Reliable Energy Ltd.

Reliable Energy Ltd.

May 17, 2011 19:26 ET

Reliable Energy Announces Results of Second Manson Well, an Operations Update and Increase in Banking Facilities

CALGARY, ALBERTA--(Marketwire - May 17, 2011) -


Reliable Energy Ltd. ("Reliable" or the "Company") (TSX VENTURE:REL) is pleased to provide the following operations update along with details of an increase to its banking facilities.


Manitoba – To date in 2011, Reliable has drilled and placed on production five additional horizontal wells on its properties in Manitoba. As previously announced, at the end of the first quarter, Reliable had one well at East Manson drilled and awaiting completion, the delay resulting from a combination of frac crew availability and the commencement of spring breakup. To overcome the extremely wet operating conditions, Reliable purchased rig matting that enabled a frac crew to access the lease and complete the well, which was placed on production in mid-April. The well was completed in the Bakken with 18 frac intervals over the 600-metre horizontal section, has averaged 207 bbls/d gross (155 bbls/d net) over the first 30 days of production and is currently producing 190 bbls/d (143 bbls/d net). Total fluid production has averaged 345 bbls/d with a current oil cut of 63%. In addition to the final well at East Manson, Reliable drilled and completed another short leg (600 metre) horizontal well at East Manson that was completed using 11 frac intervals and a different fracing technique. The well has averaged 68 bbls/d gross (51 bbls/d net) for the first 30 days of production.

In addition to the two wells at East Manson, Reliable drilled three horizontal wells at South Kirkella. Performance from these wells has been hampered due to water breakthrough from the above Lodgepole formation, with production ranging from 25 to 42 bbls/d over their first 30 days on production. This is similar to the nearby 6-15 horizontal well that was drilled in 2010 and that had an initial low oil cut. By increasing the pumping rate, the oil cut increased from 5% to 15% resulting in the wells' production increasing to 85 bbls/d gross. As a result, after breakup, Reliable is planning to increase the pumping rate on the three recent South Kirkella wells.

Current corporate production is 850 bbls/d.

Montana Bakken Play – During March 2011, Reliable and its partners drilled and cased the second well on its Montana play. The onset of spring breakup resulted in the testing of this well being delayed, and as a result, the Company expects to have a service rig on location by the end of May 2011.


Reliable is pleased to announce that it has received an increase to its operating line of credit and development facility, which combine to total $17 million, up from a combined $12 million previously. The increase in the Company's banking facilities will provide Reliable with the flexibility to manage its 2011 capital expenditure 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 where it holds over 80,000 net acres of undeveloped lands. Kirkella is a Bakken oil rich prospect area that possesses high operating margins and multiple formation potential. The Company has an inventory of approximately 200 net horizontal drilling locations with a further 250 net potential locations identified in the Kirkella region. Reliable's second focus area is in Blaine County, Montana where the Company holds almost 100,000 net undeveloped acres on an emerging Bakken oil play.

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/Saskatchewan and Montana 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 statement in the paragraph titled "Montana Bakken Play" regarding the timing of completion of the well, the statement in the "Credit Facilities" paragraph regarding flexibility to manage the 2011 capital expenditure program and "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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