Very, very interesting. Earlier today, Painted Pony Petroleum Ltd. updated investors on operations in recent months, highlighting development of its natural gas assets in the Montney formation of northeastern British Columbia.
In the first half, Painted Pony drilled four (two net) new Montney wells. This month, management estimated production from the junior’s total Montney project area at about 26.5 mmcf or 4,500 bbls of oil equivalent per day.
At the same time, the company has in the past several months experienced several production curtailments on its B.C. gas properties, with the outages averaging roughly 8.4 mmcf per day.
Painted Pony was advised that a third-party gas plant expansion at Blair, B.C., is expected to be operating in mid-August, when the junior’s allocated processing capacity will increase to 32 mmcf per day, with some additional, interruptible capacity. Total plant capability is expected to increase to a range of 65 to 80 mmcf per day, management said.
In the third quarter, the company plans to complete and test five (2.4 net) Montney wells. In the rest of the year, the junior expects to drill up to three (two net) more Montney wells, of which two net wells are expected to be completed and tested in the fourth quarter, subject to equipment availability.
Forecast natural gas liquids (NGL) recovery in the new part of the Blair plant is expected to rise to about 15 to 20 bbls per mmcf. Accordingly, Painted Pony expects to realize an average NGLs recovery of double its current rate at Blair, once the expansion is operational, management said.
A founding member of the B.C. LNG Export Cooperative Group, Painted Pony continues to pursue a strong interest in the project and expects more details to be available in the second half. The B.C. LNG export facility is expected to be operational in 2014.
Management believes Painted Pony’s Montney gas assets in northeastern B.C. are well-situated to deliver gas to west coast LNG projects. The strategic nature of the assets was recently highlighted when a multinational Asian company made a cash takeover bid for a key producer on the Montney gas trend, management said.
“We are encouraged by the keen interest shown by major offshore players in Canada’s natural gas resources, particularly ... assets like those of Painted Pony,” said Patrick Ward, Painted Pony president and chief executive.
Further east, in Saskatchewan, Painted Pony reports success on its Bakken and Mississippian light oil projects. So far in 2012, the company has brought onstream five net new light oil wells, and is completing and tying-in another seven (five net) wells, all expected to be onstream in the next 30 days, management said.
In the rest of 2012, Painted Pony expects to participate in at least seven (three net) wells. In addition, the company expects to begin injecting water on its planned Bakken pressure maintenance scheme at Midale late in the third quarter. The company said it currently has two operated drilling rigs active in Saskatchewan.
At Flat Lake, Saskatchewan, Painted Pony recently completed drilling on a deep, exploratory test targeting several prospective zones in the Mississippian, Devonian and Ordovician formations. The well has been cased to total depth and completion is expected to begin within the next several weeks.
During the first half of 2012, the company expanded its exploration program to include several new light oil projects in Alberta. The junior recently completed and tested its first exploratory well targeting Viking light oil in Alberta’s Wimborne area. The well did not produce commercial volumes of oil, but flowed gas at modest rates. For now, Pointed Pony has no plans to tie in the well.
The junior continues to evaluate other Viking opportunities in central Alberta, including more possible locations at greater Wimborne. The company’s current budget contemplates the drilling of up to two (net) more Viking test wells in this year’s second half.
Painted Pony’s current field-estimated total production is about 5,900 boe per day, weighted 77 per cent gas, the company said. Second-quarter 2012 field-estimated production averaged about 5,700 boe per day, 75 per cent gas.