Great news from Pennant Energy (PEN) and Blackbird Energy (BBI)

In June, I issued a report on the deep Montney play in the Alberta Basin highlighting Pennant (PEN) and Blackbird (BBI). See the report here. The operator, Donnybrook, released test results tonight that exceeded expectations. The share price of PEN and BBI have gone up 100% and 75% respectively over the past week as the news obviously leaked. I would expect additional share price increases barring a collapse in the overall market.

Pennant, Donnybrook's 22W5 well flows at 1,011 boepd

2011-10-19 16:52 ET - News Release

Also News Release (C-DEI) Donnybrook Energy Inc


Mr. Thomas Yingling of Pennant reports

PENNANT TESTS 1,011 BOE per day AT BIGSTONE, MONTNEY HORIZONTAL WELL

Pennant Energy Inc., pursuant to its Sept. 28 press release, has been informed by the operator, Donnybrook Energy Inc. of Calgary, that the Bigstone, Montney formation horizontal well, Donnybrook HZ Bigstone 14-29-60-22W5, has been successfully completed and flow tested. On Oct. 12, a 240-ton, 12-stage continuous fracture treatment along the 1,254-metre lateral leg of the well (horizontal portion) was carried out over a six-hour period. Immediately after, the well was flowed for cleanup and subsequently flow tested for approximately four days and is currently shut-in for built up. The well, after cleanup, produced gas and condensate over the last 24 hours of the test at approximately 4.3 million cubic feet per day and 295 barrels per day of condensate (1,011 barrels of oil equivalent per day).

The 14-29-60-22W5 well has tested at comparable or better rates with a well located approximately five miles to the south which was drilled and completed in a similar manner (1,200-metre lateral with 12-stage frac) and tested rates of (3.5 million cubic feet per day and 225 bpd of condensates, 808 boepd). The operator of that well has offset the initial test with two longer horizontal wells with 2,000- and 2,538-metre laterals at locations about four miles south of (one mile closer to) the Bigstone 14-29 well. The 2,000-metre lateral section tested at rates of 13.1 million cubic feet per day and 655 bpd of condensate (2,840 boepd). The 2,538-metre lateral section tested at 15 million cubic feet per day and 600 to 900 barrels of condensates (3,100 to 3,400 boepd).

The Donnybrook HZ Bigstone 14-29-60-22W5 well confirms the Montney formation at Bigstone is at least comparable or possibly better in reservoir quality with the Montney that has been drilled at Fir four miles to the south. Accordingly, longer 2,000- to 2,600-metre lateral sections at Bigstone should produce a similar increase in results with test rates anticipated to be three to four times higher than the 14-29-60-22W5 well has achieved.

Thomas Yingling, president of Pennant Energy, stated: "The Bigstone well has clearly exceeded our expectations. The Bigstone/Fir Montney area resource development potential has attracted a significant amount of attention in recent months, not only reflected in the current and planned drilling activity in the area, but also in the high land prices paid ($2,500 per hectare) at recent Crown sales. Pennant's 25-per-cent working interest in 1,792 hectares of contiguous lands at Bigstone represents a potential drilling inventory of 13 to 27 development locations depending on the length of the horizontal leg of each well. We are looking forward to developing this exciting project with our partners."

Based on the reported production performance of longer lateral wells to the south at Fir and the quality of the Montney reservoir section encountered at Bigstone, Donnybrook has informed Pennant that it is planning to drill a longer 2,000-metre to 2,200-metre lateral as the next well in the project.