Reliable Energy Ltd.

Reliable Energy Ltd.

November 18, 2010 13:44 ET

Reliable Energy Ltd. Provides Operations Update Announces Executive Appointment

CALGARY, ALBERTA--(Marketwire - Nov. 18, 2010) -


Reliable Energy Ltd. ("Reliable" or the "Company") (TSX VENTURE:REL) is pleased to provide an operational update on its current drilling activities.


During the third quarter of 2010, Reliable commenced drilling its first horizontal well in the South Kirkella pool, and to date, has drilled a total of 4 gross (3.5 net) horizontal wells, including 2 gross (2.0 net) wells in the South Kirkella pool, 1 gross (0.75 net) well in the Kirkella North pool and 1 gross (0.75 net) well at Elkhorn. Overall, the Company's operations have been hampered by continuing wet weather conditions in the Kirkella area of southeastern Saskatchewan/southwestern Manitoba as well as shortages of oilfield services (particularly fracing crews required for the Company's horizontal wells) as demand for services has outstripped supply. These factors have combined to delay the completion of the Company's horizontal wells.

The drilling results from the first two horizontal wells at South Kirkella were very encouraging with excellent reservoir quality encountered throughout the Bakken zone. Both wells were drilled with 1,000 metre horizontal laterals. Delays and equipment failures during the fracing operations have resulted in only partial completion of these two wells. The 6-15 horizontal well was, however, recently placed on production test with only 40% of the planned fractures having been completed. Despite these challenges, production rates obtained during the testing and clean up phase of the 6-15 well are extremely encouraging. The balance of the fracing operations for this well will be completed when equipment becomes available. The offsetting well at 5-15, along with the third and fourth wells at Kirkella North and Elkhorn, are still awaiting the resumption of the frac program, which is expected to commence November 22, 2010. Further detailed production volumes will be released when the wells have reached a stabilized oil cut and rate.

Murray Swanson, President and CEO of Reliable, commented, "The initial results from the production test on the 6-15 well are extremely encouraging, considering only 40% of the wellbore, or 8 of 20 stages, were frac'd."

By year-end, Reliable expects to have drilled a total of six horizontal wells. The challenge facing the Company will be in securing the services of fracing crews to successfully complete these wells. Recently, the Company has seen indications of an improvement in availability of frac crews, and as a result, Reliable expects at least four of the six wells to be completed and placed on production by year-end with the balance to be completed during January 2011. Consequently, the Company's estimates of annual average daily production have been revised downward to 350 boe/d to reflect the impact of weather and the availability of oilfield services has had on its operations with the year-end exit rate expected to be maintained at 800 to 900 boe/d.


The Board of Directors of Reliable is pleased to announce the promotion of Mr. Brett Frostad to the position of Vice President, Exploration. Mr. Frostad, a professional geologist, has over 20 years of industry experience, and most recently, he was Vice President, Exploration with a major energy trust. Mr. Frostad brings considerable experience in Reliable's core areas and in horizontal drilling operations.


Reliable will be presenting at the SEPAC Oil & Gas Investor Showcase on Monday, November 22, 2010, at the Westin Hotel in Calgary. Accordingly, a new investor presentation will be posted on the Company's website at prior to the event.


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, multiple formation potential and in which Reliable has identified a drilling inventory of 142 horizontal drilling locations.

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 under "Operational Update" as to the timing and number of horizontal wells expected to be drilled and completed in 2010, comments made by Murray Swanson regarding success of future wells, comments made regarding estimate annual average production guidance and exit production 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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