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Pennant Energy Inc.: Pennant Energy Inc.: Ferrier Well Successfully Drilled and Producing

^{Published on 2009-09-17 06:25:22 - Market Wire}
 

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 17, 2009) - Pennant Energy Inc. (the "Company") (TSX VENTURE:PEN) pursuant to our press release of June 26, 2009, the drilling and testing of the gas well on farm-in land in the Ferrier area of central Alberta has been completed and we are pleased to announce the well successfully tested gas and natural gas liquids from the target formation. The Company is also very pleased to announce that installation of lease facilities and the gas gathering pipeline were completed by the end of August and began producing to markets on September 1, 2009. Stabilized production data was not available at time of writing, however it is anticipated that the well will produce gas at initial rates of in excess of 1.00 MMcf/day with accompanying NGL's at a ratio of approximately 40 barrels per MMcf raw gas for a total BOE rate of 207 BOE/day (52 BOE/day net to Pennant) before royalties.

The Company joint ventured with a private Alberta company (JV Partner), to farm-in on the Ferrier gas well test. The terms of the joint venture agreement (the Agreement) call for the Company to pay 30% of the JV Partner's share of costs to drill, test, complete and tie-in or abandon the well to earn an undivided 25% working interest in the well, subject to a non-convertible gross overriding royalty on the farmout interest. The earned interest covers 1 section of land with the option to participate in future exploration and development within an area of mutual interest (AMI) for a period of 1 year from the effective date of the Agreement.

The Ferrier well will qualify for the Alberta New Well Incentive Program which provides for a maximum 5% Crown royalty rate during the first full year of production. The program is in effect for all new wells drilled which begin producing oil or natural gas between April 1, 2009 and March 31, 2010. In addition, upon application the Company may qualify for the $200-per-meter drilled (net to Company) Crown royalty credit which may reduce the Alberta Crown royalty on current Company production by up to 50% for a period of up to 1 year.

Thomas Yingling, President of Pennant Energy states, "I am very pleased to announce success at our first Ferrier well. This new well will increase our cash flow significantly! During one of the worse financial times in history compounded by natural gas prices near historic lows, Pennant managed to earn a small positive earnings per share last quarter. The additional production from this new well should help add to that. With only 20.5 million shares out, no debt, and cash in the bank this new addition of cash flow will impact Pennants balance sheet dramatically. The Company is also currently evaluating additional oil and gas projects."

ON BEHALF OF THE BOARD OF DIRECTORS OF PENNANT ENERGY INC.

Mr. Tom Yingling, President, CEO

This News Release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.

BOEs may be misleading, particularly when used in isolation. A BOE conversion ratio of 6Mcf:1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not present a value equivalency at the wellhead.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.