Teton's estimated net production volumes for the third quarter, which ended September 30, 2007, were 405 million cubic feet equivalent ("MMcfe"), averaging 4.4 million cubic feet equivalent per day ("MMcfed"). This represents a 56% increase from the third quarter of 2006 of net production volumes of 260 MMcfe and a 65% production volume increase over the second quarter 2007 net production volumes of 246 MMcfe. For the first nine months of 2007, net production volumes totaled 846 MMcfe representing an 81% increase over the first nine months of 2006, which had a net production volume of 467 MMcfe. Production contributions in the third quarter 2007 came from the Piceance, DJ and Williston Basin.
The results presented herein for the Piceance Basin reflect a 25% working interest in that property. The 12.5% working interest divestiture to Delta Petroleum, announced September 26, 2007, will be reflected in the 4th quarter and will ultimately change the Piceance results summarized herein.
Piceance Basin. Currently, a total of 43 gross wells are producing with an additional four wells in the first stages of completion; these are anticipated to be producing to sales on or before the end of the month. Teton's current estimated net production (25% working interest) has reached 5.9 million cubic feet per day ("MMcfd"). In the third quarter 2007, the Piceance Basin contributed 384 MMcfe or 94% of the total Company net production. Teton participated in the drilling of 7 gross wells during the third quarter of 2007 and 28 gross wells for the first three quarters of 2007. The Company with partners intends to participate in 36 gross wells this year and have two rigs currently operating on its 6,314 gross acre project.
Denver-Julesburg Basin. Teton has participated in the drilling of 70 gross wells on its Teton-Noble 266,000 gross acre block, with a 25% working interest. Total gross production from the Teton-Noble AMI is approximately 3 MMcf per day. The Chundy field is currently producing approximately 2.6 MMcf gross and 529 Mcf net to Teton from 32 wells. The Hagan field is currently producing approximately 437 Mcf per day gross and 89 Mcf per day net to Teton from 12 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 50 have been drilled to date; also in 2007, 50 square miles of 3-D seismic is planned of which 40 square miles are currently in progress. In the third quarter of 2007, the DJ Basin contributed 19 MMcf or 5% of the total Company net production.
Williston Basin. Currently, one Bakken well is producing on Teton's 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 25 Bopd, and 50 Mcfd. The working interest owners have completed a surface lineament study to evaluate the Bakken formation potential and plan to drill a second Bakken well in the first quarter of 2008. Also within Teton's Goliath acreage position, the Company participated with a 5.95% working interest in the drilling of the Solberg 32-2 well, an offset to a Red River discovery that was recently drilled by another operator less than one mile away from the Champion I-25H Bakken producer. The well has reached total depth of 14,400 feet and is testing. A 3D seismic program is currently under way to further define the potential for Red River production within portions of the Goliath acreage. An additional Red River test will be recommended for drilling in the first quarter of 2008. In the third quarter 2007, the Bakken well contributed 491 barrels of oil (4.1 MMcfe) or 1.0% of the total Company production.
Big Horn Basin. Teton has acquired a total of approximately 15,000 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 project. Current plans call for the initial well to be permitted in the fourth quarter and drilled in the first quarter of 2008.
"We are pleased with the strong progress we have made in the third 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 to meet our 2007 drilling objectives and to exceed our 2007 production targets."
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