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by Stockwatch Business Reporter

West Texas Intermediate crude for March delivery added $1.11 to $31.45 on the New York Merc, while Brent for March added $1.30 to $31.80 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.25 to WTI ($17.20), unchanged. Natural gas for February added 2.2 cents to $2.18. The TSX energy index added 5.65 points to close at 146.66.

B.C. Montney gas producer Painted Pony Petroleum Ltd. (PPY) added 40 cents to $3.98 on 1.72 million shares, after lowering its 2016 budget while maintaining its production guidance. This is the second time it has done so in less than three months. Its main goal for 2016 has long been to boost year-end production to 40,000 barrels of oil equivalent a day, nearly triple the year-end 2015 level. To accomplish this, Painted Pony originally thought it would have to spend $287-million and drill 38 wells. In November, trumpeting cost and productivity improvements, it changed those figures to $215-million and 29 wells, while keeping the production target intact. Now it says it can lower the budget even further to $197-million without changing anything else. It cites faster-than-expected completion times on its wells. This confirms statements by senior vice-president Ted Hanbury at the CIBC Whistler Institutional Investor Conference in British Columbia last week, when he said completion times are averaging 2.7 days this year instead of the estimated four days, saving $500,000 a well. Painted Pony confirmed most of this in today's press release. It also provided an update on its "strategic alliance" with AltaGas, referring to a 15-year supply and marketing agreement reached in August, 2014. The first phase of the agreement requires AltaGas to build a large plant this year in the Townsend area to process Painted Pony's gas. (This is the plant that will determine whether Painted Pony can achieve this year's ambitious production targets. It is apparently a couple of months ahead of schedule, said Mr. Hanbury at the conference.) Meanwhile, AltaGas announced a new B.C. project last week: the proposed Ridley Island export terminal near Prince Rupert. Painted Pony says it has the right to become a supplier to this terminal because of its agreement with AltaGas. It did not say how much of its production might be involved, but may have more to say after AltaGas makes a final investment decision, expected this year. The terminal is tentatively scheduled to start operating in 2018.

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