Canadian Oil

[Ed Monton]

Pennant Energy completes 2007 seismic program


2007-02-23 19:32 ET - News Release

Mr. Thomas Yingling reports

PENNANT'S PROVIDES ALBERTA EXPLORATION UPDATE

The winter 2007 3-D seismic surveys covering Pennant Energy Inc.'s Bronson and Kaybob properties located in Northern Alberta have been completed. The 3-D program, comprising two surveys, was carried out to expand coverage of the company properties beyond the area covered by the purchased 3-D seismic data announced in news in Stockwatch of Aug. 3, 2006. The Bronson and Kaybob properties are non-contiguous acreage blocks. The purchased 3-D data covered the area between the properties, but only the eastern portion of the Kaybob property and west side of the Bronson property. The area between the company properties contains the site of a now-suspended well which produced approximately 400,000 barrels of 43 API gravity crude and 500 million cubic feet of gas. This well was the key element in the company's decision to focus its exploration efforts in this area as it is its contention that the reservoir in that well was not fully developed and contained a significant remaining reserve.

The winter 3-D program comprised two surveys, one for each property with the Kaybob survey and interpretation fast-tracked in order to pinpoint the optimum drill location for the March, 2007, drill program. The purchased 3-D data were integrated with the Kaybob 3-D survey and the company is pleased to announce that the reservoir which produced in the offset well in such a prolific manner extends over its acreage. More importantly, the reservoir is structurally up-dip of the completed interval of the suspended well. This is a key factor in that it reveals that there may be significant remaining oil up-dip of the oil water contact in the offset well.

The permitting process is under way to prepare for drilling on the Kaybob property. Lease survey and site preparation teams are proceeding to the area and rig mobilization will begin soon. The drilling time to reach total depth of approximately 3,000 metres is expected to be about 25 days. The company is carried for all costs in this well as per the terms of the farm-out agreement with Austin Development Corp. announced in a news in Stockwatch dated Dec. 4, 2006.

The interpretation of the Bronson 3-D seismic data is under way and is expected to be completed soon. Preliminary analysis of the property, which included the geochem and the purchased 3-D seismic data, indicates that there may be a separate anomaly to the offset well and Kaybob. This anomaly may be large enough for development by up to four wells. Subsequent to analysis of the integrated purchased seismic and winter 3-D program data, the summer drilling program will be planned. Upon satisfactory compliance with the farm-out terms on the Kaybob well, the company's joint venture partner, Austin, will share development costs of the Bronson property on a 50/50 pro rata basis with Pennant.