CALGARY, July 27, 2016 /CNW/ - Painted Pony Petroleum Ltd. ("Painted Pony" or the "Corporation") (TSX: PPY) is pleased to announce that it has entered into an asset exchange agreement, which includes Montney acreage, wells and non-operated facility interests (the "Swap") with a large industry partner (the "Counterparty") on jointly held acreage in the Daiber, Cameron and Blair areas of Painted Pony's northeast BC Montney asset.
As a result of this Swap, Painted Pony's average working interest across its Montney acreage will increase from 75% currently to greater than 86% at closing. All of the land and wells acquired in the transaction will be held by Painted Pony at 100% working interest.
Painted Pony and the Counterparty have agreed to exchange 15.4 net sections (9,856 net acres). The Swap transaction is anticipated to have a neutral impact on Painted Pony's reserves.
Painted Pony will receive three Montney horizontal wells, which will be 100% working interest and will be re-directed to produce at the new AltaGas Townsend Facility. The Counterparty will receive wells that Painted Pony has a 20% working interest in, which produce into a facility owned and operated by the Counterparty. The Counterparty will receive approximately 4 MMcfe/d of production and once the acquired wells have been tied into Painted Pony facilities, Painted Pony will receive 9.4 MMcfe/d of production, a net 5.4 MMcfe/d (900 boe/d) gain.
"This is a great deal for our company", commented Patrick Ward, President and CEO of Painted Pony. "This strategic asset exchange enables Painted Pony to increase the average working interest on our lands while consolidating adjacent acreage offsetting some of Painted Pony's most productive wells. In addition, this Swap allows us to control the pace and direction of our capital program on a new 100% owned and operated core development in the highly productive Daiber area, located immediately adjacent to existing Painted Pony-owned natural gas processing facilities. Drilling and facility capacity expansion on this new block is planned for 2017. Increasing our operatorship and 100% working interest in lands and facilities will simplify and streamline the development of our world-class Montney asset."
The Swap has an effective date of January 1, 2016 and closing is subject to usual closing conditions and regulatory approvals, including approvals required by the Competition Act (Canada).
A map outlining the acreage that will be acquired as a result of this transaction is available in an updated investor presentation located on the Painted Pony website at http://paintedpony.ca.
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.
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.
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. In addition, and without limiting the generality of the foregoing, this press release contains forward-looking information in respect of completion of the Swap, which is subject to a number of conditions to closing and required regulatory approvals, including approvals required by the Competition Act (Canada), and the anticipated benefits to be obtained as a result of the Swap, including a net productive capacity increase and future drilling and capacity expansion. 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.
As actual results could vary from forward-looking information, readers should not place undue reliance on forward-looking information. Forward-looking information is based on assumptions including but not limited to future commodity prices, currency exchange rates, drilling success, production rates, future capital expenditures, future performance and financial conditions and the availability of 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.
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, imprecision of reserve estimates, 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.
Forward-looking information is based on estimates and opinions of management at the time the information is presented. Readers are cautioned that the foregoing lists of factors are not exhaustive. The Corporation is not under any duty to, nor will it, 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