VANCOUVER, BRITISH COLUMBIA–(April 10, 2012) - Pennant Energy Inc. (TSX VENTURE:PEN) (“Pennant” or the “Company“), is pleased to provide the following update on our Bigstone, highly liquids rich natural gas resource project.
- The well 13-33-060-22W5 has been drilled to total measured depth of 5,336 meters with a 2,590 meter horizontal length;
- Surface production facilities located in Lsd 3-29-060-22W5 and the 1.6 mile, 8 inch pipeline to the Delphi operated gas gathering system tie-in point has been completed;
- Production from our wells is anticipated to commence mid to late April upon completion of certain operations by Delphi at the Lsd 1-19 tie-in point; and
- Fourth Montney extended reach horizontal well location surveyed and anticipated to spud in June, 2012.
Further to our press release of February 2012, and pursuant to the “Cross-Conveyed Pooling and Participation Agreement” (the “Agreement”) covering the pooling of the P&NG, Triassic Montney formation rights held by Pennant and partners in section 28-060-22W5 with those held jointly by Trilogy Energy and TAQA North in the adjacent section 33-060-22W5, the initial extended reach, horizontal Joint Well on the Pooled Lands was spud on March 4 and reached total depth on April 2, 2012. The well 13-33-060-22W5 was drilled from its surface location at 4-28-060-22W5 to a total measured depth of 5,336 meters with a 2,590 meter horizontal length. In accordance with the Agreement, Trilogy will assume the role of Operator during the completion phase of operations. The well is currently being conditioned to run a liner and packer assembly in preparation for conducting a multi-stage (up to a 27 stage) fracture program. Completion operations are scheduled to be underway as soon as possible. Pennant holds an undivided 12.5% pooled interest in the Pooled Lands and participated as to a 12.5% working interest in the drilling of the 13-33-060-22W5 well.
The 13-33-060-22W5 well was drilled through the Montney at excellent penetration rates with strong gas shows. The well is located approximately 0.5 miles directly east and runs parallel to our recently drilled and completed extended reach horizontal well, 15-32-60-22W5 (25%WI). The 15-32-60-22W5 well was also drilled at excellent penetration rates with strong gas shows.
The installation of surface facilities, including 3 phase separators, line heaters, tanks, measurement and monitoring equipment and construction of a 1.6 mile, 8 inch pipeline to tie-in to the Delphi operated gas gathering system has been completed. (Pennant holds a 31.25%WI in the system) The site of the facilities is the same surface location used to drill the 14-29 and 15-32 wells, 03-29-060-22W5 and both will be produced through the facilities. The pipeline will carry gas and liquids from our facilities to the Delphi system tie-in point in Lsd 01-19-060-22W5. Production from our wells will be ready to begin as soon as Delphi completes certain construction and start up operations at the 1-19 tie-in point, anticipated to be mid to late April. The pipeline right of way to tie-in the 13-33-060-22W5 well has been surveyed and laying the line is tentatively planned to begin in June, contingent upon surface access conditions.
Donnybrook has informed Pennant that it has surveyed a number of new drilling locations and is planning to drill the next extended reach horizontal well on one of the locations on the west side of our Bigstone acreage block (25% W.I.) in June, 2012.
Thomas Yingling President of Pennant Energy Inc. stated, “The Company is pleased to announce the successful drilling of out third well and completion of the pipeline. Pennant currently has cash flow from its existing wells in Alberta and Manitoba. This cash flow will increase dramatically once production is on stream from the first two Bigstone wells. If test results warrant it, then our third well will also be tied into our pipeline and will also add to our cash flow significantly.”
To view several pictures of our pipeline being built please visit the company website at : http://www.pennantenergy.com/s/PhotoGallery.asp?ReportID=502838 and/or for further information on any of our projects please feel free to contact the company at 604-689-1799.
ON BEHALF OF THE BOARD OF DIRECTORS OF PENNANT ENERGY INC.
Mr. Thomas Yingling, President
Oil Equivalency Conversion (BOE)
Where amounts are expressed on a barrel of oil equivalent (“BOE”) basis, natural gas volumes have been converted to BOE at a ratio of 6,000 cubic feet of natural gas to one barrel of oil equivalent (6 Mcf = 1 BOE). The conversion ratio is based upon an energy equivalent conversion method, primarily applicable at the burner tip and does not represent value equivalence at the wellhead. BOE values may be misleading, particularly if used in isolation. Furthermore, this News Release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.
FORWARD-LOOKING STATEMENTS Certain information set forth in this news release contains forward-looking statements or information (“forward-looking statements”), including statements regarding the spud of a Bigstone well on the west side of the block, horizontal length, the timing of tie-in of it or any other of the wells, anticipated initial production, drilling plans for the Company’s Bigstone acreage, potential drilling locations, the drilling of additional wells and the construction of a gathering system at Bigstone and projected corporate Q2 2012 production rate. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Pennant’s control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Pennant believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our management’s discussion and analysis, Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Pennant does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Where amounts are expressed on a barrel of oil equivalent (“BOE”) basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per 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. References to oil in this discussion include crude oil and natural gas liquids (“NGLs”). NGLs include condensate, propane, butane and ethane. References to gas in this discussion include natural gas.
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