Painted Pony Petroleum Ltd.

Painted Pony Petroleum Ltd.

May 25, 2011 16:58 ET

Painted Pony Petroleum Announces Successful Montney Wells and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - May 25, 2011) - Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX VENTURE:PPY.A) (TSX VENTURE:PPY.B) is pleased to provide further information on its Montney drilling program and an operational update.


The Company's capital program on the operated Blair/Town block in northeastern British Columbia continues to focus on proving up the high deliverability potential of the upper, middle and lower Montney zones using multi-frac horizontal well technology. Painted Pony has completed five (2.3 net) Montney wells on this project during the first five months of 2011. Initial gas rates have exceeded expectations.

At the Blair d-5-K/94-B-16 location, the Company drilled and completed its first three-well production pad, with each horizontal well targeting one of the Montney horizons. The upper Montney produced at 6.4 mmcf/d at 760 psi after ten days; the middle Montney produced at 5.8 mmcf/d at 1,100 psi after ten days and the lower Montney produced at 7.7 mmcf/d at 1,100 psi after five days. The middle Montney wellbore at d-5-K is located more than 15 miles north of the nearest middle Montney horizontal producer and represents the first horizontal completion in this zone on the Blair/Town block. All three wells were completed during spring break-up, and tied into existing infrastructure, after a brief clean-up phase. Painted Pony holds a 50% working interest in these wells.

In addition to the d-5-K pad, two more Montney wells have been brought on stream during May 2011. The d-8-F/94-B-16 vertical well (50% working interest) commenced production at 2.9 mmcf/d and the d-40-F/94-B16 lower Montney horizontal (30% working interest) began production at 4.5 mmcf/d after re-completion.

The Company has continued to refine its operational drilling and completion techniques on the Blair/Cameron project. The most recent wells were drilled in an average of 19 days, as compared to approximately 30 days for earlier wells. These efficiencies have reduced estimated drilling costs by up to $1 million gross per well.


Painted Pony continues to acquire additional lands to complement existing assets in each of its core operating regions. Accordingly, the Company currently holds 132 net sections (84,000 net acres) in Saskatchewan and 203 net sections (130,000 net acres) in British Columbia, including 124 net sections (79,000 net acres) of Montney rights. Year-to-date, the Company has drilled 9 (6.6 net) wells in Saskatchewan and 5 (2.7 net) wells in British Columbia.

Saskatchewan operations and production volumes have been negatively impacted during the second quarter of 2011 due to an unusually wet and extended spring break-up. Approximately 15% of the Company's oil production has been temporarily shut-in due to road bans and flooding. Field operations have also been delayed, however normal activity is expected to resume in June 2011.

Painted Pony's production has grown to approximately 4,000 boe/d during the first quarter of 2011 (50% oil and liquids), compared to 3,443 boe/d in the fourth quarter of 2010, an increase of 16%. During June 2011, the Company expects approximately 650 boe/d of gas production from the Cameron/Kobes area to be temporarily shut-in for 21 days for the scheduled McMahon gas processing plant turn-around.


Painted Pony announces James French has been appointed to the role of Vice President, Production Operations (previously Vice President, Engineering), and Michael Belenkie has been appointed to the role of Vice President, Corporate Development and Reservoir Engineering (previously Vice President, Corporate Development). We congratulate Messrs. French and Belenkie on their new roles as the Company prepares to enter a new stage of growth.


Painted Pony will be undertaking a series of presentations to interested parties over the next several weeks in cities in Canada and the United States. Interested parties are invited to visit the Company's website to view an updated presentation dated May 25, 2011. For more information please visit


BOEs 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.

Special Note Regarding Forward-Looking Information

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. 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 2011; (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) the results of wells drilled by Painted Pony to date on its properties and production from those wells, the results of wells drilled by third parties in the vicinity of the Company's properties; (vii) that 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; (ix) the current tax and regulatory regime will remain substantially unchanged; and (x) the time required to complete the McMahon gas processing plant turn-around. 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 and timing of wells to be drilled, the planning and development of certain prospects, production estimates, treatment under governmental regulatory regimes and expected production growth 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, weather conditions (including access to well sites and leases), 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 overseas, 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, including the amount of proceeds, that the Company will derive therefrom. All subsequent 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 ( or Painted Pony's website (

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.

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.

Contact Information

  • Painted Pony Petroleum Ltd.
    Patrick R. Ward
    President & CEO
    (403) 475-0440
    (403) 238-1487 (FAX)

    Painted Pony Petroleum Ltd.
    Joan E. Dunne
    Vice President, Finance & CFO
    (403) 475-0440
    (403) 238-1487 (FAX)

    Painted Pony Petroleum Ltd.
    300, 602 - 12 Ave SW
    Calgary, AB T2R 1J3