Highlights of the Second Quarter of 2007
- Triton participated in the drilling of 1.5 net wells resulting in 1.0 net successful operated natural gas well and 0.5 net non-operated dry hole.
- One (0.9 net) natural gas well was tied-in during June.
- An additional 4,970 net acres of undeveloped land were acquired, increasing the Corporation's undeveloped land position to approximately 63,420 net acres.
- Capital expenditures totaled approximately $3 million.
- Petroleum and natural gas sales totaled $1.66 million and funds from operations totaled $706,000.
- Triton ended the quarter with working capital of approximately $2.1 million.
- The Corporation's credit facility was increased to $2.3 million and Triton remains debt free.
- The Corporation's average production for the quarter was 418 boe per day and current production is approximately 800 boe per day.
The Corporation's production decline in the second quarter is essentially attributable to two things. Firstly, competitive drainage issues affected one of the Corporation's wells in the Inland area where production from the Corporation's 16-06-052-16W4 well decreased from an average of 405 boe per day in the first quarter to an average of 164 boe per day in the second quarter. Secondly, extremely wet weather hampered field operations and delayed tie-ins.
The balance of the Corporation's wells produced at comparable rates to the first quarter, albeit a minor amount of oil at Giroux Lake was temporarily shut-in due to trucking issues related to the wet weather. The Corporation did manage to tie-in one (0.9 net) natural gas well during the quarter at Sullivan Lake, which was put on production in early June.
With the wet second quarter behind us, field operations have been proceeding and current production has been increased to approximately 800 boe per day from 10 (9.6 net) operated wells and two (0.5 net) non-operated wells. The bulk of the Corporation's current production comes from two areas, Sullivan Lake and Inland.
At Sullivan Lake, Triton has four (3.9 net) operated natural gas wells currently producing approximately 280 boe per day. The Corporation also has 7,715 net acres of undeveloped land in the area on which four additional 100% working interest drilling locations have been seismically and geologically identified to date.
At Inland, Triton has three net operated natural gas wells currently producing approximately 465 boe per day. The Corporation also has 3,570 net acres of undeveloped land in the area on which two additional 100% working interest drilling locations have been seismically and geologically identified to date.
The balance of the Corporation's current production, approximately 55 boe per day, comes from three (2.75 net) operated oil wells at Giroux Lake and Lloydminster along with two (0.5 net) non-operated natural gas wells at Girouxville.
Triton's business plan contemplates drilling up to nine (8.5 net) additional wells in the second half of 2007, including one potentially high impact test well in the Willesden Green area where the Corporation has a non-operated 50% participating interest. This potentially high impact test well, targeting natural gas in the Banff formation, is scheduled to spud before the end of August.
On a go forward basis, the Corporation plans to utilize four sources of funding to finance its capital expenditures program: working capital; internally generated cash flow from operations; new equity issues if available on favorable terms; and, when deemed appropriate, debt. Triton had approximately $2.1 million in working capital at June 30, 2007 and remains debt free. The Corporation also has $2.3 million available through a credit facility.
The Corporation's management and board of directors are cognizant of the current situation in the equity and debt markets and will continue to monitor the situation.
Triton is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are listed on the TSX Venture Exchange under the trading symbol "TEZ".
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