Manitok Energy Inc. Announces Corporate Production Reaches 3,500 boe/d With 1,900 bbls/d of Light Oil and Condensate in October 2012
CALGARY, ALBERTA--(Marketwire - Oct. 30, 2012) -
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Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX VENTURE:MEI) is pleased to provide an update on corporate production and guidance.
Manitok's daily corporate production is currently fluctuating between 3,400 and 3,500 boe/d with approximately 1,850 to 1,900 bbls/d of light oil and condensate which is about 54% of total production. This includes volumes from all the wells from the 2012 drilling program except the first well, which is shut in due to drilling, and also the fourth and fifth wells, which are awaiting completion operations. Manitok is on track to meet, and possibly exceed, its year-end exit production guidance of 3,830 boe/d (57 to 60% oil and condensate) as anticipated production from the ninth well and possibly increased volumes from facilities optimization at Stolberg are expected to provide additional production before the end of 2012. The remaining wells to be drilled in the 2012 program are likely to be on production sometime in the first quarter of 2013.
The second well of the 2012 program, a horizontal well along the Stolberg trend, continues to exceed our expectations. The well is currently flowing at about 840 boe/d (664 net), with 690 bbls/d (543 net) of light oil and 154 boe/d (121 net) of associated gas while being choked back by about 20%. It has cumulatively produced approximately 86,588 bbls (68,405 net) of 51° API oil after 98 days of production time to the end of September and surpassed 100,000 bbls (79,000 net) of cumulative production during October.
Manitok is currently drilling the horizontal leg of the ninth well of the 2012 capital program and will provide the test results as soon as available. The well is being drilled along the Stolberg trend like the first, second, sixth, seventh and eighth wells of the 2012 program. The fourth well, which is a shallow (approximately 900 meters) deviated gas well drilled along the Cordel trend was completed and tested at stable rate of approximately 300 mcf/d. Besides the potential for production, the well was also drilled in order to earn additional land along the Stolberg trend. The fifth well, a deviated well offsetting the fourth well, is anticipated to be completed in the near future. Results will be released when available. The third, fourth and fifth wells of the 2012 program were drilled to test the extension of the Cordel trend. Given the historic results achieved along the Stolberg trend to date, Manitok plans to focus its capital on drilling wells along the Stolberg trend for the remainder of 2012 and 2013.
Manitok's previous 2012 capital expenditure guidance, provided in its press release dated August 29, 2012 (the "August Press Release"), was about $47.8 million. It is now expected to be about $53 million, mostly due to increased working interests in each of the last five wells of the 2012 capital program relative to the previously budgeted working interests. The increased working interests are due to farming-in to a partner's interests and choosing to drill higher working interest wells in Stolberg versus Brown Creek. The total net Cardium wells in the 12 well 2012 capital program has now increased from the previous guidance of 8.4 to 9.0.
As a result of the successful equity financing in October and under the same assumptions provided in its guidance in the August Press Release, net debt at year-end 2012 is expected to be about $9.5 to $10 million rather than the previous guidance of $22 million. Manitok's credit facility is currently $30 million.
Manitok has a total of 750 bbls/d of oil hedged at a weighted average price of CDN$101.26 WTI for the remainder of 2012. The Corporation has 750 bbls/d hedged at a weighted average price of CDN$97.86 WTI for the first six months of 2013 and has 450 bbls/d hedged at a weighted average price of CDN$97.77 WTI for the last six months of 2013. The counterparties to the swaptions (the combination of a swap and selling a call option) have the right, up to December 31, 2012, to call 300 bbls/d at CDN$106.50 WTI for all of 2013, the right, up to December 31, 2013, to call 750 bbls/d at a weighted average price of CDN$97.77 WTI for all of 2014, and the right, up to June 30, 2013, to call 500 bbls/d at a weighted average price of CDN$98.00 WTI for the latter half of 2013.
Manitok intends to continue drilling Cardium light oil wells at either Stolberg or Brown Creek through 2013 at an estimated pace of about one well per month. The wells will be financed from cash flow and Manitok's current credit facility.
Manitok intends to announce its 2012 third quarter financial results early in the week of November 26, 2012.
Manitok is a public oil and gas exploration and development company focusing on conventional oil and gas reservoirs in the Canadian foothills. 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.