Painted Pony Petroleum expanded its exposure to the Bakken light oil play by executing an additional farm-in agreement allowing access to 3,280 gross (2,904 net) acres in the Midale area. Under the terms of the agreement, Painted Pony and its partner will pay 100% to earn 66.6% in the lands. Painted Pony will operate and have a 60% cost interest (to earn 40%) in the lands. The Company has committed to drill four wells on the farmin lands.
Painted Pony commenced an active operated exploration and development program in May 2007, targeting light, sweet oil in the Bakken formation in SE Saskatchewan. To date, Painted Pony has drilled a total of 10 (3.7 net) wells in Saskatchewan. Currently 5 (1.9 net) wells are producing and an additional 4 (1.3 net) wells are expected to be on production before the end of the first quarter of 2008. Production for December 2007 averaged 120 bbls/d, from 1.2 net Bakken formation wells and 0.5 net Midale zone wells. The Company currently has three drilling rigs employed drilling Bakken horizontal wells and plans to drill another 6 (2.4 net) wells by the end of March 2008. Painted Pony has a planned 40 well Bakken horizontal well drilling program for 2008.
At Kisbey, Painted Pony has drilled a total of 6 (1.7 net) horizontal Bakken oil wells to date. At Midale, 3 (1.5 net) horizontal Bakken wells have been drilled to date.
Painted Pony estimates a drilling inventory of 100 plus potential drilling locations for Bakken oil within the approximately 59,000 net acres it has access to.
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