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CALGARY, ALBERTA--(Marketwired - July 24, 2013) - Kallisto Energy Corp. (TSX VENTURE:KEC) ("Kallisto" or the "Company") is pleased to announce that its application to drill an Elkton oil test at 16-26-027-01W5 ("16-26") has been approved by the Alberta Energy Regulator ("AER").
In August, 2012, Kallisto applied for a license to drill the 16-26 well. The owners of the Crossfield gas storage facility, CrossAlta Gas Storage & Services Ltd., TransCanada Pipelines Limited and TransCanada Energy Ltd. (collectively "TransCanada"), filed an objection to Kallisto's license application due to a concern over proximity of the 16-26 well to their gas storage facility. The AER conducted a public hearing on the application, commencing on February 12, 2013 and concluding on April 4, 2013. The AER announced its decision to grant Kallisto the drilling license on July 23, 2013. Conditions of the license require certain measurements systems to be put in place as well as certain drilling and abandonment requirements, none of which are considered by the Company to be onerous. The Company expects to spud the 16-26 well in mid-August, subject to weather conditions and rig availability. Should the 16-26 well be successful, management anticipates drilling additional locations.
Kallisto engaged Sproule Associates Limited ("Sproule") to complete an independent review of the oil potential on section 26-027-01W5. On November 22, 2012 Sproule issued its report entitled "Geological Review of the Oil Potential within the Elkton Formation on Section 26-027-01W5, Crossfield East Elkton Pool D" (the "Elkton Geological Review"). Kallisto filed the Elkton Geological Review with the AER in support of its 16-26 well license application. The Elkton Geological Review interpreted a down dip oil leg and estimated oil initially in place to be 8.462 million bbls. Kallisto's land holdings applicable to the Elkton Geological Review have been highlighted in yellow on the map found on page 6 of the Company's Annual Information Form. Management believes that the 16-26 well location, being at the lowest point in the interpreted oil leg, is well positioned to exploit the oil initially in place.
The Company's Elkton oil development activities are focused on recovering oil from an assumed oil leg to a previously prolific Elkton natural gas reservoir. The interpreted oil leg is on the same trend as multiple reservoirs that have similar characteristics. While the Company's evaluation and an independent evaluation suggest that there is oil initially in place, there can be no certainty that any portion of the oil will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the oil.
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