Painted Pony's Montney exploration well at West Blair (Daiber) a-80-E/94-B-16 has completed initial production testing of potential gas pay in the upper, middle and lower Montney zones. This well was fracture stimulated across 11 stages, including single stages in the upper and middle Montney zones, plus nine stages in the lower Montney horizontal section. The well flowed intermittently over a month for a total of approximately ten flowing days. The last 36 hour test of all three zones had a peak 24 hour wellhead rate of 5.5 MMcf/d at an average flowing casing pressure of 911 psi. The combined average wellhead flow rate for the total 36 hour test was 4.7 MMcf/d at an average flowing casing pressure of 758 psi. A subsequent spinner survey indicated that the upper Montney interval was contributing 47% of the combined wellhead flow. Painted Pony believes that the upper Montney zone represents the preferred target horizon in this area. A further 2 (2.0 net) upper Montney horizontal wells are planned to be drilled on the 80-E pad in 2013, and placed on production early in 2014.
LIGHT OIL PROJECTS
Painted Pony continues to maintain its inventory of light oil opportunities, focusing on projects in Saskatchewan and Alberta. In the fourth quarter of 2012, the Company drilled 6 (5.2 net) wells targeting light oil. In its southeast Saskatchewan core area, the Company continues to explore for and develop various assets targeting the Bakken light oil resource play. In the fourth quarter of 2012, 4 (3.2 net) wells were drilled in Saskatchewan and have all been placed on production. In the first quarter of 2013, Painted Pony expects to participate in the drilling of 3 (1.4 net) wells in Saskatchewan, including 2 (0.6 net) wells on the Flat Lake Bakken project.
Painted Pony currently has no net debt and has an undrawn $100 million demand revolving credit facility with a Canadian chartered bank, which is subject to a review by the lender on or before June 1, 2013.
The Company continues to pursue the development and expansion of its Montney gas assets in northeastern British Columbia. In 2013, the Company expects to complete drilling operations on a total of 12 (9.4 net) Montney wells. This proposed program is expected to include activity on the Company's Blair, West Blair, Cameron, and Cypress projects, including at least 3 (2.8 net) wells on the recently acquired Townsend (Kobes) project. A completion is also planned to test the Buckinghorse formation in the greater Blair area.
Painted Pony was not selected as the supplier of natural gas to the Douglas Channel BC LNG initial project; however, as a founding member of the co-operative, Painted Pony is entitled to bid for supply on any future expansion. In general, the prospects for construction of LNG (Liquefied Natural Gas) facilities on Canada's west coast continue to gain momentum. Painted Pony's Montney gas project is well-positioned to become an important supplier to these export terminals.
An updated presentation incorporating the Company's latest activity plans for 2013 will be available on the Company's website in the next day.
For more information please visit www.paintedpony.ca.
This news release contains certain forward-looking information (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.
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