Teton Energy Provides Third Quarter 2006 Operations Update
Wednesday November 8, 8:00 am ET
Third Quarter 2006 Production Volumes Increase 487 Percent Over Third Quarter 2005
DENVER, Nov. 8 /PRNewswire-FirstCall/ -- Teton Energy Corporation ("Teton") (Amex: TEC - News) today provided an operations update on its Piceance, Denver-Julesburg and Williston Basin projects.
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Piceance Basin. To date, Teton has participated in the drilling of 26 gross wells on its 6,315 gross acre project in the Piceance Basin with Berry Petroleum (NYSE: BRY - News), as operator. Teton has a 25 percent working interest with approximately 628 gross locations on 10-acre spacing. During the third quarter 2006, Teton participated in the drilling of five gross wells. Of the total 26 wells, 20 wells are currently producing and flowing to sales, four wells are waiting on completion, and two wells are currently drilling.
Estimated net production volumes for the quarter ended September 30, 2006 were 264 million cubic feet ("MMcf"), averaging 2.9 million cubic feet per day ("MMcfd"). This represents an increase of 487 percent from the third quarter 2005 net production volumes of 45 MMcf, averaging 0.5 MMcfd.
Denver-Julesburg Basin. To date, Teton has participated in the drilling of 17 wells as part of the initial pilot program on the Area of Mutual Interest with Noble Energy, Inc. (NYSE: NBL - News; "Noble Energy"). Teton announced on November 7, 2006 that it had purchased an additional 56,000 gross acres in the DJ Basin (42,000 net). This purchase, along with acreage added over the past several months brings the Company's gross acres dedicated to the eastern DJ project to 266,000. As part of the agreement with Noble Energy, Teton is being carried on the first 20 wells. After completion of the first 20 wells, Teton and Noble Energy will split all costs associated with future drilling according to each party's working interest percentage; Teton, 25 percent and Noble Energy, 75 percent. Teton will receive 25 percent of any revenues derived from the first 20 wells.
All 17 wells that have been drilled reached a minimum target depth of 2,000 feet, where the target zone is the Beecher Island Chalk, a member of the Niobrara formation. The average drilling time for each well is 1.5 days.
Seven wells have been drilled in the Chundy prospect area, located in Chase and Dundy Counties, Nebraska: the Jones #12-31, Jones #32-31, State #44-36, the Ambrosek #11-5, the Jones #31-31, the Jones #41-31 and the Jones #42-31. The Jones #12-31, the Jones #31-31, the Jones #41-31 and the Jones #42-31 have been logged, cased and are waiting on completion. The Jones #32-31 and Ambrosek #11-5 wells have been perforated and fracture stimulated. The fracture stimulation was successful, staying within the Beecher Island zone. The Jones #32-31 and Ambrosek #11-5 wells are currently testing gas and water production to determine commercial viability. The State #44-36 well was plugged and abandoned based on log evaluation.
Ten wells have been drilled in the Grant prospect area, located in Perkins County, Nebraska: the Karre #42-26, State #11-36, Hagan #41-27, Karre #31-26, Hagan #22-26, the Kroeker #11-25, the Hagan #21-26, the Hagan #31-27, the Malmkar #44-22 and the Kroeker #14-24. The Karre #42-26, the Karre #31-26, the Hagan #21-26, the Hagan #31-27, the Malmkar #44-22 and the Kroeker #14-24 have been logged, cased and are waiting on completion. The Hagan #41-27 and the Kroeker #11-25 are currently testing gas and water production to determine commercial viability. The State #11-36 and Hagan #22-26 wells were plugged and abandoned based on log evaluation.
The Company and its partner are currently in the process of completing a gathering system in the Grant and Chundy areas to gain access to the Kinder Morgan pipelines, Pony Express in Chundy and Trailblazer in Grant. The pilot program may also include further 2-D and 3-D seismic evaluation.
Williston Basin. Teton is participating in the drilling of its first prospect on its Goliath leasehold of approximately 90,000 gross acres, 16,000 net to the Company's interest. The Champion 1-25H well, located in Section 24 and 25 of T157N - R97W in Williams County, North Dakota is targeting the Mississippian Bakken Formation as the primary target zone. This horizontal, tri-lateral well is currently starting the second lateral after drilling the initial west lateral. Following the drilling of the three laterals, it is expected that the well will be fracture stimulated and will go through a production testing period. Teton will have 25 percent working interest and 20 percent net revenue interest in this Williston Basin well. The partnership consists of American Oil and Gas, Inc. (Amex: AEZ - News; 50 percent working interest) and the designated operator, Evertson Operating Company (25 percent working interest).
"Driven by 487 percent year over year production growth from our Piceance project, the third quarter was very successful operationally for Teton," Andrew Schultz, Vice President of Production, stated. "We are cautiously optimistic about the preliminary results from the DJ Basin. Momentum remains strong as we continue drilling out our inventory covering all three projects. Our overall goal is for our drilling program to increase the realization of net asset value for our shareholders."
For a detailed map of the each of the projects' acreage blocks and well locations, please visit the Company's website at www.teton-energy.com
Conference Call Information. Teton invites you to listen to its third quarter 2006 results conference call via telephone or live webcast on Tuesday, November 14, 2006 at 11:30 a.m. Eastern, 9:30 a.m. Mountain time. To listen via telephone, dial (888) 202-2422 ((913) 981-5592 for international callers) five to ten minutes before the start of the call. A replay will be available through November 21, 2006 by dialing (719) 457-0820, pass code 2869142. The live conference call may also be accessed on the Internet by logging onto Teton's website at www.teton-energy.com. Select Investor Relations, then the webcasts and Presentations option on the menu. Log on at least ten minutes prior to the start of the call to register, download and install any necessary audio software. An audio replay of the call will also be available on the Company's website.
Company Description. Teton Energy Corporation (Amex: TEC - News), is an independent oil and gas exploration and production company based in Denver, Colorado. Teton is focused on the acquisition, exploration and development of North American properties and has current operations in the Rocky Mountain region of the U.S. The Company's common stock is listed on the American Stock Exchange under the ticker symbol "TEC". For more information about the Company, please visit the Company's website at www.teton-energy.com.
