CIOC announces successful Duvernay test at Simonette, Alberta and provides reserves update

/NOT FOR DISSEMINATION IN THE UNITED STATES - FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW/

CALGARY, Nov. 17, 2014 /CNW/ - Canadian International Oil Corp. ("CIOC" or the "Company") is pleased to provide an operational update on the Company's Duvernay activity as well as a significant increase in reserves as a result of continued success in the liquids-rich Montney play.

• Peak 24-hour production rate of 1,528 Boe/d from the 13-01 Duvernay horizontal pilot well comprised of 1,446 bbls/d of oil and 494 Mcf/d of gas
• Establishing regional play continuity with the drilling of an additional six Duvernay vertical test wells
• Increased proved plus probable reserves ("2P") by 125% to 57.1 MMBoe and total proved reserves ("1P") by 136% to 36.7 MMBoe, as of September 30, 2014
• Before tax net present value discounted at 10% of 2P reserves increased by 142% to $744mm

CIOC has commenced a Duvernay drilling and pilot program in the Simonette, West Ante Creek and Karr areas as the Company continues to progressively de-risk its extensive land base with the drilling of vertical strat / core wells and a horizontal pilot.   

CIOC's land base in the Duvernay fairway is proving to be highly prospective as the majority of the Company's acreage lies within the high pressure condensate window with strong net to gross ratios.

Scott Sobie, President & CEO stated, "We are extremely pleased that our first horizontal Duvernay Pilot well has proved our technical assumptions on the viability of the liquids-rich Duvernay fairway moving West of the Kaybob area.  The result provides us with an additional contiguous development horizon over a significant acreage base that complements the robust Montney development potential on our lands."

CIOC's Simonette 13-01 well (13-01-64-26W5) encountered an over pressured Duvernay pay zone
(>19 Kpa/m gradient) within the mature oil window.  The well was successfully stimulated along 1,182 meters of horizontal lateral.

13-01 had a peak 24-hour average rate of 1,528 Boe/d consisting of 1,446 bbl/d of 42 degree API crude oil and 494 Mcf/d of natural gas at a restricted flowing pressure of approximately 3900 psia (27 MPa).  The well has recently been tied-in and is currently on production and will continue to be produced at a restricted oil rate for reservoir management purposes.  During the last seven days of production, the well averaged a restricted rate of 912 Boe/d consisting of 828 bbl/d of oil and 506 Mcf/d of natural gas.

The Company is very encouraged with this test given that the completed interval was only 1182m and future development wells are anticipated to have over 1500 m of stimulated lateral.

Duvernay Land Update

The Company expects to exit 2014 with over 199,000 net Duvernay acres (100% working interest) and 224,000 net Montney acres.

Reserves Update

CIOC's reserves were evaluated by independent reserves evaluator McDaniel & Associates Consultants Ltd. ("McDaniel") with an effective date of September 30, 2014 and a preparation date of
November 5, 2014. The evaluation was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

As of the effective date of September 30, 2014, McDaniel recognized Total Proved Reserves of 36.7 MMboe (31 MMboe net of royalties) and 57.1 MMboe gross (45.9 MMboe net of royalties) of Total Proved Plus Probable Reserves, up 136% and 125%, respectively, from the December 31, 2013 reserves evaluation which was also performed by McDaniel.

The corresponding before tax net present values discounted at ten percent are $400.1mm for Total Proved Reserves and $743.9mm for Total Proved Plus Probable Reserves, up 163% and 142%, respectively, from the December 31, 2013 reserves evaluation. 

About CIOC

CIOC is a private oil and gas operator with its corporate headquarters in Calgary, Alberta and operations in the Alberta Deep Basin where it is developing multi-zone, liquids-rich oil and gas plays.

This press release is not an offer of securities for sale in the United States. The securities of the Company may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from such registration.  The Company has not registered and will not register its securities under the U.S. Securities Act of 1933, as amended.  The Company does not intend to engage in a public offering of securities in the United States.

Forward Looking Statements

Certain statements contained in this press release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation, including, but not limited to, management's assessment of future plans, operations and strategies, including the focus of the Company's operations, proposed work programs and drilling plans, the Montney development potential on CIOC's lands, the anticipated depth of stimulated lateral on the Company's future development wells, the Company's anticipated holdings of Duvernay and Montney lands at the end of 2014, and other matters related to the foregoing. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance or may be identified by reference to a future date.  Statements relating to "reserves" are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future.  The recovery and reserve estimates of CIOC's reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.

With respect to forward-looking statements contained in this press release, the Company has made assumptions regarding, among other things: availability of future acquisition opportunities; future capital expenditure levels; future oil and natural gas prices; future oil and natural gas production levels; future exchange rates and interest rates; ability to obtain equipment and services in a timely manner to carry out development activities; ability to market oil and natural gas successfully to current and new customers; the impact of increasing competition; the ability to obtain financing on acceptable terms; the general stability of the economic and political environments in which the Company operates; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; that the Company will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that the Company's conduct and results of operations will be consistent with its expectations; that the Company will have the ability to develop its oil and gas properties in the manner currently contemplated; the estimates of the Company's reserves and contingent resource volumes and the assumptions related thereto (including commodity prices and development costs) are accurate in all material respects; and that the Company will have the ability to add production and reserves through development and exploitation activities. Although the Company believes that the expectations reflected in the forward-looking statements contained in this press release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not exhaustive of all assumptions which have been considered.

Readers are cautioned not to place undue reliance on forward-looking statements included in this press release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the Company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the ability of management to execute its business plan; general economic and business conditions; the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; risks and uncertainties involving geology of oil and natural gas deposits; the Company's ability to enter into or renew leases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including decline rates), costs and expenses; fluctuations in oil and natural gas prices, foreign currency exchange rates and interest rates; health, safety and environmental risks; risks associated with unexpected potential future law suits and regulatory actions against the Company; and uncertainties as to the availability and cost of financing. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.

The forward-looking statements contained in this press release speak only as of the date of this press release. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Other Information

All dollar amounts stated herein are expressed in Canadian dollars.

"Boes" may be misleading, particularly if used in isolation. A Boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 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.

References in this press release to initial production test rates, initial "flow" rates and "peak" rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for CIOC. CIOC has not conducted a pressure transient analysis or well-test interpretation on the wells referenced in this press release. As such, all data should be considered to be preliminary until such analysis or interpretation has been done.

Estimates of the net present value of the future net revenue from CIOC's reserves do not represent the fair market value of CIOC's reserves. The estimates of reserves and future net revenue from individual properties or wells may not reflect the same confidence level as estimates of reserves and future net revenue for all properties and wells, due to the effects of aggregation.

The following abbreviations used in this press release have the meanings set forth below:

Mcf	thousand cubic feet
Mcf/d	thousand cubic feet per day
MMboe	million barrel or barrels of oil equivalent
Boe	barrel or barrels of oil equivalent
Boe/d	barrels of oil equivalent per day
bbl	barrel
bbls/d	barrels per day
MPa	megapascal
psia	pounds per square inch absolute

"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. "Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

SOURCE: Canadian International Oil Corp.

Scott W. Sobie, President and Chief Executive Officer, Phone: [phone], Facsimile: (403)-930-0569, Email: [email protected]