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Mon, January 24, 2011
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Reliable Energy Completes 2010 Fracing Program and Announces a $22 Million Capital Budget for 2011 Including Drilling Explorati
CALGARY, ALBERTA--(Marketwire - Jan. 20, 2011) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Reliable Energy Ltd. ("Reliable" or the "Company") (TSX VENTURE:REL) is pleased to provide the following operations update along with details of its planned capital expenditure budget for 2011.
OPERATIONS UPDATE
Manitoba– Reliable announces that as of January 12, 2011, it has successfully completed the fracing of the four remaining horizontal wells from its 2010 drilling program. These wells have been placed on production and are currently in the clean up phase. Once production rates have stabilised, Reliable will provide a further update. In addition, production from the previously announced 5-34 horizontal well, which was placed on production December 3, 2010, has stabilised at 133 bopd. Reliable also advises that it has secured frac services for its Q1, 2011 drilling program at Kirkella, Manitoba.
Montana Bakken Play - Reliable has 1 (0.5 net) vertical exploration well planned for Montana in Q1, 2011 with drilling expected to commence February 15, 2011.
2011 CAPITAL EXPENDITURE PLANS
Reliable is pleased to announce that it has set its capital expenditure budget at $22.2 million for 2011.
Of the $22.2 million capital budget, Reliable is planning on spending $18.7 million on drilling 15 (12.0 net) horizontal wells and 2 (1.5 net) exploration wells in its Kirkella core area. In addition, the Company has 1 (0.5 net) exploration well planned for its Montana Bakken light oil play that will be drilled in the first quarter.
To facilitate growth, the Company is planning on investing $1.9 million (net) on facilities.
Reliable's capital expenditure budget also includes $1.1 million for seismic data and $0.4 million on land acquisitions.
The capital expenditure budget is expected to be financed from estimated 2011 cash flow of $20.3 million and unutilized credit facilities of $10 million.
2011 GUIDANCE
With the successful execution of its capital expenditure budget, Reliable expects to increase average production to 1,100 bopd, an increase of 229% over 2010 and exit the year at 1,500 bopd. Cash flow from operations is expected to be $20.3 million, an increase of $16.3 million over 2010, assuming a crude price average of Cdn. $81.00 per barrel.
The Company's guidance can be summarized as follows:
| Guidance | ||
| Production | ||
| Average annual production | 1,100 | |
| Exit production | 1,500 | |
| Funds from operations | $20.3 million | |
| Capital expenditures | $22.2 million | |
| Wells drilled - net | 14.0 | |
| Crude pricing | ||
| Average annual price CAD/bbl | $81.00 | |
ABOUT RELIABLE
Reliable Energy Ltd. is an Alberta based junior oil company with a strong exploration component that commenced operations in 2005. Reliable's activities are primarily focused in the Kirkella area situated on the Saskatchewan/Manitoba border. Kirkella is a Bakken oil rich prospect area that possesses high operating margins and multiple formation potential. The Company has identified an inventory of 142 prospective horizontal drilling locations in the Kirkella area.
Reliable's goal is to become a low cost, value added growth company. The Company's strategy is to concentrate on exploration and development drilling activities in oil rich core areas. Reliable will continue to build on its highly prospective light oil land position in Manitoba and Saskatchewan and, through prudent development, add to its reserves and production base with the objective of providing sustained future growth and superior returns to shareholders.
Common shares of Reliable Energy Ltd. are listed for trading on the TSX Venture Exchange under the symbol REL.
ADVISORY:This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, all the statements made under "2011 Capital Expenditure Plans" and "2011 Guidance" and all statements in the first two paragraphs of "About Reliable" are forward-looking statements. Although Reliable believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Reliable 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. The forward-looking statements contained in this press release are made as of the date hereof and Reliable undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of any offer to buy the securities in the United States. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of such Act.
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.
