Painted Pony achieves 2016 exit production of more than 240 MMcfe/d (40,000 boe/d)
Painted Pony Petroleum Ltd. (“Painted Pony” or the “Corporation”) (TSX: PPY) is pleased to announce that production volumes, based on field estimates, averaged over 240 MMcfe/d (40,000 boe/d) during the month of December 2016 with liquids making up approximately 9% of total production volumes or more than 3,600 bbls/d. Exiting 2016 with production volumes at these levels was a significant goal for Painted Pony and one which, in conjunction with the commissioning of the AltaGas Townsend Facility (the “Townsend Facility”), marked a significant milestone for the Corporation.
Mr. Pat Ward, President and CEO of Painted Pony said, “The production growth we achieved during 2015 and 2016 was generated solely through drilling on our industry-leading Montney property. Between the fourth quarter of 2013 with production of 9,312 boe/d and our fourth quarter exit production volumes in 2016 of more than 40,000 boe/d, we have organically grown our production by 330%.” Mr. Ward continued by saying, “When Painted Pony first introduced the concept of growing to 240 MMcfe/d or 40,000 boe/d in the third year of our initial five-year plan, we believed it to be a very ambitious but achievable goal. However, when you carefully plan the development of a world class asset, and have a great group of dedicated people, you can accomplish exceptional things.”
PRODUCTION
2016 Production Volumes
Based on field estimates, December 2016 daily production volumes averaged over 240 MMcfe/d (40,000 boe/d) while fourth quarter 2016 daily production volumes averaged approximately 218.7 MMcfe/d (36,455 boe/d). Liquids production during the fourth quarter of 2016 averaged approximately 8% (2,990 bbls/d) of production volumes, based on field estimates. Condensate comprised approximately 50% of liquids volumes with butane making up approximately 30% and propane making up the balance at approximately 20%, all based on field estimates. Based on fourth quarter field estimates and previously reported quarterly production volumes, Painted Pony’s 2016 daily production volumes averaged approximately 138.9 MMcfe/d (23,144 boe/d) consistent with annual production guidance of 138 MMcfe/d (23,000 boe/d).
2017 Forecast Production Volume Growth
Daily production volumes for 2017 are expected to average approximately 288 MMcfe/d (48,000 boe/d), an increase of approximately 110% over 2016 average daily production volumes of approximately 138 MMcfe/d (23,000 boe/d). Liquids production volumes in 2017 are expected to be more than 9% of total production volumes or approximately 4,400 bbls/d.
The 198 MMcf/d capacity Townsend Facility which was commissioned in July 2016, currently processes approximately 150 MMcf/d of Painted Pony’s natural gas. Painted Pony anticipates ramping production volumes to fill the remaining 48 MMcf/d of capacity in August 2017 bringing Painted Pony’s total processed volumes at the Townsend Facility to 198 MMcf/d.
The planned Phase Two 100 MMcf/d expansion to the Townsend Facility is expected to be completed and on-stream in October 2017. Painted Pony anticipates 2017 forecasted exit production volumes to be approximately 408 MMcfe/d (68,000 boe/d), representing exit production growth of 70% when compared to 2016 exit production volumes of over 240 MMcfe/d (40,000 boe/d).
OPERATIONAL UPDATE
Field Activity
During 2016, Painted Pony drilled a total of 36 net wells including 9 net wells in the fourth quarter of 2016. One additional well began drilling in later December and is expected to rig-release in mid-January. Completions during 2016 totaled 38 net wells with 8 net wells completed in the fourth quarter.
Painted Pony currently has three drilling rigs actively drilling with a fourth drilling rig expected to begin drilling by mid-January. The Corporation anticipates drilling 22 net wells and completing 12 net wells with estimated capital spending of $87 million during the first quarter of 2017.
Hedging Update
In recent months, the Corporation has added additional financial hedges to provide further protection from commodity price volatility. Since November 2016, Painted Pony has hedged an additional 56.5 MMcf/d on contracts for 2017 and 2018. The Corporation has hedged a total of 65% of natural gas production during 2017 at an average price of $3.30/Mcf on AECO swaps (51% of hedged volumes) and an average of $2.24/Mcf on Station 2 swaps (49% of hedged volumes).
ABOUT PAINTED PONY
Painted Pony is a publicly-traded natural gas corporation based in Western Canada. The Corporation is primarily focused on the development of natural gas and natural gas liquids from the Montney formation in northeast British Columbia. Painted Pony’s common shares trade on the Toronto Stock Exchange under the symbol “PPY”.