Manitok Energy Announces an Agreement to Sell 777 boe/d in the Central Alberta Foothills for $22.85 Million

Manitok Energy Announces an Agreement to Sell 777 boe/d in the Central Alberta 
Foothills for $22.85 Million 
NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Manitok Energy Inc. 
TSX VENTURE SYMBOL:  MEI 
FEBRUARY 27, 2014 
Manitok Energy Announces an Agreement to Sell 777 boe/d in the Central Alberta
Foothills for $22.85 Million 
CALGARY, ALBERTA--(Marketwired - Feb. 27, 2014) -  
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES OF AMERICA 
Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX
VENTURE:MEI) is pleased to announce that it has entered into a definitive
agreement to sell certain oil and gas assets in the Central Alberta Foothills
(the "Asset Disposition") for gross proceeds to Manitok of $22.85
million, less closing adjustments of approximately $0.85 million.  
The Asset Disposition includes approximately 777 boe/d (34% sweet natural gas,
60% sour natural gas and 6% liquids) of current production, based on February
field estimates up to February 21, 2014, and 36,000 net acres of undeveloped
land in the Antler, Banshee, Basing, Brown Creek, Cabin Creek, Gregg Lake,
Lovett River, Smoky, Solomon, Sundance and Tower Creek areas. The assets were
considered non-core and not forecast to receive any capital in 2014 or 2015.  
The reserves associated with the Asset Disposition were 3,729 Mboe on a proved
basis ("TP") and 4,708 Mboe on a proved plus probable basis
("TPP") based on Manitok's reserves report dated effective
December 31, 2012 as prepared by Sproule Associated Limited. Depletion over the
course of 2013 was 358 Mboe, based on average 2013 production of 981 boe/d. The
reserves figures include TP of 1,129 Mboe and TPP of 1,269 Mboe from shut-in
production at a Gregg Lake sour gas facility.  
The effective date of the Asset Disposition is January 1, 2014 and the closing
date is expected to be February 28, 2014. A portion of the proceeds will be
held in escrow in connection with right of first refusals ("ROFRs")
held by third parties who must either exercise or waive their ROFRs within 30
days. Approximately 220 boe/d of the Asset Disposition is subject to ROFRs.  
Capital expenditures in 2014 will increase from $104.5 million to approximately
$115.1 million, before the Asset Disposition. The increase is due to adding 2
(1.75 net) Foothills' wells to the 2014 capital program. Post the Asset
Disposition, Manitok will maintain its previously disclosed 2014 production and
cash flow guidance, however, net capital expenditures will decrease from $104.5
million to $93.1 million to reflect the proceeds from the Asset Disposition and
the upward capital adjustment. Net debt at the end of 2014 is anticipated to be
reduced by $13.0 million from the previously announced guidance.  
Capital Expenditures and Guidance 
The Corporation's 2014 capital program will be adjusted up by $10.6
million as per the following table:  
/T/ 
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Total Capital                       Wells Drilled 
($ millions)           Gross                 Net
----------------------------------------------------------------------------
Foothills - Stolberg                50.9              14                 8.5
Foothills - Other                   21.3               4                 3.4
Entice                              30.3              18                18.0
Land & Seismic                       3.2               -                   -
Other(1)                             9.4               -                   -
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Total                              115.1              36                29.9
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(1)   Other includes capital expenditures for a pilot waterflood project in  
Cordel, 2013 fourth quarter projects that carried into 2014,           
maintenance capital, corporate costs and capitalized overhead.         
