Pennant Energy Inc.
TSX VENTURE : PEN

Pennant Energy Inc.

February 16, 2012 08:00 ET

Pennant Energy Inc.: Bigstone Montney Development Moving Ahead

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 16, 2012) - Thomas Yingling, President of Pennant Energy Inc. (TSX VENTURE:PEN) is pleased to provide an operations update on its Bigstone Montney high natural gas liquids resource play. Production tubing has been installed in the Donnybrook Energy Bigstone Hz 15-32-60-22 W5M well (25% working interest to Pennant) and a 7 day production test has been completed. The well flowed at an average rate of 1.1 mmcf of gas per day and 153bbls of fluid per day. The fluid was a combination of condensate and load oil from the hydraulic fracture treatment. To date the well has recovered 992 m3 of frac oil from the 1,810 m3 of load oil that was injected during the fracture operation. A review of the 24 stage hydraulic fracture that was performed on the well indicates that only 5 of the 24 stages of the planned fracture programed were successfully stimulated. During the hydraulic fracture operation 460 tons of fracture propant and fluids were placed. A mechanical failure during the first stage of the hydraulic fracture program appears to have prevented up to 16 stages of the Montney formation from being fracture stimulated and 3 stages may have received all of the 360 tonnes of hydraulic fracture stimulation that was to planned for the first 18 stages. During the production testing the well continued to flow back high concentrations of load oil from the fracture stimulation and it is believed that as the well continues to unload frac oil the production rates of natural gas, condensate and NGLs will improve. As a result the well completion rates do not reflect the quality of reservoir the well encountered while drilling. The 15-32 well encountered 2,744 m of high quality Montney reservoir with strong gas shows and excellent penetration rates. The reservoir encountered is comparable to the Montney interval that was successfully completed in 14-29 Bigstone discovery well. The 15-32 well is currently shut in for pressure build up and analysis and will be placed on production with Pennant's first Bigstone Montney well, Donnybrook et al 14-29-60-22w5, which was the 1,200m Hz Bigstone Montney discovery well that tested 4.3mmcf/d and 295 barrels of NGLs (1,011 barrels of oil equivalent per day as soon as the pipeline and production facilities are completed. Construction operations for the pipeline surface facilities are expected to commence in mid-February with all facilities ready for production to start by April 1st.

Donnybrook has informed Pennant the next well to drilled at Bigstone is scheduled to spud within 2 weeks from a surface location at 4-28-60-22w5 and will be an extended reach 2,700m Hz well with a bottom hole location in 13-33-60-22w5.

Pennant's Bigstone Project is comprised licences covering a total of 7 sections or 4,480 acres (1.75 net sections, 1,120 nets acres), in Township 60, ranges 22 and 23W5 at Bigstone, Alberta. Pennant has earned 25 per cent of Donnybrook Energy Inc.'s interest in the Bigstone lands and in any future operations within an area of mutual interest.

Thomas Yingling, President of Pennant Energy Inc., stated, "The mechanical issues we encountered with the 15-32 well are disappointing and have clearly restricted the flow rates from our well. However, we are encouraged by the results of a similar extended reach Hz well directly offsetting and projecting into the center of our land block that reported a final 24 hour test rate after a 4 day flow period of over 2,850 boe/d. We are confident that that well is a more accurate measure of the potential of the Montney on our lands and look forward to drilling and completing our next well which will commence within 2 weeks on this exciting prospect."

To view a brief video detailing the horizontal frac process please visit our web site at www.pennantenergy.com and for further information on any of our projects please feel free to contact the company at 604-689-1799.

ON BEHALF OF THE BOARD OF DIRECTORS OF PENNANT ENERGY INC.

Mr. Thomas Yingling, President

Oil Equivalency Conversion (BOE)

Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to BOE at a ratio of 6,000 cubic feet of natural gas to one barrel of oil equivalent (6 Mcf = 1 BOE). The conversion ratio is based upon an energy equivalent conversion method, primarily applicable at the burner tip and does not represent value equivalence at the wellhead. BOE values may be misleading, particularly if used in isolation. Furthermore, this News Release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.

FORWARD-LOOKING STATEMENTS: Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including statements regarding the spud of the Bigstone 15-32 well and horizontal length, the timing of tie-in, anticipated initial production, drilling plans for the Company's Bigstone acreage, potential drilling locations, the drilling of additional wells and the construction of a gathering system at Bigstone and projected corporate Q2 2012 production rate. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Pennant's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Pennant believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our management's discussion and analysis, Annual Information Form and other documents available at www.sedar.com.

Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Pennant does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids ("NGLs"). NGLs include condensate, propane, butane and ethane. References to gas in this discussion include natural gas.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Neither the 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.

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