Pennant Energy Inc.
TSX VENTURE : PEN

Pennant Energy Inc.

January 27, 2012 07:00 ET

Pennant Working on Tie In of 1st Two Wells and Preparing to Drill 3rd Well At Bigstone

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 27, 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. The Donnybrook Energy Bigstone Hz 15-32-60-22 W5M well (25% working interest to Pennant) 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 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 NGL's (1,011 barrels of oil equivalent per day). The reservoir quality encountered while drilling the 15-32 well proves the play and reservoir quality of the Montney at Bigstone extends at least as far north as the northern boundary of Pennant's 1,792 ha 7 section (448 ha 1.75 section net) contiguous land interests.

The 15-32 well is currently flowing natural gas, natural gas liquids and hydraulic fracture fluids undergoing clean up operations after completion of the 23 stage hydraulic fracture operation. During the hydraulic fracture operation 460 tons of fracture propant and fluids were placed. However, mechanical complications were encountered that have limited the number of stages that the operator can definitively say was successful. The final 5 stages were clearly successfully completed with 120 tons of propant and fracture fluids placed. At this time the operator is preparing to put production tubing in place and continue to flow the well. The flow rates for the 15-32 well will be released once the well has had further time to clean up and the rates are stabilized.

An industry competitor has drilled a 2,760m extended reach Hz well offsetting Pennant's lands 800m to the west and parallel to Pennant's 14-29 well. This well terminated 200m south of Pennant's Section 31 and 200m west of the NW corner of section 29. The operator of the well reported a final 24 hour test rate after a 4 day flow period of 12.5mmcf/d with 770 barrels of condensate per day and expects to yield a further 30-35 bbls per mmcf of natural gas liquids that will be recovered from a shallow cut processing facility. This well is a strong indication of the productivity of the Montney reservoir at Bigstone and indicates the reservoir continues to the west and northwest onto Pennant interest lands.

Donnybrook has informed Pennant that surveys have been completed and contracts are in place to construct a 1.5 mile pipeline to tie in the 14-29 and 15-32 wells. Both wells were drilled from the same surface location and will be tied into the pipeline and shared surface facilities. Field construction operations for the pipeline are expected to commence in mid-February with all facilities ready for production to start by April 1st.

Donnybrook is currently waiting on surface approval to commence construction of 2 drilling pads that will facilitate the drilling of up to 6 more wells. Surveys have been completed for 5 of these development locations. Construction of the first surface lease is expected to be complete by mid-February and Donnybrook has informed Pennant they have located a rig suitable to commence drilling the next well as soon as the third week in February. Donnybrook anticipates this well will be drilled from a surface location at 4-28-60-22w5.

Thomas Yingling, President of Pennant Energy Inc. stated, "Although the mechanical issues we have encountered with the 15-32 well have raised some technical issues, Pennant is excited about the quality of reservoir the 15-32 well has encountered and looks forward to receiving results from the production test and placing the well on production. We are continuing to move ahead in the field with operations to tie in both the 15-32 and 14-29 wells, and are preparing to drill a third well 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.

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