CALGARY, ALBERTA--(Marketwire - Sept. 8, 2011) -


Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX VENTURE:MEI) is pleased to provide the following update on its current and planned operations.


Manitok is near the completion of the tie-in operation of its discovery well. Manitok expects the well to be on production within the next week. The well is expected to initially flow at the unstimulated test rate of approximately 4 MMcf/day (664 boe/d) and 60 bbls/d of wellhead condensate. At Manitok's working interest of 75%, the well is expected to initially add approximately 543 boe/d net to the current corporate production of about 300 boe/d. Manitok will monitor production levels of the well for two to three weeks to determine if fracture stimulation (frac) is required. Manitok has anticipated that a frac may be required and has already scheduled the operation for late September subject to equipment availability and weather conditions.

Based on a third party engineering report and technical work completed internally, Manitok believes that the post-stimulation capability of the well could be in the range of 13 to 15 MMcf/d (up to 2,350 to 2,700 boe/d, which includes 15 bbls/MMcf of 52° API field condensate). In order to avoid over-capitalizing the well, Manitok has designed its well facility for 10 MMcf/day (1,800 boe/d, including field condensate at 15 bbls/MMcf) capacity of liquids-rich natural gas on a gross basis, which is approximately 1,350 boe/d net to Manitok. As with any operation in our industry, there are always potential risks that cannot be predicted which could negatively impact the estimates provided above.

Manitok is planning to drill six wells (5.75 net) at Stolberg before the end of the second quarter of 2012. Four (3.75 net) of these are horizontal Cardium light oil wells (43°- 46° API oil). The drilling operations will target three separate conventional Cardium light oil-bearing reservoir structures, with initial risked production rates of each well expected to be about 265 bbls/d. These unusual light oil Cardium reservoirs are surprisingly shallow for the foothills belt, and range from 800 meters to 1,500 meters in depth. Certain offset wells in this light oil pool have been prolific, with one particular well producing 700,000 barrels of light oil to date and the entire pool producing about 3 million barrels of light oil, along with 8 Bcf of associated natural gas, to date. The total cost to drill, complete, equip and tie-in each of these wells is about $5.1 million.

Two (2.0 net) additional vertical wells in this program will target deeper conventional Mannville and Cardium liquids-rich gas sandstone reservoirs with initial risked production rates of about 750 boe/d each, including liquids. The total cost to drill, complete, equip and tie-in each of these wells is about $6.4 million.

The first drill, a horizontal Cardium well, is expected to be spudded in early October, subject to rig availability. The remaining five drills will follow based on the timing of licensing and rig availability. The completion, equipping and tie-in operations will immediately follow each successful drill. Manitok is expecting to equip and tie-in one to two of these wells in the first quarter of 2012. The entire program will likely be fully completed by the end of the third quarter of 2012 depending on equipment availability and weather conditions. Given the current commodity price environment, the increased weighting of oil targets in our 2011 and 2012 drilling portfolio will potentially provide Manitok shareholders with an avenue of significant value creation in the near future.


Based on initial well logs and their similarity to nearby producing or previously producing wells, Manitok has drilled and cased six (6.0 net) successful heavy oil wells over the summer. Two drills could be new pool discoveries. Manitok is in the process of completing and equipping the wells for production. Two wells are expected to be on production in early September. The remaining four will be on production in early October in order to maximize the 5% royalty window of 12 months. Budgeted production from the six wells is anticipated to be between 150 to 200 bbls/d. Once on production, Manitok will have a better indication of the level of success of the wells, particularly the two possible new pool discoveries. Depending on the initial production rates of the recently drilled wells, Manitok is expecting to shoot a 3D seismic program over its lands in the fourth quarter and follow up with six to 10 drills in 2012.


Manitok has been very successful at Crown land sales this year. Manitok has continued to add to its land position in its core areas. To date this calendar year, Manitok has added about 39,200 net acres of undeveloped land. In total, Manitok now has 120,220 net acres of undeveloped land with 106,217 net undeveloped acres in the foothills. This is a 48% increase from December 2010 and a 148% increase from July 2010. Manitok's working interest in these lands is about 94%. This provides Manitok with a large inventory of diverse drilling targets to pursue in order to drive organic growth in the future.

Capital Expenditures

Manitok's expected 2011 capital expenditures of about $37.0 million will be a 414% increase over the total 2010 net capital expenditures of $7.2 million. This will lead to a significant increase in production, reserves and cash flow over the remainder of 2011 and into 2012. Capital expenditures for the first half of 2011 were $11.1 million. The remainder of 2011 will see an additional $25.9 million of capital expenditures, with another $11.0 to $12.0 million required in 2012 to finish the planned Stolberg drilling program. The capital expenditures are expected to be financed with cash of $35.1 million at June 30, 2011, cash flow and the current credit facility of $5.0 million. Manitok does not require additional financing in order to complete its currently planned 2011 and 2012 drilling programs.


Manitok is targeting to exit 2011 at approximately 1,800 to 2,000 boe/d with about 27% being oil and NGLs. That would be a six-fold increase from our 2011 second quarter average production of 300 boe/d. As mentioned above, the majority of the added production is based on the expected outcome of the frac at the Stolberg discovery well, which is highly variable and makes the 2011 exit rate subject to significant volatility. Once the entire Stolberg drilling program is complete by the third quarter of 2012, Manitok expects to be at about 3,200 to 3,400 boe/d with about 39% being oil and NGLs. The latter expectation is less volatile and a better gauge of the success of the planned Stolberg drill program.

About Manitok

Manitok is a public oil and gas exploration and development company focusing on conventional oil and gas reservoirs in the Canadian foothills and heavy crude oil in east-central Alberta. Manitok's corporate strategy is that of being an "early mover" in the exploitation phase of the development life cycle of hydrocarbon reserves in the Canadian foothills. The Corporation will continue to utilize its experience and expertise to develop the untapped conventional sweet oil and liquids-rich natural gas pools in this large and under-exploited region of the Western Canadian Sedimentary Basin.

BOE Conversions: The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per boe amounts have been calculated using a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil. This boe conversion ratio of 6:1 is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Information Cautionary Statement

This document contains forward-looking statements regarding the business and operations of Manitok. All statements other than statements of historical fact contained herein are forward-looking statements under applicable securities laws. In particular, statements as to Manitok's anticipated capital expenditures and operational and drilling plans are forward-looking statements. These forward-looking statements are based upon various assumptions as to future well production rates, well drainage areas, success rates, timing and costs of future well drilling, the availability of capital and future costs and availability of labour and services. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. In addition, all such forward-looking statements necessarily involve risks associated with oil and gas exploration, production, marketing and transportation, such as loss of market, volatility of prices, currency fluctuations, imprecision of reserves estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

Neither the 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.

Contact Information:

Manitok Energy Inc.
Massimo M. Geremia
President and Chief Executive Officer

Manitok Energy Inc.
Tim de Freitas
Vice President, Exploration & Chief Operating Officer