VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 1, 2012) - Thomas Yingling, President of Pennant Energy Inc. (TSX VENTURE:PEN) is pleased to provide an operations update on its Bigstone Montney high natural gas liquids resource play. As of July 29, 2012 the following production rates have been recorded from Pennant's Bigstone prospect.
The Donnybrook et al 14-29-60-22w5 1,200m Hz Bigstone Montney discovery well which tested 4.3mmcf/d and 295 barrels of NGLs (1,011 barrels of oil equivalent per day) from a 1,254m lateral, commenced production on June 18. Over the first 42 days, the 14-29 well averaged 1.61mmcf/d (605 mcf/d PEN W.I.) and 72.8 bbls/d (27.3 bbls/d PEN W.I.) of condensate for a total of 341 BOE/D (128 BOE/D PEN W.I.). Further NGL will be extracted during processing at the shallow cut plant and are estimated to be 30-35 bbls/mmcf of raw gas. Pennant has a 37.5% W.I. in the 14-29 well subject to a 2% GORR, plus a 10% ORR on its W.I. until payout at which time Pennant reverts to a 25% W.I. and 2% GORR.
The second Bigstone well drilled, Donnybrook et al Bigstone Hz 15-32-60-22 W5M (25% working interest to Pennant subject to a 2% GORR), commenced production on July 16 and has been producing natural gas condensate and NGLs that will be extracted during processing, for the past 7 days. The 15-32 well had technical problems during the completion and only 6 stages of the planned 23 stage frac were completed successfully. Despite this setback, the well is currently producing and the initial production rates are encouraging. The well has averaged 1.75 mmcf/d (438 mcf/d PEN W.I.) with 153 bbls/d (38 bbls/d PEN net W.I.) of condensate for a total of 445 BOE ( 111.5 BOE/D PEN net W.I.). The current fluid production includes both load fluids and free condensate, as 100% of the load fluids have not been fully recovered to date.
The third Bigstone well, Donnybrook et al Bigstone Hz 13-33-60-22w5, was drilled to a total measured depth of 5,336m and completed with a 23 stage frac. After initial flow back and clean up, the well is currently waiting on dry weather to install production tubing and final flow testing as well as commence construction and installation of surface facilities. The well will be tied into the Donnybrook et al Bigstone pipeline system as soon as access conditions permit. All operations at 13-33 have encountered delays due to heavy rain which has made access to the lease site difficult. As soon as surface conditions dry out operations at 13-33 will commence. Flow rates on the well are currently not being released by partners until final testing has been completed.
Industry activity in the Bigstone area continues to prove up the potential of Pennant's land holdings to the west. The most recent well to be announced was an extended reach HZ that terminated 195m south of Pennant's 25% W.I. lands in Twp 60-23w5. The operator has reported the well tested an average 16 mmcf/d and approximately 800 bbls of condensate per day at the end of the test. This compares very well to an initial extended reach HZ well by the same operator that offsets Pennant 25% W.I. lands in 60-22w5 for a mile of HZ length and is only 200m west of Pennants lands. The initial well tested 12.5mmcf/d and 770 bbls per day of condensate. These wells continue to demonstrate the excellent reservoir potential of the Montney Formation underlying the western side of Pennants 25% W.I. lands in the Bigstone area. Pennant has a 25% interest in 4 sections 1,024 Ha (256 ha net) in the western portion of its Bigstone prospect that have not been drilled to date. Pennant has an interest in a total of 8 sections (1.875 sections PEN W.I.) of land in the Bigstone area for an overall W.I. of 23.4375%. The next well pennant plans to drill will be to test the western portion of the Bigstone lands.
Based on the results to date, four new Hz Montney drilling locations at Bigstone have been surveyed. The timing of the drilling of these additional wells will be finalized in Q4 2012.
Thomas Yingling, President of Pennant Energy Inc., stated, "The start of production at Bigstone is a significant step and 239.5 BOE/D net to Pennant for the first two wells has a big impact on our daily production. Although the mechanical issues we have encountered with the 15-32 well were disappointing, production from the well to date has been encouraging and we are very excited about the continued success surrounding our lands to the south and west. We look forward to commencing the final testing and tie in of the 13-33 well and further growth from the Bigstone area."
To view a brief video detailing the horizontal frac process please visit our website at www.pennantenergy.com and 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 the Bigstone 15-32 well and horizontal length, the timing of tie-in, 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.
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 news release.