Pennant Energy Inc. has signed a Farmout Agreement with Highpine Oil & Gas Ltd. of Calgary, Alberta to participate in drilling a Devonian Nisku formation well in the Pembina Field, Alberta as to a 24% interest. Drilling of the well was commenced on March 9, 2008. Highpine is a TSE listed Company that produced in excess of 17,000 boe per day in 2007.
The Pembina Field is a large, mature oil and gas field centered approximately 65 miles southwest of the City of Edmonton, Alberta. The Pembina Devonian Nisku play has been evolving since 2002-2003 through the application of improved recording and interpretation techniques utilizing 3D seismic data. The hydrocarbon accumulations are trapped in dolomitized reefs encountered in a northwest -- southeast trend through and including Townships 48-49 Ranges 8-9W5. The Nisku wells have exhibited prolific production and reserves, producing both light oil and liquids rich natural gas.
The Pennant well location is 16-29-048-08W5; immediately to the west lie the Nisku VV pool (section 1-049-09W5) while, the Nisku SS pool is directly east in sections 27 and 28-048-08W5. The Alberta EUB reports recoverable oil and gas reserves of 2.1 million barrels and 5.2 BCF respectively for the Nisku VV Pool, while the Nisku SS Pool recoverable reserves of 780 thousand barrels of oil and 1.6 BCF of gas are reported. Individual wells in each of these pools have produced at rates of in excess of 1000 barrels of oil per day (Bopd) and 3 million cubic feet per day (Mmcfd).
The 16-29 well is targeting gas and condensate production from the Nisku MMM pool, which was discovered with the drilling of, West Energy Pem14-28-48-8W5 (the 14-28 well) in 2005. Based on the 3D seismic data, the reservoir is approximately 140 acres in size with an average potential pay interval of 25 feet. The hydrocarbon column in Nisku pools is underlain by an active, regional water table. Completion and production operations of Nisku wells are undertaken to optimize recovery before influx of water.
The offset well 14-28-48-08W5 was completed in the Nisku MMM pool and produced at daily gas rates of over 3.5 Mmcfd with condensate production as high as 135 barrels per day reported; however, early water breakthrough occurred, possibly a result of problems with completion operations. The Highpine well will be drilled directionally from a surface location 01-32-48-08W5 to 102/16-29-48-08W5 in an attempt to optimize hydrocarbon capture from the pool before water influx. The well is currently drilling and is expected to take approximately 26 days to reach a total drilling depth of approximately 2,700 meters. The Company's share of drilling and casing or abandoning the well is expected to be less than $500,000.00.
Mr. Tom Yingling, President of Pennant Energy states, "We are very pleased to be participating in a drilling program with a joint venture partner as experienced and significant as Highpine."
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