NEWS - Pennant Energy, partner buy 640 acres by wePennant Energy, partner buy 640 acres by wells
Ticker Symbol: C:PEN
Pennant Energy, partner buy 640 acres by wells
Pennant Energy Inc (C:PEN)
Shares Issued 20,601,474
Last Close 5/19/2010
.22
Thursday May 20 2010 - News Release
Mr. Thomas Yingling reports
PENNANT SUCCESSFUL AT LAND SALE
Pennant Energy Inc. and its joint venture partner, pursuant to Pennant's Stockwatch press release of May 13, 2010, have completed 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.
2010 Canjex Publishing Ltd.