects the final results of the 6-15 well to be similar to the 5-34 well. The 5-15 well has just been placed on production and is currently in the initial clean-up phase of production. Further results of these production tests on the 5-15 and 6-15 wells will be released upon the completion of the frac programs. Reliable has 2 (1.5 net) wells currently awaiting commencement of their frac programs. These wells, the 6-34-11-29W1 and the 10-8-11-28W1 horizontals at Kirkella and Elkhorn respectively, are not expected to be completed and on production until January 2011.

Corporate production is currently at 600 bbls of oil per day. Based on results of the 5-34 well, management believes that there is a further minimum of 300 bbls of oil per day (net) behind pipe and awaiting completion. Reliable does not expect to have any more wells frac'd and completed prior to year end due to lack of equipment and services and, accordingly, has revised downwards its year end exit rate to 600 bbls of oil per day.

Murray Swanson, President and CEO stated that "while we are disappointed that we have been unable to complete all five horizontal wells drilled this year because of equipment availability, we are extremely encouraged by the results from the 5-34 well, which has exceeded initial expectations. Furthermore, the test results from the 5-15 and 6-15 wells indicate that once they have been completed in their entirety that we will achieve our planned production levels for these respective wells."

Reliable has identified 142 prospective horizontal drilling locations in the Kirkella area and is continuing to add to this total through ongoing exploration.


Reliable is pleased to announce that it has received an increase in its revolving operating facility to $10 million, up from $6 million. At the same time, the bank has reduced the interest rate on the facility to prime plus 1.25%, down from prime plus 1.5%. The increased facility, utilised with prudent risk management practices, will provide Reliable with the necessary capital for its Q1, 2011 drilling program.


Reliable Energy Ltd. is an Alberta based junior oil company with a strong exploration component that commenced operations in 2005. Reliable's activities are primarily focused in the Kirkella area situated on the Saskatchewan/Manitoba border. Kirkella is a Bakken oil rich prospect area that possesses high operating margins and multiple formation potential. The Company has identified an inventory of 142 prospective horizontal drilling locations in the Kirkella area.

Reliable's goal is to become a low cost, value added growth company. The Company's strategy is to concentrate on exploration and development drilling activities in oil rich core areas. Reliable will continue to build on its highly prospective light oil land position in Manitoba and Saskatchewan and, through prudent development, add to its reserves and production base with the objective of providing sustained future growth and superior returns to shareholders.

Common shares of Reliable Energy Ltd. are listed for trading on the TSX Venture Exchange under the symbol REL.

ADVISORY: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, the statements about number of barrels of oil behind pipe, comments made by Murray Swanson regarding future success of wells , comments made regarding estimate exit production guidance rates and all statements in the first two paragraphs of "About Reliable" are forward-looking statements. Although Reliable believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Reliable 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. The forward-looking statements contained in this press release are made as of the date hereof and Reliable undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of any offer to buy the securities in the United States. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of such Act.

Neither 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.

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