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Manitok commits to $106-million work program in Encana lease deal

Doug Suttles of Encana speaks to the media after the company announced him as the new president and CEO in Calgary, Alberta, June 11, 2013.

Todd Korol/Reuters

Manitok Energy Inc. is acquiring additional petroleum and natural gas leases in southeast Alberta from Encana Corp.

The Calgary-based junior energy company says Encana has agreed to a three-year lease covering 38,757 hectares in the Entice area.

Manitok will have a 100-per-cent working interest in the leases, which are contiguous with its core areas.

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It has committed to spend $106-million over the period, including $22-million in 2014.

Manitok also announced Monday that a syndicate of underwriters initially agreed to acquire $20-million worth of flow-through shares from the company, and then increased the bought-deal to $25-million later in the morning.

It said proceeds from the equity sale will be used by Manitok for exploration on its Canadian properties prior to Dec, 31, 2014. The flow-through shares allow investors to receive tax credits for eligible spending by the company.

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