CALGARY, ALBERTA–(Marketwired – July 25, 2013) – Painted Pony Petroleum Ltd. (“Painted Pony” or the “Company”) (TSX VENTURE:PPY) is pleased to provide the following operations and activity update. The Company’s operating highlights during the second and third quarters of 2013 to-date include:
- finished drilling and completion operations on two 100% working interest Upper Montney horizontal wells situated on the 91-F/94-B-16 pad. One of these wells was completed using a conventional perf-and-plug style system and the other well was completed using an open-hole ball-drop style technique. These two wells are providing vital comparative data concerning the viability of ball-drop completions in the Blair area, following on the Company’s successful ball-drop completions at Townsend. The wells are currently being production tested.
- over 184 hours, the a-A91-F (ball drop well) flowed at a peak 24-hour wellhead rate of 8.6 million cubic feet (“MMcf”) per day (“MMcf/d”) at an average flowing casing pressure of 1,198 psi., and at an average rate of 7.5 MMcf/d at an average flowing casing pressure of 1,406 psi. The final 24-hour rate was 8.1 MMcf/d at an average flowing casing pressure of 1,243 psi. Gas analysis indicates a total liquid content from this zone of 76 barrels (“bbl”)/MMcf (including ethane). On a total barrel of oil equivalent (“boe”) combined basis, this well tested at a 24-hour peak rate of 1,872 boe per day (boe/d”);
- over 82 hours, the a-91-F (perf-and-plug well) flowed at a peak 24-hour wellhead rate of 6.7 MMcf/d at an average flowing casing pressure of 1,299 psi., and at an average rate of 6.2 MMcf/d at an average flowing casing pressure of 1,302 psi. The final 24-hour rate was 5.9 MMcf/d at an average flowing casing pressure of 1,141 psi. Gas analysis indicates a total liquid content from this zone of 75 bbl/MMcf (including ethane). On a total boe/d combined basis, this well tested at a 24-hour peak rate of 1,452 boed;
- commenced drilling operations on two new 100% working interest Montney horizontal wells on the 14-F/94-B-16 pad targeting the Middle Montney and the Lower Montney;
- recently placed on production the first of two 100% working interest wells on the 11-J/94-B-09 pad, which were completed and tested during the first half of 2013 on lands acquired in December 2012. The second well will be placed on production as facility constraints permit. Painted Pony is pleased to report that the Lower Montney producer at a-11-J/94-B-09 produced average wellhead condensate volumes of approximately 11 bbls/MMcf during the month of July to-date, while the Upper Montney well at a-A11-J/94-B-09 produced wellhead condensate volumes of approximately 45 bbls/MMcf during a limited test period. Wellhead condensate represents the free condensate which is recovered at the wellsite and does not include additional condensate or other gas liquids which may be recovered at a gas processing facility;
- commenced completion operations and production testing on 2 (0.4 net) non-operated Montney horizontal wells on the Gundy 75-J/94-B-09 pad, which were drilled in the first quarter of 2013. Test results from these wells are expected later in this quarter.
- continued to implement field reactivation plans for the Cypress area. Production from a 100% working interest vertical Montney well at b-07-F/94-B-15 has now been restored and a further 2 (2.0 net) wells are expected to be reactivated during the third quarter as facility upgrades are completed;
MONTNEY GAS PROJECTS
Painted Pony continues to pursue the development and expansion of its Montney gas assets in northeastern British Columbia. To-date during 2013, the Company has drilled or is currently drilling a total of 8 (5.6 net) Montney horizontal wells. A further 5 (4.0 net) horizontal wells are expected to be drilled during the balance of 2013. This will include 2 (2.0 net) new wells on the liquids-rich project at Townsend.
LIGHT OIL PROJECTS
Painted Pony continues to maintain an inventory of light oil opportunities, focusing on the continuing development of lower-risk projects in southeastern Saskatchewan. To-date during 2013, the Company has participated in the drilling of 3 (1.4 net) wells in Saskatchewan. A further 5 (3.1 net) wells are expected to be drilled during the balance of the year.
Painted Pony’s current field-estimated sales volumes are approximately 8,800 boe/d (82% gas-weighted). Field-estimated average second quarter volumes were approximately 7,800 boe/d (82% gas-weighted). Spring break-up and adverse weather conditions along with scheduled and un-scheduled plant turnarounds in both British Columbia and Saskatchewan affected several of the Company’s key producing properties. In Saskatchewan, the wet weather hampered production volumes as extended road bans restricted trucking of crude oil from the Flat Lake and Ingoldsby properties. Elsewhere in Saskatchewan, the Steelman third party solution gas gathering system, which services the Company’s Huntoon and Midale batteries, has been shut down since mid-May for unscheduled repairs and maintenance. While the Company’s oil production from these batteries remains unaffected, these issues have caused a temporary reduction in the Company’s Saskatchewan sales gas and associated gas liquids volumes. In British Columbia, the wet spring conditions contributed to delays in the completion of the 91-F wells at Blair. Weather-related damage to roads and a bridge in the Cypress area restricted operational access for well maintenance and reactivation projects, and a third party gas facility which processes the Company’s Cypress gas experienced an un-planned outage.
