Manitok tests 1,530 boe/d, 738 bbl/d at Stolberg wells 2012-07-31 19:24 ET - News Release Mr. Massimo Geremia reports MANITOK ENERGY INC. REPEATS SUCCESS AT STOLBERG WITH PRODUCTION TEST RATES OF 1,530 AND 738 BOE/D ON ITS LATEST TWO LIGHT OIL WELLS Manitok Energy Inc. is providing an update on its operations. Manitok has completed production testing on its latest two drills in the Stolberg area of Alberta. The horizontal wells were the sixth and seventh wells of the 2012 drilling program, which is targeting conventional Cardium light oil. Both of these wells offset the second well of the 2012 program, which was still flowing at approximately 1,150 barrels of oil equivalent per day (909 net), including 1,020 barrels per day (806 net) of light sweet oil as at July 29, 2012. Without any fracture stimulation, the well has produced about 38,000 barrels of 51-degree API light sweet oil in its first 40 days of production, despite the usual minor facilities start-up issues. The lack of decline in the first month of production exemplifies the advantage of a conventional reservoir over unconventional reservoirs. Manitok's working interest in each of the three wells is 79 per cent. The sixth well was tested over a 60-hour period and free flowed at a stable, unstimulated average rate of approximately 1,073 bbl per day (848 net) of 48-degree API light sweet oil and 2.75 million cubic feet per day (2.2 net) of sweet natural gas for a total average rate of about 1,530 boe per day (1,209 net). The seventh well was tested for 81 hours and was swabbed at an average unstimulated rate of about 738 bbl per day (583 net) of 45-degree light sweet oil with no measurable associated gas. Neither of these horizontal wells were fracture stimulated. Therefore all volumes produced originated from the reservoir. These two wells are anticipated to be on production by approximately the end of the third quarter. With the results to date, Manitok believes that it now has approximately 20 additional drilling locations for Cardium oil in the Stolberg area. Operations update The third well (64-per-cent working interest) of the 2012 program, which has a 700-metre horizontal leg and was not fracture stimulated, is expected to be on production in the first week of August. Approximately 300 cubic metres of drilling fluids were lost to the reservoir during drilling and completion operations. Manitok anticipates an initial production rate of between 80 and 150 bbl per day (51 and 96 net, respectively) of light sweet oil. Manitok believes that, once the drilling fluids have been recovered to a greater degree, production rates should improve. The fourth well (65-per-cent working interest) and fifth well (72-per-cent working interest) were both deviated wells drilled from the same pad into the crestal (highest) part of the Husky Cordel oil pool. The total capital required to drill both wells combined was about $4.6-million ($3.4-million net), which is equivalent to the capital required for one horizontal well in the area. Both wells are at various stages of their respective completion operations. The fourth well is a Cardium natural gas well and earned an additional 40-per-cent working interest in lands with at least one offset location to Manitok's prolific Cardium oil wells mentioned herein (drills No. 2, 6 and 7 in the 2012 drilling program). The fifth well intersected a deeper Cardium zone, which is currently being evaluated for further completion operations once downhole pressure data analysis is concluded. Manitok expects to move forward on the completions operations of both wells in due course. Manitok is 14 days into drilling the eighth Cardium oil location (81.6-per-cent working interest) of the 2012 program. It is the first of two planned horizontal wells to be drilled from the same pad that offsets the first vertical Cardium exploration oil well, which tested at about 150 bbl per day of light oil and was on production in May and June. This well is, and will continue to be, shut in during the drilling operations. A multiwell battery will be installed following the completion of the two horizontal wells, which is anticipated to be by about the end of the third quarter. Financial update With the results of the latest two wells, Manitok is well on track to achieving its year-end exit production target of 3,730 to 3,830 boe per day, with about 57 per cent to 60 per cent coming from oil and liquids. Manitok has recently entered into an agreement with ATB Financial, which will increase Manitok's credit facility to $30-million versus its previous $25-million facility. Manitok continues to expect to be able to finance its previously announced $45.2-million capital expenditure program in 2012, with cash flow and its new credit facility. Manitok's second quarter financial results are expected to be released early in the week of Aug. 27 |