Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX:PPY) is pleased to announce its 2014 capital budget and provide a production update.
2014 CAPITAL BUDGET
Painted Pony's Board of Directors has approved the Company's 2014 capital budget of $149 million. This budget also contemplates a facility disposition of approximately $11 million by the end of the second quarter of 2014, for net capital expenditures of $138 million.
Painted Pony intends to drill 18 (17.0 net) horizontal Montney natural gas wells, predominantly on the high working interest Blair and Townsend land blocks. The majority of these wells will be drilled on existing pads and will utilize existing infrastructure as the Company continues to grow its premiere British Columbia Montney assets. During 2014, Painted Pony intends to drill 8 (8.0 net) Montney horizontal wells at Blair, 2 (2.0 net) Montney horizontal wells at West Blair, and 2 (1.0 net) Montney horizontal wells at Daiber. In addition, the Company will build on its highly successful 2013 activities on the liquids-rich Townsend block, by drilling a total of 6 (6.0 net) Montney horizontal wells at the 56-H and 11-J pads.
As a result of the robust liquids yields realized at the Townsend and Daiber areas, Painted Pony is directing capital in 2014 towards facilities infrastructure in order to realize full value from the Company's development activities. At Townsend, high liquids content (condensate and natural gas liquids) is limiting Painted Pony's ability to place wells on production. To address this issue, the Company is constructing a 100% working interest, 25 million cubic feet per day ("MMcf/d") gas dehydration and condensate stabilization facility. This facility is expected to be completed before the end of the first quarter of 2014. In addition, high initial production rates associated with recently completed wells at the 44-C/94-B-16 pad require Painted Pony to expand the previously constructed compression and dehydration facility. The facility has a current capacity of 25 MMcf/d, and will be expanded to 50 MMcf/d in the second quarter of 2014.
PRODUCTION
Painted Pony is also pleased to announce that it anticipates sales volumes for the fourth quarter of 2013 to average approximately 9,100 boe/d, weighted approximately 84% to natural gas. Field estimated sales volumes for the months of November and December are expected to average 9,800 boe/d, weighted approximately 84% towards natural gas. At present, Painted Pony is experiencing significant shut-in volumes in the Townsend and Daiber areas due to infrastructure constraints. The Company estimates that these shut-in volumes total approximately 3,000 boe/d, and will come on-stream in the first half 2014 as facilities construction is completed.