Earlier this year, Painted Pony announced two 100% working interest wells in the Townsend block (please refer to press release dated March 27, 2013). These wells proved to be a challenge to bring on production due to their robust wellhead flow rates and high associated liquids content. Late in the second quarter of 2013 the Company resumed modifications to the facilities used to produce these wells. The Upper Montney well on the Townsend 11-J pad was then produced for a period of 5.2 days during the second quarter of 2013, at which time it flowed at approximately 2,230 boe/d of field-estimated raw gas, including wellhead condensate. This well is expected to remain shut-in until late in 2013 when a new operated gas processing facility comes onstream. The Lower Montney well on the Townsend 11-J pad was also produced for 7.1 days during the quarter and it flowed at approximately 1,819 boe/d of field-estimated raw gas, including wellhead condensate. This well has continued to produce through a third party facility since early July.
For more information please visit www.paintedpony.ca.
This news release contains certain forward-looking information and forward-looking statements (collectively referred to herein as “forward-looking statements”) within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believe”, “plan”, “potential”, “intend”, “objective”, “continuous”, “ongoing”, “encouraging”, “estimate”, “expect”, “may”, “will”, “project”, “should”, or similar words suggesting future outcomes.
These forward-looking statements are based on numerous assumptions including but not limited to (i) drilling success; (ii) production; (iii) future capital expenditures; and (iv) cash flow from operating activities. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect.
Forward-looking statements are based upon the opinions and expectations of management of the Company as at the effective date of such statements and, in some cases, information supplied by third parties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements.
With respect to forward-looking statements contained in this document, Painted Pony has made a number of assumptions. The key assumptions underlying the aforementioned forward-looking statements include assumptions that: (i) commodity prices will be volatile throughout 2013; (ii) capital, undeveloped lands and skilled personnel will continue to be available at the level Painted Pony has enjoyed to date; (iii) Painted Pony will be able to obtain equipment in a timely manner to carry out exploration, development and exploitation activities; (iv) Painted Pony will have sufficient financial resources with which to conduct the capital program; (v) the accuracy of geological and geophysical data and Painted Pony’s interpretation of that data; (vi) production rates in 2013 are expected to show growth from 2012; (vii) production from new wells will be substantially similar to production rates associated with existing wells in the vicinity of the Company’s properties; (viii) the continued ability of the Company to generate internal cash flow and the availability of capital on acceptable terms; and (ix) the current tax and regulatory regime will remain substantially unchanged. Certain or all of the forgoing assumptions may prove to be untrue.
Certain information regarding Painted Pony set forth in this document, including management’s assessment of Painted Pony’s future plans and operations, number, type, timing and location of wells to be drilled and the planning and development of certain prospects, may constitute forward-looking statements under applicable securities laws and necessarily involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Painted Pony’s control, including without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, environmental risks, inability to obtain drilling rigs or other services, capital expenditure costs, including drilling, completion and facility costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and globally, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, and stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof. Readers are cautioned that the foregoing list of factors is not exhaustive. Painted Pony’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. All subsequent and forgoing forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.
Additional information on these and other factors that could affect Painted Pony’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or Painted Pony’s website (www.paintedpony.ca).
The forward-looking statements contained in this document are made as at the date of this news release and Painted Pony does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Certain natural gas volumes have been converted to barrels of oil equivalent (“boe”) on the basis of six thousand cubic feet (“Mcf”) to one barrel (“bbl”). Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 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 the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1bbl, utilizing a conversion ratio at 6 Mcf:1bbl may be misleading as an indication of value.
The well test results disclosed in this news release represent short-term results, which may not necessarily be indicative of long-term well performance or ultimate hydrocarbon recovery therefrom.
Neither 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.
Patrick R. Ward
President & CEO
(403) 238-1487 (FAX)
Painted Pony Petroleum Ltd.
Joan E. Dunne
Vice President, Finance & CFO
(403) 238-1487 (FAX)
Painted Pony Petroleum Ltd.
300, 602 – 12 Ave SW
Calgary, AB T2R 1J3
(403) 238-1487 (FAX)