Manitok Announces Revised Terms and Additional Undeveloped Lands at Entice
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MANITOK ENERGY INC. IS PLEASED TO ANNOUNCE REVISED TERMS AND ADDITIONAL UNDEVELOPED LANDS AT ENTICE
May 1, 2015, Calgary, Alberta – Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX-V: MEI) is pleased to announce revised terms and additional undeveloped lands to the Lease Issuance and Drilling Commitment Agreement with PrairieSky Royalty Ltd. (the "Agreement"). The major terms of the Agreement are as follows:
- Manitok will acquire additional petroleum and natura l gas leases covering about 180 net sections (115,200 acres) in the Entice and Wayne area in southeast Alberta with access to proprietary 2D and 3D seismic data over the entire land base in exchange for a 4% gross overriding royalty with no deductions on its Stolberg lands (approximately 9,920 acres (5,555 net)) and production of about 3,800 boe/d from both the Cardium and Mannville formations effective as of January 1, 2015;
- the royalty rate will be amended to a flat rate of 17.5% retroactive to January 1, 2015, from the current Alberta Crown royalty based calculation of a minimum of 10% and maximum of 30%, providing a significant improvement in the payout period and the half cycle rate of return on the Corporation's lower Mannville drilling prospects;
- provisions have been added to allow greater flexibility through capital deferment and reallocation of capital to additional lands in the area under certain conditions;
- the primary term of the Agreement has been extended an additional 16 months from December 31, 2016 to April 30, 2018 with an option to extend for an additional period of four years; and
- the drilling and completion expenditure commitment will increase from $106.0 million to $126.0 million over the extended period of time thereby reducing the annual commitments as indicated in the following table:
|April 30, 2018||-||18,000|
The Agreement completes the checkerboard pattern from the original October 2013 agreement providing Manitok with a contiguous land block that covers 9 townships. Additionally, Manitok will add approximately 24 sections in the Wayne area which has a significant amount of well control due to historic drilling. The Corporation has identified approximately 59 Lithic Glauconitic ("Glauc") locations, with similar reservoir characteristics as the Glauc pool discovered in Carseland, and 6 Basal Quartz ("BQ") locations through well control. Combined with the current Entice lands, Manitok's drilling inventory now consists of approximately 108 Glauc and 62 BQ horizontal locations.
Manitok is a public oil and gas exploration and development company focusing on conventional oil and gas reservoirs in the Canadian foothills and southeast Alberta. The Corporation will utilize its experience to develop the untapped conventional oil and liquids-rich natural gas pools in both the foothills and southeast Alberta areas of the Western Canadian Sedimentary Basin.
For further information view our website at www.manitokenergy.com or contact:
Manitok Energy Inc.
Massimo M. Geremia, President & Chief Executive Officer
This press release contains forward-looking statements. More particularly, this press release contains statements concerning the Corporation's planned capital expenditures, planned exploration and development activities, the development and growth potential of Manitok's properties, revised terms of the Agreement, the terms conditions of the anticipated acquisition of additional undeveloped lands under the Agreement, the anticipated benefits of the revised terms of the Agreement and the acquisition of additional undeveloped lands under the Agreement,.
The forward-looking statements in this press release are based on certain key expectations and assumptions made by Manitok, including expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the successful application of technology, prevailing weather conditions, commodity prices, royalty regimes and exchange rates and the availability of capital, labour and services.
Although Manitok believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Manitok 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. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development project
s or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations, unexpected adverse weather conditions, general business, economic, competitive, political and social uncertainties, capital market conditions and market prices for securities and changes to existing laws and regulations. Certain of these risks are set out in more detail in Manitok's current Annual Information Form, which is available on Manitok's SEDAR profile at www.sedar.com.
Forward-looking statements are based on estimates and opinions of management of Manitok at the time the statements are presented. Manitok may, as conside red necessary in the circums tances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but Manitok undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.
Barrels of Oil Equivalent
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 (6 mcf) of natural gas to one barrel (1 bbl) of crude oil. The boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
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.