KALLISTO SPUDS CROSSFIELD VIKING WELL, PROVIDES OPERATIONS UPDATE AND ISSUES STOCK BONUSES

CALGARY, Jan. 12 /CNW/ - Kallisto Energy Corp. (TSX Venture: KEC) ("Kallisto" or the "Company") announces that it spudded its third Crossfield, Alberta Viking horizontal oil well on January 7, 2011. The well, located at 15-07-028-01 W5, is operated by Kallisto and is expected to be completed with up to 15 multi-stage fracture stimulations utilizing GASFRAC Energy Services Inc's. proprietary Liquefied Petroleum Gas Fracturing Process. This is the same completion process that has been successfully used in other Viking horizontal oil wells in the Crossfield area. Kallisto has a 65% working interest in the 15-7 well.

The second well drilled at Crossfield, 08-20-028-01 W5, has been drilled and is awaiting completion. Discussions are ongoing with the operator to finalize a completion program. Management believes that the fracture stimulation on its first well, 01-29-028-01 W5, was ineffective, possibly due to low fracture conductivity and induced formation damage. Kallisto has a 50% working interest in both the 1-29 and 8-20 wells.

The Company's sixth Pembina, Alberta Cardium horizontal oil well, 12-33-047-03 W5, produced an average of approximately 176 boe per day during its first 30 days of production, including 3 days where the well was producing only part of the day. Unlike earlier wells, production from this well has been purposely limited by pump capacity. On January 7, 2011, after the initial 30 day production period, the well produced approximately 250 boe per day, including 206 bbls of oil. Kallisto's working interest in the Pembina wells is 30%. Kallisto has been notified by its joint venture partner that they expect to spud the seventh horizontal well in the program, 04-33-047-03 W5, within the next few days.

Completion and testing operations at the Company's liquids-rich Ellerslie gas well at 10-34-027-01 W5 are expected to commence within the next two weeks. Kallisto has a 50% working interest in this well which has approximately twelve meters of potential 12% porosity net pay.

Pipeline construction to tie-in the Company's multi-zone Cretaceous well at Ferrier, Alberta is expected to commence before the end of January, 2011. The Company has a 45% interest in the well, which is expected to produce liquids-rich gas.

Kallisto's current production is approximately 300 boe per day, including approximately 145 bbls of oil.  In addition, the Company has 50 boe per day of shut-in gas production.

The Company also announces that the Board of Directors has approved cash and stock bonuses to officers of the Company in recognition of their performance in 2010. The Company has received approval from the TSX Venture Exchange to issue 299,000 common shares as part of the bonus program at a deemed price of $0.72, being the last closing price of the Company's shares prior to the Board approving the bonuses. Following this transaction, the Company will have 54,960,978 common shares issued and outstanding.

Kallisto is a Calgary-based junior resource company engaged in the exploration, development and production of oil and natural gas, primarily in Alberta.

Forward Looking Information
The reader is advised that some of the information herein may constitute forward looking statements within the meaning assigned by National Instrument 51-102 and other relevant securities legislation. In particular these include, but are not limited to, statements with respect to current oil and gas production volumes, potential results from drilling and completion operations and encountering commercial quantities of oil, natural gas and natural gas liquids. These statements are based on management's current expectations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Kallisto at the time of preparation, may prove to be incorrect and readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to forward-looking information contained herein to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

Neither 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.

SOURCE Kallisto Energy Corp.

For further information:

Robyn Lore
President and Chief Executive Officer
Telephone: (403) 237-9996
Facsimile: (403) 264-0416

Profil de l'entreprise

Kallisto Energy Corp.

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