Teton Energy Corporation announced new operational developments in its Williston Basin and Piceance Basin projects and in its operated project in the Central Kansas Uplift.
On November 14, 2008, the Company and its partners spud the Viall #30-1 well in their Goliath project in the Williston Basin to test the Red River, Stonewall and Winnipeg formations. The 14,400 foot well is drilling ahead at 4,200 feet and is expected to take approximately 30 days to drill. It is the first well to be drilled on one of ten potential locations identified by 3-D seismic in a ten square-mile area on Teton's acreage block. The well is approximately two miles north of the successful Solberg 32-2 Red River test drilled by Whiting Petroleum. Teton has a 5.65 percent interest in the Solberg well, which came online in March of 2008 and has produced approximately 252 million cubic feet equivalent ("MMcfe") through September 30, 2008, or approximately 12 MMcfe net to Teton. Once the Viall #30-1 well has been drilled, the rig is expected to move to the first of four locations anticipated to be drilled in the Bakken Shale play in a participation agreement with Red Technology Alliance LLC ("RTA") on Teton's 88,472 gross acreage block. If RTA decides to drill all four wells (at 100 percent cost to RTA), RTA will earn a 40-percent working interest in the project and Teton's working interest will change from 25 percent to 15 percent.
In the Central Kansas Uplift ("CKU"), the Patton Trust 2-36 in which Teton has a 100 percent working interest, has averaged 91 barrels of oil daily over a 20-day period since coming online on October 31, 2008. The Company has now hooked up nine of its ten successful wells to date. The tenth well, a natural gas well, is awaiting a pipeline connection and is expected to be hooked up before year-end. As of November 19, 2008, the Company had a total of 62 gross wells producing in the CKU project. Three additional gross wells are expected to be drilled by the end of 2008.
In the Piceance Basin, Teton's partner continues to complete and hook up new wells. Eleven additional gross wells have been completed and brought online since September 30, 2008 and 91 gross wells are now producing in the play. Net production for the Company has continued to increase as a result of the recent increase in completions in the Piceance Basin and averaged 9.7 MMcfe per day during October 2008.
Dominic Bazile, Executive Vice President and Chief Operating Officer, stated, "We are very excited to commence drilling a well to test our Red River position in the Williston Basin with our partners and have positioned ourselves to test the Bakken Shale on our acreage without a significant outlay of capital. The recent well we hooked up in our operated Central Kansas Uplift project continues to exhibit an excellent production profile and is by far our most successful well in this area. Our new geologist and geophysicist are working diligently to identify the characteristics of this successful well and two other wells previously drilled by our partner in order to identify additional drilling locations with similar traits."
Karl Arleth, President and Chief Executive Officer, also commented, "We continue to execute our business plan within the framework of our revised capital expenditure budget. Despite recent budget reductions, we have positioned ourselves to advance our Williston project while prudently managing our liquidity. The Piceance Basin continues to perform largely according to plan and we are very encouraged by our recent success in the Central Kansas Uplift. Our hedging positions are protecting a significant portion of our production from the recent downward trend in commodity prices and we are extremely encouraged with recent advances in many areas of our operations. We are working diligently to steer the Company through these challenging times for all public companies and position Teton to return to a strong growth mode as financial conditions improve."
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