Ann: Well Testing Update, page-6

One of my other Montney holdings (not PONY) put out some very interesting information. Now whether this was designed to deflect attention from what I would call disappointing (or what mgmt typically calls encouraging) results, the stock price has done very well (up 25% in last week). Based on that information, I'm lowering my expectation of what CE1's CGR would be to around +/- 35-40 Bbls/MMcf for IP24.

Firstly here are the IP24 results from the pad. I'm also mapping CE1 results to that. I don't expect CE1 to achieve this level of result, because this company operates in the AB Montney SRC area.

Data has been reformatted by me.





Impact of Re-Test / Extended Flowback“Soak” time initial flow test and a re-test has yielded significant improvements in condensate rates / CGRs; extended flowback (once on production) is expected to yield similar improvements.

What did they find the impact to be? Retest yielded average119% gain in CGR



To quote the company "...the limited allowable flowback time, the initial test results may not be indicative of ultimate productivity and condensate ratios ... observed substantial improvements in both total production rates and condensate to gas ratios (“CGRs”) through providing “soak” time to wells by allowing them to sit for 6 – 12 months after completion or flow back on an extended basis ... has had the opportunity to re-test, the average final 24-hour daily condensate production rates have increased by 200%, along with 60% improved CGRs"

Now that's a long time to let a completed well lay "idle" and would mess around big time on payback period and cashflow but its an enormous improvement in condensate ... which is the ultimate prize. Given that there isn't really anyway to immediately tie into production these to CW1 wells they'll "soak" by default and it will be interesting to see what happens with CGR when the time comes to tie them into production.