| ||Wed May 27, 2009|
Pennant Announces New JV Drilling Prospect
| ||Pennant Energy Inc. (the "Company") (TSX Venture Exchange -- PEN") is pleased to announce that it has entered into a joint venture with a private Alberta company (JV Partner) to farm-in on the drilling of a gas well test in the Ferrier area of central Alberta. The terms of the JV agreement (the Agreement) calls for the Company to pay 30% of the JV Partner's share of costs to drill, test, complete and tie-in or abandon the well to earn an undivided 25% working interest in the well subject to a non-convertible gross overriding royalty on the farmout interest. The earned interest covers 1 section of land and the option to participate in future exploration and development within an area of mutual interest (AMI) for a period of 1 year from the effective date of the Agreement. Well licensing is currently underway and the well is scheduled to spud in June. 2009. |
The Ferrier well will qualify for the Alberta New Well Incentive Program which provides for a maximum 5% Crown royalty rate during the first year of production. The program is in effect for all new wells drilled and begins production of conventional oil or natural gas between April 1, 2009 and March 31, 2010. In addition, upon application the Company may qualify for the $200-per-meter-drilled Crown royalty credit which may reduce the Alberta Crown royalty on current Company production by up to 50% for a period of up to 1 year.
Badger well update
The Company has started receiving revenue from its joint ventured Badger well. Production from the Company's Badger property, which has been producing since January, 2009 will also benefit from the Crown royalty reduction program. As per the April 7th news release, initial production from the well was approximately 160 BOEPD in total or 40 BOEPD net to the Company. The Company holds a 25% working interest in the well and P&NG rights below the base of the Belly River in the total section. The Company is currently evaluating offset drilling opportunities to this well.
Thomas Yingling, President of Pennant Energy states "I am very pleased to announce the addition of this exciting new drill program. Not only has the Company successfully increased production and revenues with the success at our first Badger well we have been able to identify, evaluate and raise funds to participate in this additional Ferrier drill program slated to commence in June 2009. During these financially difficult times that the world economy has been experiencing many Companies are enduring unfortunate hardships. However, during these financially difficult times opportunities are present. I am pleased to say that Pennant has been able to successfully take advantage of some of these opportunities and we hope to be able to continue to do so. I wish to thank Pennants management team for successfully steering Pennant through these difficult times while maintaining no debt, increasing cash flow, and still keeping our outstanding shares to only 20.6 million.
Both the Ferrier project, soon to be drilled, and the Badger Project, recently tied in and producing, provide potential additional drilling opportunities. The Company is also currently evaluating additional oil and gas projects."
For further information on any of our projects please feel free to contact the company at 604-689-1799 or visit our web site at www.pennantenergy.com
ON BEHALF OF THE BOARD OF DIRECTORS OF
PENNANT ENERGY INC.
Mr. Jim Britton
P. Geol. - Director
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.
BOEs may be misleading, particularily when used in isolation. A BOE conversion ratio of 6Mcf: 1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not present a value equivalency at the wellhead.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
You can view the Next News Releases item: Fri Jun 26, 2009, Pennant Announces Spud of Ferrier Well
You can view the Previous News Releases item: Tue Apr 7, 2009, Pennant flows Badger Well Successfully
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