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Reliable Energy Ltd.: Reliable Energy Ltd. Announces Closing of Private Placement and Strategic Joint Venture

^{Published on 2009-10-05 05:46:59 - Market Wire}
 

CALGARY, ALBERTA--(Marketwire - Oct. 5, 2009) - Reliable Energy Ltd. (the "Company" or "Reliable") (TSX VENTURE:REL) is pleased to announce that it has closed a private placement and executed a Joint Venture Agreement with an intermediate oil and gas producer ("the Company"). The private placement, for a total of $5.20 million at $0.15 per share includes an investment of $4.825 million by the Company, representing 19.9% of the issued and outstanding shares of Reliable. In addition, insiders subscribed to the balance of the private placement. As a result, the company now has 161,523,206 common shares issued and outstanding.

The Joint Venture, centered on Reliables core area of southeast Saskatchewan and southwest Manitoba (the "core area"), includes undeveloped lands contributed by both the Company and Reliable, whereby Reliable will operate the Joint Venture and retain a 75% working interest in the properties subject to certain terms and conditions. In part consideration for its 25% working interest, the Company will pay Reliable, $1.6 million in cash. Reliable will maintain its original working interest in its discovery pool. Upon execution of the agreement, Reliable will hold approximately 63,000 acres (gross), 47,000 acres (net) of undeveloped lands in the core area, plus approximately 15,000 acres (gross), 11,250 acres (net) of unearned farm-in lands.

Operations Update

The Company is pleased to provide the following operational update. As previously announced, Reliable commenced completion operations on two Bakken wells in August 2009. As a result the Company has placed the wells on production with initial oil production rates of approximately 69 and 49 bbl/d respectively. Based on the results of these wells, the company has now identified a further 15 development drilling locations on its lands.

The Company has commenced preparations for its exploration and development program and is planning to drill 7 to 9 exploration wells and 4 to 6 development wells before year-end.

About Reliable

Reliable is an Alberta based public company listed on the TSX Venture Exchange. The Company is currently focused on two core areas in the Western Canadian Sedimentary Basin. The first core area consists of an unconventional resource play in the Bakken/Three Forks formation situated on the Saskatchewan - Manitoba border. The second is a Devonian reef play in central Alberta.

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.