| | | Thu May 20, 2010
Pennant successful at Land Sale
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| | Pennant Energy Inc. (the "Company") (TSX Venture Exchange - PEN") is pleased to announce that, pursuant to our press release of May 13, 2010, the Company and joint venture partner were successful at the Alberta Crown land sale, acquiring the P&NG rights below the Base of the Edmonton Group in a section (640 acres) of land immediately offsetting our successfully drilled and tested well "Drumlin Pearl 7-9-30-16W4". The Company participated as to an undivided 50% interest (320 net acres) in the purchase; the land is ideally situated for additional development drilling opportunities directly offsetting the successfully completed and tested Pearl well.
Based upon the successful production test of the target formation and subsequent flow test report on the Pearl 7-9 well, initial design plans are underway to install production facilities and tie-in the well. Further information regarding the operations will be provided, as the operator makes the information public.
The terms of the Farmin Agreement called for the Company to pay 75% of the costs to drill and complete the Test well and if required, 50% of equipping and tie-in costs. By satisfying the terms of the Agreement, the Company has earned a reversionary working interest of 50% BPO reverting to an APO interest of 25% after recovery of a capital cost multiple equal to 300% of a drilling and completion costs. There are no burdens other than Albert Crown royalties on new gas, which will qualify for the Alberta New Well Incentive Program maximum rate of 5% during the first year of operation or 500 million cubic feet of gas (Mmcf), whichever occurs first. In addition, the Company earned an undivided 25% working interest in all PNG rights to the base of the deepest formation evaluated on the Farmout Lands which covered 1 section, and has the option to participate as to a 50% WI in future land acquisitions, exploration and development within an area of mutual interest (AMI) for a period of 1 year from the effective date of the Agreement.
Thomas Yingling, President of Pennant Energy states "Growth through the drill bit can only be done with additional lands worthy of drilling. With the Company successful in acquiring this additional land package, it has set the stage to continue our growth. I am pleased to announce that during the past year not only has the Company managed to increase production and keep its outstanding shares to 23,432,000 with no debt, but has now managed to increase additional offset drilling opportunities."
The Pearl well not only qualifies for the Alberta New Well Incentive Program, upon application the Company will qualify for the $200-per-meter-drilled, Crown royalty drilling credit.
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.
"Jim Britton"
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. |
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