CALGARY, Sept. 21, 2011 /CNW/ - Kallisto Energy Corp. (TSXV: KEC)
("Kallisto" or the "Company") is pleased to provide an update on its
two major properties located at Pembina and Crossfield, Alberta.
Kallisto has been successful in assembling an extensive land position at
Crossfield totaling approximately 125 net sections of land.
Though the focus of the Company in this area has been primarily Viking
Oil, it has identified additional prospective zones, including the
Mannville. Kallisto successfully confirmed commercial productivity of
the Lower Mannville (Ellerslie) formation with the test of an oil and
liquids-rich gas well located at 10-34-27-1W5. Subsequent to the
testing of the 10-34 well the Company acquired 3D seismic covering
certain of its lands in the area and has applied for a license to drill
a vertical well at 11-26-27-1W5 to further define the Lower Manville
opportunity. Management is targeting to spud this well in Q4 2011.
Should this well be successful, management anticipates completing an
expanded 3D seismic program on its lands to identify additional
Ellerslie locations and then drilling a horizontal well on Company
While tests of the Viking formation in the Company's wells have been
less successful than management had anticipated, they have confirmed
the presence of both oil and natural gas in the formation.
The 1-29-28-1W5 well, which appears to have been damaged by the fracture
stimulation, continues to produce approximately 10 bbls of oil per day
(5 bbls per day net to Kallisto).
The second Viking well completed on Company lands, located at
15-7-28-1W5, was placed on production in late March 2011. During the
first 60 days of production, after accounting for the recovery of load
fluid, the well produced an average of approximately 310 mcf per day
and 11 bbls of oil and natural gas liquids ("NGLs") for a total of
approximately 52 boe per day. The wellbore was reconfigured and
artificial lift installed in June 2011 and was shut in for a
significant portion of June and July due to weather, equipment, and
third party facility challenges. During August 2011, the well has
produced an average of approximately 15 bbls of oil and NGLs per day
and 248 mcf of natural gas per day for a total of 56 boe per day (36
boe per day net to Kallisto).
Subsequent to drilling these wells, Kallisto conducted a further
technical review of the project, including further geological and
geophysical studies, detailed reservoir engineering and the analysis
and testing of Viking formation core obtained through its drilling
program. As a result of that review, it is management's view that:
The Viking formation on the Company's lands is made up of several
distinct reservoirs, some of which are primarily oil bearing and more
permeable and some that are predominantly charged with natural gas and
Fracture treatments that include a binding gel damage the reservoir,
severely restricting the flow of hydrocarbons into the wellbore.
Management anticipates that it will drill a well in part of the oil
bearing reservoir of the Viking in Q1 2012. Should this well be
successful, the Company believes that it has a number of oil locations
to drill on its lands.
The Company's Pembina Cardium horizontal oil project continues to
outperform independent engineering estimates. The first three months
average production for the 7 wells drilled to date is approximately 174
boe per day (52 boe per day net), 90% of which is oil, placing this
project in the upper quartile for all Cardium horizontal oil wells
drilled in Alberta since 2008. These wells were drilled and completed
at an average cost of approximately $2.6 million per well. Operating
costs for the field are less than $6.00 per boe. For the month of
August, the wells produced an average of 309 boe per day (93 net to the
Company), 80% of which was oil.
There are 6 remaining locations to drill on the Company's three 30% WI
sections of land at Pembina. Following discussions with our partner,
Kallisto expects to participate in the drilling of 2 - 3 wells before
the end of 2011.
As at the date of this Press Release, Kallisto has positive working
capital, including $3.1 million in cash, and undrawn bank lines of $6.5
million. For the six months ended June 30, 2011, the Company generated
cash from operations of $755,000.
Based on the independent report prepared by the Company's petroleum
engineering consultants (Sproule Associates Ltd.), effective as of
December 31, 2010, Kallisto's oil and gas assets were worth
approximately $0.41 per share (2P NPV 10%, before income tax). This
excludes any value attributed to the Company's undeveloped land
holdings or any material value for its Crossfield Viking lands.
The management and directors of Kallisto are focused on increasing
shareholder value and believe that value can be added through the
continued development of its Crossfield properties and Pembina Cardium
Kallisto is a Calgary-based junior resource company engaged in the
exploration, development and production of oil and natural gas in
Forward Looking Information
The reader is advised that some of the information contained herein may
constitute forward looking statements within the meaning assigned by
National Instrument 51-102 and other relevant securities legislation. It includes, but is not limited to, statements with respect to well
production and performance, expected timing of well development and
operations including the anticipated dates for the drilling of wells,
oil and gas reserves value, and future sources of cash to fund
operations. Forward-looking information is frequently characterized by
words such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "scheduled", "potential", or other similar
words, or statements that certain events or conditions "may", "should"
or "could" occur. Forward-looking information is based on the
Company's expectations regarding its future growth, results of
operations, production, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, plans for and results of drilling activity,
environmental matters, business prospects and opportunities. Such
forward-looking information reflects management's current beliefs and
assumptions and is based on information currently available to it. The
reader is cautioned that assumptions used in the preparation of such
information, although considered reasonable by the Company 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
Forward-looking information involves significant known and unknown risks
and uncertainties. A number of factors could cause actual results to
differ materially from the results discussed in the forward-looking
information including risks associated with the impact of general
economic conditions, industry conditions, governmental regulation,
volatility of commodity prices, currency fluctuations, imprecision of
reserve and resource estimates, environmental risks, competition from
other industry participants, the lack of availability of qualified
personnel or management, stock market volatility and the Corporation's
ability to access sufficient capital from internal and external
sources. Additional risks and uncertainties are described in the
Company's Short Form Prospectus dated February 7, 2011 and Annual
Information Form which are filed on SEDAR at www.sedar.com.
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:
President and Chief Executive Officer
Telephone: (403) 237-9996