CALGARY, June 5, 2012 /CNW/ - Kallisto Energy Corp. (TSX Venture: KEC) ("Kallisto" or the "Company") announces that it is reviewing a proposal from the operator of its Pembina, Alberta Cardium oil field to establish a water-flood scheme on one of the three sections it has a working interest.
The proposal contemplates drilling five additional horizontal oil wells in the section, two in 2012 and three in 2013, bringing the total number of wells in the section to seven. The new wells are expected to be produced through the 5% royalty period for horizontal oil wells (the earlier of two years or 60,000 bbls). It is anticipated that three of the seven wells in the section will then be converted to water injection wells; one in 2012 and two in 2014/2015. Kallisto's share of the project costs is expected to be approximately $4.2 million; $1.6 million in 2012, $2.3 million in 2013 and $0.3 million in 2014/2015.
The development of its Pembina lands over the last few years has added significant reserve value and cash flow to the Company. Current total gross production from the Company's ten Pembina area wells is approximately 444 boe per day, including 335 bbls of oil per day. Kallisto has a 30% interest in the Pembina wells. Since the beginning of production operations, the ten Pembina area wells have produced approximately 398,000 boe, including 342,000 bbls of oil. The independent reserve evaluation completed for the Company (as of December 31, 2011) placed the value of Kallisto's Pembina reserves at $15,998,000 (2P, NPV 10% BT). This value does not include any potential impact of a water-flood scheme.
Kallisto is a Calgary-based junior resource company engaged in the exploration, development and production of oil and natural gas in Alberta.
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, timing of well drilling and completion and the conversion to water-flood 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 securities laws.
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 Annual Information Form dated May 22, 2012 which is filed on SEDAR at www.sedar.com.
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For further information:
President and Chief Executive Officer
Telephone: (403) 237-9996