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Press release from Marketwire

Kallisto Announces Drilling of Two Pembina Wells

Monday, August 13, 2012

Kallisto Announces Drilling of Two Pembina Wells18:30 EDT Monday, August 13, 2012CALGARY, ALBERTA--(Marketwire - Aug. 13, 2012) - Kallisto Energy Corp. (TSX VENTURE:KEC) ("Kallisto" or the "Company") announces that the first two wells of the planned water-flood scheme at Pembina, Alberta have been drilled, cased and are awaiting completion. The horizontal wells, located at 100/12-04-048-03 W5M and 102/13-04-048-03 W5M, are expected to be completed using multi-stage fracture stimulations within the next two weeks. The water-flood scheme is expected to result in the drilling of a total of five horizontal oil wells in section 4-048-03 W5M, four in 2012 and one 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). Three of the seven wells in the section will be converted to water injection wells; the first well in 2012 and the next two wells in 2014/2015. Kallisto's share of the project costs is estimated to be approximately $4.2 million. Following a successful evaluation of the results of the water-flood in section 4, the water-flood project is expected to be expanded to include part or all of the remaining two sections of land in the Pembina project. The development of its Pembina lands has added significant reserve value and cash flow to the Company. Current total gross production from the ten Pembina wells is approximately 380 BOE per day, comprised of 323 bbls of oil per day and 343 mcf of gas per day. Since the beginning of production operations in November 2009, the ten Pembina wells have produced a total of approximately 413,000 BOE, including 355,000 bbls of oil. Kallisto has a 30% working interest in the Pembina project. The independent reserve evaluation completed for the Company as of December 31, 2011 placed the Company's 2P working interest reserves at Pembina at 816,200 BOE with a discounted cash flow (discounted at 10%) of $16 million before tax. This value does not include any potential value 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 InformationThe 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.Barrels of oil equivalent (BOE) are calculated using the conversion factor of 6 Mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl (barrel) 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.FOR FURTHER INFORMATION PLEASE CONTACT: Robyn LoreKallisto Energy Corp.President and Chief Executive Officer(403) 237-9996NEITHER 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.