Teton's estimated net production volumes for the second quarter ended June 30, 2007 were 266.1 million cubic feet equivalent ("MMcfe"), averaging 2.92 million cubic feet equivalent per day ("MMcfed"). This represents a 103% increase from the second quarter of 2006 of net production volumes of 131.3 MMcfe and a 31% production volume increase in the second quarter over the first quarter of 2007 of net production volumes of 202.9 MMcfe.
For the first six months of 2007, net production volumes totaled 468.9 MMcfe representing a 166% increase over the first six months of 2006 of net production volumes of 176.5 MMcfe. The total capital expenditures for the first half of 2007 totaled $14.8 million.
The 2007 capital budget for the Company has increased to $32.4 million, of which the Company plans to spend approximately $26.5 million for development drilling, $4.9 million on facilities and $1 million on geologic and geophysical costs. The Company currently plans to spend $22.1 million in the Piceance, $8.1 million in the DJ and $2.2 million in the Williston. This represents a Company participation in 128 gross wells for the full year 2007. Production contributions included in the second quarter 2007 came from the Piceance, DJ and Williston Basin, respectively.
Currently, a total of 33 gross wells are producing with an additional six wells in the first stages of completion and that are anticipated to be on sales before the end of the month. Teton's current estimated net production has reached 4.85 million cubic feet per day ("MMcfd"). There are also an additional 14 wells in various stages of completion. In the second quarter 2007, the Piceance Basin contributed 256.3 MMcfe or 96% of the total Company net production. Teton participated in the drilling of 13 gross wells during the second quarter of 2007 and 21 gross wells for the first half of 2007. The Company intends to drill 36 gross wells this year and has three rigs operating on its 6,314 gross acre project with a 25% working interest.
Teton has participated in the drilling of 42 wells on its 266,000 gross acre block, with a 25% working interest. Twenty of the 42 wells are part of the initial pilot program with Noble Energy Inc. as operator. The Chundy field is currently producing 575 Mcfd from 16 wells into the Kinder Morgan Pony Express pipeline. The Grant pilot area has been formally renamed the Hagan field and is currently producing approximately 171 Mcfd from six wells. Production rates in the Hagan field have not yet stabilized or reached their maximum potential. Plans for 2007 include the drilling of 90 gross wells, of which 22 have been drilled to date and acquiring 50-square-miles of 3-D seismic of which 12-square miles are in progress. In the second quarter 2007, the DJ Basin contributed 6.4 MMcf or 2.4% of the total Company net production.
In September 2006, Teton participated in the drilling of its first prospect on its Goliath leasehold in Williams County North Dakota. The leasehold consists of approximately 87,032 gross acres, 16,044 acres net to the Company's interest (25% working interest). The Champion 1-25H well was put on production in January 2007 and is currently producing from two of the three horizontal laterals that were drilled into the middle member of the Bakken formation. The well has produced at rates ranging from 50 to 250 barrels of oil per day ("Bopd") and is currently averaging approximately 70 Bopd since being placed on pump in June 2007. The operator, Evertson Operating Company, continues to make adjustments to the well in order to maximize the pump efficiency. The working interest owners are in the early stages of evaluating the Bakken formation potential in this new emerging trend. Information gained from the drilling and completion of the Champion 1-25 well, as well as drilling activity primarily to the east of the acreage position by other operators, will be used to further understand the productive potential of the Bakken in this area. Also within Teton's Goliath acreage position, the Company is participating with a 5.95% working interest in the drilling of the Solberg 32-2 well in Williams County North Dakota. This well is an offset to a Red River discovery well that was recently drilled by another operator less than one mile away. The well has reached total depth of 14,400 feet and is running production casing. The working interest owners are currently permitting a 3D seismic program that is expected to occur in this year in order to further define the potential for Red River production within portions of its Goliath acreage and initiate a drilling program in 2008. In the second quarter 2007, the Bakken well contributed 566 barrels of oil (3.4 MMcfe) or 1.6% of the total Company production.
Big Horn Basin
Teton has acquired a total of approximately 14,823 net acres to date in the Big Horn Basin of Wyoming with the intention of acquiring additional acreage. The Company plans to operate the asset and is seeking an industry partner to participate in the initial well on the acreage block by year-end.
"We continued to make strong operating progress in the second quarter of 2007, with significant production growth in the Piceance and continuing production contributions from our emerging projects in the DJ and Williston Basins," stated Dominic Bazile, Teton Energy Chief Operating Officer and Executive Vice President. "Overall, we are on track with our 2007 production goals."
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