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First Titan Corp.’s (OTCBB: FTTN.OB - News) new Alabama oil well is permitted, the location is built and the water well drilled. The next step will be rigging up.

The operators of the new well have contracted a rig currently drilling another well in the expansive oil field. When that well is drilled and the casing set, the rig will move to the new well’s proposed drilling site. FTTN expects rigging up to begin in about three weeks.

Last week, FTTN announced the purchase of a working interest in a proposed well in the Little Cedar Creek Field, Alabama’s largest producing oil field. The proposed drilling site is surrounded by eight producing oil wells, leading to high expectations for the new project.

Current estimates for the drilling site range from 400,000 to 800,000 barrels of oil a day in production.



FTTN's latest headline claims that their new prospect in Alabama is expected to produce a whopping "400,000 to 800,000 barrels of oil a day in production." - HOLY COW!!

This of course is pure fantasy, since current production from ALL wells in this field currently produce only about 1414 bbls/day (latest data from August 2011 shows 43,819 bbls over 31 days: http://www.ogb.state.al.us/ogb/production_unit.aspx?UNIT_NAME=LITTLE+CEDAR+CREEK+OIL+UNIT ). This production figure is for 108 wells in this field, which on average would indicate a production rate of about 13 bbls per day. (http://www.gsa.state.al.us/ogb/lcc.aspx ).

Assuming for the moment that FTTN meant to say the ultimate production (not daily production) would be 400-800,000 bbls, at an average (non-declining) production rate of 13 bbls/day, the ulitmiate recovery would take 84-169 years to produce!! Multiply the above times FTTN's likely small working interest, and this prospect becomes a real yawner.

Taking the ridiculous even further, in the event FTTN actually hits such a monumental well, because the field is Unitized, there are special rules on production which limit the maximum output to 200% of the rate of any other well in the Unit - further limiting the payout of such a prospect: http://www.ogb.state.al.us/documents/fieldrules/Little%20Cedar%20Creek.pdf

Of course, all of this is moot if FTTN cannot generate more than the $694 in cash (http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8410843) it has in the bank to pay for such a venture without some serious dilution.