CALGARY, April 17, 2018 /CNW/ - Painted Pony Energy Ltd. ("Painted Pony" or the "Corporation") (TSX: PONY) is pleased to announce significant discovery test results for the first Montney horizontal well drilled on the Beg block (the "Well"). This production test provided early flow data and liquids yields, and increases Painted Pony's confidence in the potential of this block.
Beg Well Test Results
Painted Pony drilled an upper Montney horizontal test well to a vertical depth of 1,800 meters and a lateral length of 2,267 meters. During the final 8 hours of the 6.6 day test period, the Well averaged an estimated rate over 2,000 boe/d including 10 MMcf/d of natural gas and an estimated 360 bbls/d of liquids (60% condensate and 40% NGLs) based on well head condensate plus calculated gas plant liquids recoveries from gas analysis. The flowing pressure of the Well at the conclusion of the test period was 1,625 psi through a 5/8 inch choke. At the conclusion of the test period, Painted Pony had recovered approximately 25% of the total load water used during the completion of the Well. During this 8 hour test period, the Well was still flowing approximately 1,750 bbls/d of load water. Management believes the Well was still cleaning up at the conclusion of the test period. The initial cleanup and flow test was conducted within the limit of environmental flaring regulations and produced results significantly above management expectations.
The Well flowed with the final 24 hour rate averaging an estimated rate of over 1,900 boe/d including 9.5 MMcf/d of natural gas and an estimated 340 bbls/d of liquids, (60% condensate and 40% NGLs) based on well head condensate plus calculated gas plant liquids recoveries from gas analysis. Trace amounts of H2S were detected.
Although test data is preliminary, the estimated liquids to gas ratio is approximately 35 to 40 bbls/MMcf. The Well is not currently pipeline connected. Additional development is currently being reviewed and the timing of additional drilling and production scheduling will be considered along with our other development options. Production from the Well could be processed at the existing AltaGas Townsend facility through a future pipeline connecting Beg to the existing Blair and Townsend blocks.
Painted Pony's Beg block is comprised of 36 net sections of Montney rights and is located on the northeast block of the Corporation's Montney acreage in northeast British Columbia. The Beg block is approximately 12 kilometers northeast of the Corporation's development activity on the Blair block. Based on the positive results of the Well and offset industry production, management anticipates all 36 sections to be prospective for Montney development.
First Quarter 2018 Release
Painted Pony expects to release first quarter 2018 operational and financial results after close of markets on Thursday, May 3, 2018.
Boe Conversions: Barrel of oil equivalent ("boe") amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas to one barrel of oil (1 bbl). Boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf to 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 oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Mcfe Conversions: Thousands of cubic feet of gas equivalent ("Mcfe") amounts have been calculated by using the conversion ratio of one barrel of oil (1 bbl) to six thousand cubic feet (6 Mcf) of natural gas. Mcfe amounts may be misleading, particularly if used in isolation. A conversion ratio of 1 bbl to 6 Mcf 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 natural gas as compared to oil is significantly different from the energy equivalent of 1:6, utilizing a conversion on a 1:6 basis may be misleading as an indication of value.
Forward-Looking Information: This press release contains certain forward-looking information within the meaning of Canadian securities laws. Forward-looking information relates to future events or future performance and is based upon the Corporation's current internal expectations, estimates, projections, assumptions and beliefs. All information other than historical fact is forward-looking information. Words such as "plan", "expect", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words that indicate events or conditions may occur are intended to identify forward-looking information.
Forward-looking information is based on certain expectations and assumptions including but not limited to future commodity prices, currency exchange rates, interest rates, royalty rates and tax rates; the state of the economy and the exploration and production business; the economic and political environment in which the Corporation operates; the regulatory framework; anticipated timing and results of capital expenditures; the sufficiency of budgeted capital expenditures to carry out planned operations; availability of the AltaGas Townsend Facility; operating, transportation, marketing and general and administrative costs; drilling success, production rates, future capital expenditures and the availability of financing, labor and services.
Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, intentions or expectations on which they are based will occur. Although the Corporation's management believes that the expectations in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated.
Forward-looking information necessarily involves both known and unknown risks associated with oil and gas exploration, production, transportation and marketing. There are risks associated with the uncertainty of geological and technical data, operational risks, risks associated with drilling and completions, environmental risks, risks of the change in government regulation of the oil and gas industry, risks associated with competition from others for scarce resources and risks associated with general economic conditions affecting the Corporation's ability to access sufficient capital. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other risk factors that could affect operational or financial results are included in the Corporation's most recent Annual Information Form and in other reports filed with Canadian securities regulatory authorities. These filings are accessible through the SEDAR website (www.sedar.com).
Forward-looking information is based on estimates and opinions of management at the time the information is presented. The Corporation is not under any duty to update the forward-looking information after the date of this press release to revise such information to actual results or to changes in the Corporation's plans or expectations, except as required by applicable securities laws.
ABOUT PAINTED PONY
Painted Pony is a publicly-traded natural gas company based in Western Canada. The Corporation is primarily focused on the development of natural gas and natural gas liquids from the Montney formation in northeast British Columbia. Painted Pony's common shares trade on the TSX under the symbol "PONY".
SOURCE Painted Pony Energy Ltd.
For further information: Patrick R. Ward, President and Chief Executive Officer, (403) 475-0440; Stuart W. Jaggard, Chief Financial Officer, (403) 475-0440; Jason W. Fleury, Director, Investor Relations, (403) 776-3261; [email protected], www.paintedpony.ca