| Investors looking for Alberta energy stocks would do | | | | Britton's wealth of experience spans over forty-five |
| well to notice Pennant Energy Inc. [TSXV: PEN] a | | | | years in the oil and gas exploration and development |
| promising oil and gas firm that trades on the TSX | | | | business. During his notable career, he has been |
| Venture Exchange. This company enjoys good cash | | | | instrumental in successfully commercializing over four |
| flow from 15- 45 % interest in eight oil wells in | | | | hundred and thirty oil and gas wells, some of which |
| Manitoba's Daly Field, producing medium grade crude | | | | are still abundant producers. Jim Britton has a |
| from the Lodgepole and Bakken formations. These | | | | remarkable track record of drilling 86% commercially |
| wells come on strong and then plateau for decades - | | | | successful wells. He was the man who engineered |
| all are in the plateau stage now and only 4 years old. | | | | Dynamic Oil & Gas, Inc's growth from 25 barrels of |
| Pennant's Manitoba Properties provide the cash fuel | | | | oil equivalent a day (boepd) to over 5,000 boepd. |
| that helps propel this company's Alberta explorations, | | | | But drilling for oil is risky business. In the spring of |
| and that's a good business model in any oil patch. | | | | 2007, the company's share price rose to a record |
| On paper, Pennant Energy is a solid performer. The | | | | $1.07 in on anticipation of the results of testing on |
| company has no debt and approx $1,500,000 in the | | | | Pennant's Kaybob S#1 Project. The company's stock |
| bank. The $0.40 cent share price seems compacted - | | | | dropped again two months later when Yingling |
| with only 16,164,809 shares outstanding and only | | | | announced "the absence of hydrocarbons in |
| 21,255,938 fully diluted, it's a tightly packed structure. | | | | commercial quantities led to the abandonment of this |
| This firm has $900,000 in flow through funds to | | | | technically challenging $3-million-plus well." |
| spend before the end of the year, and they need to | | | | There was an upside, however. Pennant's business |
| spend that money in the ground. | | | | model works: All of Pennant's financial risk was |
| When I spoke to President Thomas Yingling on the | | | | absorbed by Austin Developments Corp., which paid |
| phone recently, he confirmed that both his team and | | | | 100% of the costs of the drilling in return to earn a |
| his land positions are growing. Pennant is looking to | | | | 50% interest in the venture. By adhering to a finely |
| acquire more oil production in Alberta, and is presently | | | | balanced risk/reward model, and refueling from their |
| considering which of three large-scale drilling it will | | | | Manitoba wells, Pennant managed to keep its |
| commence in the short term. Yingling categorized all | | | | treasury of over $1,500,000 relatively intact and still |
| three of these options as, "drill-ready, farm-in | | | | remains debt free. |
| opportunities for us to drill before year end. Each of | | | | Just last month, together with Austin Developments |
| these projects is between one and half and three | | | | Corp. (TSX: AUL), Pennant Energy expanded its |
| million dollars which we consider to be low risk, | | | | Bronson Property land holdings by successful bidding |
| high-return, drill-ready projects. So we're about to | | | | at a September 19th, 2007 Alberta Crown Land Sale. |
| move on one of them.' | | | | The Bronson Property is now sub-divided as Bronson |
| Another encouraging aspect about Pennant Energy is | | | | East and Bronson West with the east portion being |
| the strong share position held by management. | | | | the newly acquired 640 acre contiguous property |
| Yingling, for example, personally holds 1.3 million | | | | located south east of the existing Bronson West. |
| shares of the company and can therefore be | | | | Positive results from a Geochem survey and a 3D |
| expected to energetically pursue growth. These | | | | seismic survey have identified several potential drill |
| include "increasing shareholder wealth by targeting | | | | targets on the 640 acre Bronson East site. |
| opportunities that offer the promise of accelerated oil | | | | Yingling says the team has everything in place to |
| production with a fast payback," and simultaneously | | | | potentially drill a company-maker in Alberta this |
| expanding "participation in low-risk developmental | | | | winter. With a $0.40 share price, undiluted share |
| drilling projects that provide enough cash flow to | | | | structure and record oil prices, Pennant offers a rare |
| mitigate the need to seriously dilute the company's | | | | opportunity to participate in a ground-floor |
| much-envied share structure." | | | | opportunity of a well-managed and highly ambitious |
| A seasoned venture capitalist, Thomas Yingling was | | | | (producing!) oil & gas junior. |
| appointed President of Pennant Energy on June 25, | | | | This article is intended for information purposes only, |
| 2003. Mr. Yingling has also served for over a decade | | | | and is not a recommendation to buy or sell the |
| as the President of Brahma Communications Corp., an | | | | equities of any company mentioned herein. It is |
| investment-consulting firm that specializes in | | | | based on sources believed to be reliable, but no |
| corporate finance, investor relations and strategic | | | | warranty as to accuracy is expressed or implied. The |
| corporate planning for publicly traded companies. In | | | | opinions expressed in the article are those of the |
| restructuring Pennant Energy, he brought James | | | | author except where statements are attributed to |
| Britton, P. Geol. P. Eng. out of a comfortable | | | | individuals other than the author, in which case the |
| retirement to serve as the firm's Senior Geologist / | | | | opinions are those of the individual to whom they are |
| Engineer and sit on the board as one of the | | | | attributed. |
| Company Directors. | | | | |