Titan has purchased approximately 53 boe/d of high quality (37 degrees), long life oil production for a total price of $3.27 million, subject to customary adjustments. The property is located at Pouce Coupe, which is approximately 15 km northwest of Titan's existing Gordondale area.
Titan has identified a number of 160 acre infill drilling opportunities on the property. In addition, depending upon the success of its infill drilling program, Titan believes that an opportunity exists to downspace from the existing 160 acre spacing to 80 acre spacing. Titan will also evaluate the use of horizontal drilling and secondary recovery mechanisms to increase the ultimate recovery factor. Original oil in place for the Halfway "C" pool is estimated at 9.5 million barrels, with only a 7% recovery factor to date. The acquisition, which is effective December 1, 2004, is accretive to Titan on a reserves per share, production per share and cash flow per share basis.
Titan also announces that it has completed its fourth quarter drilling program. During the fourth quarter of 2004 Titan drilled or participated in the drilling of 15 (10.4 net) wells, resulting in 2 (2.0 net) successful gas wells and 13 (8.4 net) successful oil wells, for a 100% success rate. In its Peace River Arch focus area, Titan successfully drilled 2 (2.0 net) gas wells and 2 (1.25 net) oil wells. In southwest Saskatchewan, during the fourth quarter Titan has drilled or participated in a total of 11 (7.15 net) wells. All of the wells drilled during the fourth quarter will be tied in and on production prior to the end of the year. Based upon its initial drilling success, Titan anticipates that it has up to 10 follow up locations in the Peace River Arch and 5 additional drilling locations in southwest Saskatchewan.
Based upon its fourth quarter drilling success and the acquisition of the Pouce Coupe property, Titan has revised upward it's 2004 production exit rate. Titan will exit 2004 with more than 1,000 boe/d of production, comprised of 67% long life, medium gravity crude oil, and 33% high rate of return, multi-zone natural gas.
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