Painted Pony’s first sales of natural gas from Townsend Facility in BC

Painted Pony Petroleum Ltd. [PPY-TSX] provides the following update on the commissioning by AltaGas Ltd. [TSX-ALA] of the Townsend Facility. The facility is a 198 MMcf/d natural gas and liquids processing facility located in the Townsend portion of Painted Pony’s Montney assets in northern BC.

The facility began producing natural gas sales volumes on July 7, 2016 with commercial operations beginning on July 10, 2016, more than 30 days ahead of Painted Pony’s schedule.  The early commissioning of the facility has provided Painted Pony the opportunity to accelerate production volume growth in the second half of 2016.  Painted Pony expects raw natural gas production volumes through the facility to average approximately 50 MMcf/d during August 2016; 100 MMcf/d during September 2016; and 150 MMcf/d during October 2016.  Painted Pony continues to anticipate a 2016 year-end exit production rate of 240 MMcfe/d (40,000 boe/d).

Based on design, the expected efficiency of the facility is anticipated to improve natural gas liquids (NGL) yields from Blair Creek in addition to allowing for higher production volumes from the liquids-rich Townsend area.  As a result, NGL volumes are expected to increase from approximately 5% of total production volumes currently to approximately 10% of total production volumes in the fourth quarter of 2016.  This will result in a 2016 year-end exit NGL production rate of approximately 4,000 bbls/d from current rates of approximately 1,000 bbls/d.  Painted Pony expects the increased NGL production to be comprised of approximately 50% condensate with the remaining volumes to be split evenly between propane and butane.

Painted Pony is pleased that the capital cost of the facility continues to trend below budget as a lower final cost will reduce the capital lease fee amount paid by the company on the Facility.