/T/ 
2014 Guidance 
The Corporation is maintaining current guidance with adjustments to reflect the
Asset Disposition and a $10.6 million increase in capital expenditures. With
the adjustments, net capital expenditures have decreased by $11.4 million to
$93.1 million. The following table summarizes the difference:  
/T/ 
---------------------------------------------------------------------------- 
2014 Guidance     Difference from
Year                                   February 26, 2014    January 29, 2014
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
2014 Production                                                             
  Annual (boe/d)                           6,000 - 6,200                   - 
% Oil and liquids                          62% - 65%                   -
  Exit rate (boe/d)                        7,100 - 7,500                   - 
% Oil and liquids                          67% - 70%                   -
----------------------------------------------------------------------------
2014 Benchmark pricing                                                       
Crude oil - WTI (US$)                          92.00                   - 
$CAD/$US exchange rate                          1.06                   - 
Crude oil - WTI ($CAD)                         97.52                   - 
Differential - WTI ($CAD) to                                             
Realized                                    (10.77)                   - 
Natural gas - AECO daily spot                                            
($/MMbtu)                                      3.30                   -
----------------------------------------------------------------------------
2014 Funds from operations             $69 - $71 million                   -
Capital expenditures, net of                                                
 dispositions                              $93.1 million     ($11.4) million
Net debt at Dec 31, 2014               $56 - $58 million     ($13.0) million
----------------------------------------------------------------------------
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/T/ 
Credit Facilities 
National Bank of Canada will review the Asset Disposition in conjunction with
our 2013 reserves report and will provide an update to Manitok's credit
facility in the next several weeks. The credit facility is currently $105
million. 
2014 Financial Instruments 
Manitok has a total of 1,300 bbls/d of WTI oil hedged at CAD$94.52 for 2014.
Manitok has contracted forward physical sales of 6,000 GJs/d during the summer
months from April 1, 2014 to October 31, 2014 at $3.765/GJ and 5,000 GJs/d from
March 1, 2014 to March 31, 2014 at $5.10/GJ. In addition, the Corporation holds
put options on 10,000 GJs/d for 2014 at an average price of $3.55/GJ, with a
deferred put option premium of $0.35/GJ.  
Operational Update 
Based on field estimates, average production from February 1, 2014 to February
21, 2014, is approximately 6,000 boe/d (58% oil) which includes the production
from the Asset Disposition.  
Manitok has drilled Stolberg Cardium oil wells number 21 and 22. Both are
undergoing completions and tie-in activities and are expected to begin
producing sometime in March 2014. Stolberg Cardium wells number 23 and 24 are
currently being drilled.  
The second Quirk Creek well was drilled and is currently undergoing completions
operations. Both Quirk Creek wells are expected to be placed on production in
March 2014 after completions and equipping. 
Manitok spud its first well at Entice last week and drilling operations are
continuing. Manitok is anticipating that the rig will drill two to three wells
at Entice before break-up assuming normal drilling operations and subject to
the timing of break-up. A second drilling rig will spud another well at Entice
in the first week of March 2014. It is also anticipated that the second rig
will drill two to three wells assuming normal drilling operations and subject
to the timing of break-up.  
Change of Auditor 
The Corporation has filed a Notice of Change of Auditors on its SEDAR profile
at www.sedar.com in connection with the appointment of KPMG LLP as the auditor
of the Corporation. At the request of the Corporation, Kenway Mack Slusarchuk
Stewart LLP ("KMSS") resigned as the auditor of the Corporation
effective February 10, 2014. There were no disagreements, consultations or
unresolved issues with KMSS.  
About Manitok 
Manitok is a public oil and gas exploration and development company focusing on
conventional oil and gas reservoirs in the Canadian foothills and Southeast
Alberta. The Corporation will utilize its experience and expertise to develop
the untapped conventional oil and liquids-rich natural gas pools in both the
Foothills and Southeast Alberta areas of the Western Canadian Sedimentary
Basin. 
For further information view our website at www.manitokenergy.com. 
Forward-looking Statements 
This press release contains forward-looking statements. More particularly, this
press release contains statements concerning the anticipated date of closing of
the Asset Disposition, planned capital expenditures, the anticipated year end
net debt, the breakdown of planned capital expenditures by class and area,
planned exploration and development activities, the anticipated 2014 average
and exit rates of production, the anticipated annual funds from operations in
2014, anticipated review of Manitok's current credit facility as a result
of the Asset Disposition, the hedging strategy for 2014 and the development and
growth potential of Manitok's properties. 
The forward-looking statements in this press release are based on certain key
expectations and assumptions made by Manitok, including the operational
parameters specifically set out in this press release and expectations and
assumptions concerning the success of future drilling and development
activities, the performance of existing wells, the performance of new wells,
the successful application of technology, prevailing weather conditions,
commodity prices, royalty regimes and exchange rates and the availability of
capital, labour and services. 
