CALGARY, ALBERTA–(Marketwired – Dec. 10, 2013) – Painted Pony Petroleum Ltd. (“Painted Pony” or the “Company”) (TSX:PPY) is pleased to announce its 2014 capital budget and provide a production update. Highlights include:
- an approved 2014 capital expenditure budget of $149 million;
- 92% of the budget will be directed towards the continued development of the Company’s Montney natural gas project in northeast British Columbia, with the remainder to be used for further development of the Company’s oil properties in southeast Saskatchewan and for general corporate expenses;
- the 2014 capital budget incorporates the drilling of 21 (18.6 net) wells, including 18 (17.0 net) horizontal wells targeting the Montney, and 3 (1.6 net) wells directed at light oil projects in Saskatchewan;
- based on field estimates to date, Painted Pony anticipates that sales volumes for the fourth quarter of 2013 will average approximately 9,100 barrels of oil equivalent per day (“boe/d”), weighted 84% towards natural gas, with November & December volumes expected to average approximately 9,800 boe/d, weighted 84% towards natural gas; and
- current shut-in volumes are estimated to total approximately 3,000 boe/d.
2014 CAPITAL BUDGET
Painted Pony’s Board of Directors has approved the Company’s 2014 capital budget of $149 million. This budget also contemplates a facility disposition of approximately $11 million by the end of the second quarter of 2014, for net capital expenditures of $138 million.
Painted Pony intends to drill 18 (17.0 net) horizontal Montney natural gas wells, predominantly on the high working interest Blair and Townsend land blocks. The majority of these wells will be drilled on existing pads and will utilize existing infrastructure as the Company continues to grow its premiere British Columbia Montney assets. During 2014, Painted Pony intends to drill 8 (8.0 net) Montney horizontal wells at Blair, 2 (2.0 net) Montney horizontal wells at West Blair, and 2 (1.0 net) Montney horizontal wells at Daiber. In addition, the Company will build on its highly successful 2013 activities on the liquids-rich Townsend block, by drilling a total of 6 (6.0 net) Montney horizontal wells at the 56-H and 11-J pads.
As a result of the robust liquids yields realized at the Townsend and Daiber areas, Painted Pony is directing capital in 2014 towards facilities infrastructure in order to realize full value from the Company’s development activities. At Townsend, high liquids content (condensate and natural gas liquids) is limiting Painted Pony’s ability to place wells on production. To address this issue, the Company is constructing a 100% working interest, 25 million cubic feet per day (“MMcf/d”) gas dehydration and condensate stabilization facility. This facility is expected to be completed before the end of the first quarter of 2014. In addition, high initial production rates associated with recently completed wells at the 44-C/94-B-16 pad require Painted Pony to expand the previously constructed compression and dehydration facility. The facility has a current capacity of 25 MMcf/d, and will be expanded to 50 MMcf/d in the second quarter of 2014.
Painted Pony is also pleased to announce that it anticipates sales volumes for the fourth quarter of 2013 to average approximately 9,100 boe/d, weighted approximately 84% to natural gas. Field estimated sales volumes for the months of November and December are expected to average 9,800 boe/d, weighted approximately 84% towards natural gas. At present, Painted Pony is experiencing significant shut-in volumes in the Townsend and Daiber areas due to infrastructure constraints. The Company estimates that these shut-in volumes total approximately 3,000 boe/d, and will come on-stream in the first half 2014 as facilities construction is completed.
Painted Pony is a Canadian oil and natural gas exploration company that trades on the Toronto Stock Exchange under the symbol “PPY”.
For more information please visit www.paintedpony.ca.
Special Note Regarding Forward-Looking Statements
This news release contains industry benchmarks and terms, such as working capital (calculated as current assets less current liabilities), funds flow from operations (calculated by adding to cash flows from operating activities the changes in non-cash working capital and decommissioning expenditures) and field operating netbacks (calculated on a per unit basis as oil, gas and natural gas liquids revenues less royalties and transportation and operating costs), which are not recognized measures under IFRS. These measures are commonly utilized in the oil and gas industry and are considered informative for management and stakeholders. Painted Pony’s method of calculating field operating netbacks may not be comparable to that used by other companies. Field operating netbacks should not be viewed as an alternative to cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. Per unit field operating netbacks reflect revenues less royalties, transportation and operating costs divided by production for the period.
This news release contains certain forward-looking statements and forward-looking information (collectively “forward-looking statements”), which are based on numerous assumptions including but not limited to: (i) drilling success; (ii) production; (iii) future capital expenditures; (iv) cash flowsfrom