CALGARY, July 19, 2016 /CNW/ - Painted Pony Petroleum Ltd. ("Painted Pony" or the "Corporation") (TSX: PPY) is pleased to provide an update on the commissioning by AltaGas Ltd. ("AltaGas") of the Townsend Facility ("the Facility"). The Facility is a 198 MMcf/d natural gas and liquids processing facility located in the Townsend portion of Painted Pony's Montney assets in northern BC.
The Facility began producing natural gas sales volumes on July 7, 2016 with commercial operations beginning on July 10, 2016, more than 30 days ahead of Painted Pony's schedule. The early commissioning of the Facility has provided Painted Pony the opportunity to accelerate production volume growth in the second half of 2016. Painted Pony expects raw natural gas production volumes through the Facility to average approximately 50 MMcf/d during August 2016; 100 MMcf/d during September 2016; and 150 MMcf/d during October 2016. Painted Pony continues to anticipate a 2016 year-end exit production rate of 240 MMcfe/d (40,000 boe/d).
Based on design, the expected efficiency of the Facility is anticipated to improve natural gas liquids ("NGL") yields from Blair Creek in addition to allowing for higher production volumes from the liquids-rich Townsend area. As a result, NGL volumes are expected to increase from approximately 5% of total production volumes currently to approximately 10% of total production volumes in the fourth quarter of 2016. This will result in a 2016 year-end exit NGL production rate of approximately 4,000 bbls/d from current rates of approximately 1,000 bbls/d. Painted Pony expects the increased NGL production to be comprised of approximately 50% condensate with the remaining volumes to be split evenly between propane and butane.
Painted Pony is pleased that the capital cost of the Facility continues to trend below budget as a lower final cost will reduce the capital lease fee amount paid by the Corporation on the Facility.
Painted Pony expects to release second quarter 2016 financial and operating results after market-close on Wednesday, August 10, 2016.
Currency: All amounts referred to in this press release are stated in Canadian dollars unless otherwise specified.
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. In particular, this press release contains forward looking information relating to: the expectation that Painted Pony will have the opportunity to accelerate production volume growth in the second half of 2016; average production volumes processed at the AltaGas Townsend Facility for the months of August, September and October 2016; 2016 year-end exit production rate; that the design of AltaGas Townsend Facility will result in improved natural gas liquids yields; 2016 year-end exit natural gas liquids production rates; the anticipated split of natural gas liquids between condensate, propane and butane; an expectation that the cost of AltaGas Townsend Facility will be under budget and that this will reduce the capital lease fee of the AltaGas Townsend Facility payable by Painted Pony.
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; anticipate timing and results of capital expenditures; the sufficiency of budgeted capital expenditures to carry out planned operations; operating, transportation, marketing and general and administrative costs; drilling success, production rates, future capital expenditures and the availability of labor and services. With respect to future wells, a key assumption is the validity of geological and technical interpretations performed by the Corporation's technical staff, which indicate that commercially economic volumes can be recovered from the Corporation's lands. Estimates as to average annual and exit production assume that no material unexpected outages occur in the infrastructure the Corporation relies upon to produce its wells, that existing wells continue to meet production expectations and that future wells scheduled to come on production in 2016 meet timing and production rate expectations.
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. 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.
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.
Any "financial outlook" contained in this press release, as such term is defined by applicable securities laws, is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
ABOUT PAINTED PONY
Painted Pony is a publicly-traded natural gas Corporation 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 Toronto Stock Exchange under the symbol "PPY".
SOURCE Painted Pony Petroleum Ltd.
For further information: Patrick R. Ward, President and CEO, (403) 475-0440; John H. Van de Pol, Senior Vice President and CFO, (403) 475-0440; Jason Fleury, Director, Investor Relations, (403) 776-3261, [email protected], www.paintedpony.ca