While the Corporation anticipates remaining disciplined with its 2014 capital
program, readers are cautioned that the Corporation may make adjustments to its
2014 capital program, depending on business conditions and commodity prices
throughout the fiscal year. Actual spending may vary due to a variety of
factors, including changes to certain key expectations and assumptions set out
below. 
The forward-looking statements in this press release are based on certain key
expectations and assumptions made by Manitok, including the operational
parameters specifically set out in this press release and expectations and
assumptions concerning the success of future drilling and development
activities, the performance of existing wells, the performance of new wells,
the successful application of technology, prevailing weather conditions,
commodity prices, royalty regimes and exchange rates and the availability of
capital, labour and services. 
Although Manitok believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance should not
be placed on the forward-looking statements because Manitok 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. Actual results could differ materially from
those currently anticipated due to a number of factors and risks. These
include, but are not limited to, risks associated with the oil and gas industry
in general (e.g., operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserves estimates; the uncertainty
of estimates and projections relating to production, costs and expenses; and
health, safety and environmental risks), uncertainty as to the availability of
labour and services, commodity price and exchange rate fluctuations, unexpected
adverse weather conditions and changes to existing laws and regulations.
Certain of these risks are set out in more detail in Manitok's current
Annual Information Form, which is available on Manitok's SEDAR profile at
www.sedar.com.  
The forward-looking statements regarding Manitok's expected 2014 funds
from operations and net debt are included herein to provide readers with an
understanding of Manitok's anticipated funds from operations and
Manitok's ability to fund its expenditures based on the assumptions
described herein. Readers are cautioned that this information may not be
appropriate for other purposes.  
Forward-looking statements are based on estimates and opinions of management of
Manitok at the time the statements are presented. Manitok may, as considered
necessary in the circumstances, update or revise such forward-looking
statements, whether as a result of new information, future events or otherwise,
but Manitok undertakes no obligation to update or revise any forward-looking
statements, except as required by applicable securities laws. 
Non-GAAP Financial Measures 
This press release contains references to measures used in the oil and natural
gas industry such as "funds from operations" and "net
debt". These measures do not have any standardized meanings prescribed by
generally accepted accounting principles ("GAAP") and therefore,
reported amounts may not be comparable measures reported by other companies
where similar terminology is used. These measures have been described and
presented in this press release in order to provide shareholders and potential
investors with additional information regarding Manitok's liquidity and
its ability to generate funds to finance its operations.  
Funds from operations should not be considered an alternative to, or more
meaningful than, cash provided by operating, investing and financing activities
or net earnings as determined in accordance with GAAP, as an indicator of
Manitok's performance or liquidity. Funds from operations is used by
Manitok to evaluate operating results and Manitok's ability to generate
cash flow to fund capital expenditures and repay indebtedness. Funds from
operations denotes cash flow from operating activities as it appears on the
Corporation's Statement of Cash Flows before decommissioning expenditures
and changes in non-cash operating working capital. Funds from operations is
also derived from net income (loss) plus non-cash items including deferred
income tax expense, depletion and depreciation expense, exploration and
evaluation expense, impairment expense, stock-based compensation expense,
accretion expense, acquisition-related expenses, unrealized gains or losses on
financial instruments and gains or losses on asset divestitures. Manitok uses
net debt as a measure to assess its financial position. Net debt includes
current liabilities less current assets excluding the current portion of the
fair value of financial instruments.  
Barrels of Oil Equivalent 
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. Per boe amounts have been calculated using a
conversion ratio of six thousand cubic feet of natural gas (6 mcf) to one
barrel of oil (1 bbl). This boe conversion ratio of 6 mcf to 1 bbl is based on
an energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. Given that the
value ratio based on the current price of crude oil as compared to natural gas
is significantly different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of value.  
Disclosure of Less Than All Reserves 
Readers are cautioned that the estimates of reserves and future net revenue for
individual properties may not reflect the same confidence level as estimates of
reserves and future net revenue for all properties, due to the effects of
aggregation. 
Neither the 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. 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Manitok Energy Inc.
Massimo M. Geremia
President & Chief Executive Officer
403-984-1751
mass@manitok.com 
INDUSTRY:  Energy and Utilities - Oil and Gas  
SUBJECT:  BFC 
-0-
-0- Feb/27/2014 12:00 GMT
 
 
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