PetroFrontier Corp (PFC)

[JB3729]

Ouch

The late drilling start dates in 2011 and 2012 had to be disappointing to investors. Although, in early 2011 they were in the process of buying out Texalta.

PFC spudded Baldwin-2 on 8/3/11. They completed the drilling on 10/11/11. They had to sidetrack the horizontal.

PFC spudded MacIntyre-2 on 10/28/11 and completed the inclined pilot hole on 11/21/11. The rig was then demobilized due to the rainy season.

PFC expected to commence drilling on the MacIntyre-2 horizontal in mid-march 2012. They actually commenced drilling on 6/4/12 and completed drilling on 6/25/12.

PFC spudded Owen-3 on 7/9/12 and expect to complete drilling by the end of August 2012.

Drilling time averaged about 2 months per well. PFC should be able to fully complete 3 wells a year with one drilling rig (for 7 months) and one completion rig (for 2 months). Unfortunately, it looks like the first 2 years of drilling will result in 3 completed wells. I hope they are warmed up now and ready to perform.

PFC's comments, especially for MacIntyre-2 and Owen-3, are very positive. If the testing goes well, an excelerated exploration program, with more than 1 rig, may be in the cards.

I think management has done a good job of getting to what will be 3 completed wells with only 70mm fully diluted shares O/S and $15mm to pay towards the JV with Statoil.

Time will tell if this was the best time to buy in.

JB