Titan Exploration Ltd. Releases 2006 Year End Results and Reserves Information



    CALGARY, March 13 /CNW/ - Titan Exploration Ltd., (TTN.A, TTN.B - TSX
Venture) ("Titan" or the "Company"), is pleased to announce Titan's financial
and operating results for the three months and twelve months ended December
31, 2006, together with its 2006 reserves information (NI 51-101 compliant).

    
    2006 Highlights

    -   drilled 20 (14.51 net) wells with a 85% success rate resulting in
        10 (8.07 net) oil wells and 7 (4.15 net) gas wells;

    -   increased average production by 69% to an average of 2,404 boe/d,
        from 1,424 boe/d for the year ended December 31, 2005;

    -   increased average production per share (weighted average Class A and
        B) by 16% to 88.14 boe per million shares, from 76.01 boe per million
        shares for the year ended December 31, 2005;

    -   increased cash flow by 73% to $22,131,305, from $12,780,799 for the
        year ended December 31, 2005;

    -   increased cash flow per share by 19% to $0.81 per share (weighted
        average Class A and B) from $0.68 per share for the year ended
        December 31, 2005;

    -   increased oil and gas revenue by 68% to $46,795,540, from $27,797,979
        for the year ended December 31, 2005;

    -   invested $18.75 million in facility projects at West Boundary (gas
        facility and pipeline), Pouce Coupe (battery and gas gathering
        system) and Seal (battery and water injection system), setting the
        stage for future growth in each of these core areas;

    -   proved plus probable reserves base of approximately 8.25 million
        barrels of oil equivalent with a reserve life index exceeding
        8.7 years;

    -   estimated net asset value (NAV) per fully diluted share of:

        -  $3.38 (10% BT McDaniel forecast pricing)

        -  $3.80 (10% BT strip pricing)

        -  $4.49 (5% BT forecast pricing);

    -   Titan's 3 year average all in finding and development costs
        (including future capital) are $16.60 per boe (proved plus probable).

    Looking Forward to 2007

    Titan's budget for 2007 encompasses the following:

    -   initial capital budget set at a range of $25 to $30 million, with no
        significant facilities capital planned;

    -   over 50% of current production hedged to provide a level of certainty
        around cash flows;

    -   plans to drill up to 25 (18.35 net) wells, an increase of 25% over
        the number of wells drilled during 2006;

    -   budgeted exit production rate in excess of 2,900 boe/d;

    -   current production in excess of 2,600 boe/d.


    2006 Financial Highlights

                                            Three Months Ended December 31

                                           2006         2005        % Change
    -------------------------------------------------------------------------

    Petroleum and natural gas sales    $11,160,548  $ 9,790,948        14.0%

    Net earnings (loss)                $(1,045,303) $   250,516           -

    Net earnings (loss) per share
     (Class A and Class B)             $     (0.04) $      0.01           -

    Cash flow from operations          $ 4,449,045  $ 3,427,589        29.8%

    Cash flow per share (Class A and
     Class B)                          $      0.16  $      0.15         6.7%

    Capital expenditures               $12,003,657  $22,876,812      (47.5)%

    Net debt, including working
     capital deficiency                $47,244,999  $19,771,319       139.0%

    Average Daily Production
      Oil (bbl/d)                            1,514        1,389         9.0%
      Gas (mcf/d)                            5,342        2,510       112.8%
      Oil Equivalent - boe/d (6 to 1)        2,404        1,808        33.0%

    Average Sales Prices ($Cdn)
      Oil/liquids (per bbl)            $     54.42  $     55.86       (2.6)%
      Gas (per mcf)                    $      7.29  $     11.48      (36.5)%
      Oil Equivalent - per boe
       (6 to 1)                        $     50.45  $     58.87      (14.3)%

    Operating costs per boe (6 to 1)   $     11.05  $     15.80      (30.1)%
    Transportation costs per boe
     (6 to 1)                          $      2.90  $      2.89         0.3%
    Royalties per boe (6 to 1)         $      9.79  $     11.24      (12.9)%
    Operating netbacks per boe
     (6 to 1)                          $     26.71  $     28.94       (7.7)%

    Weighted average shares
     outstanding                        27,825,391   23,629,743        17.8%
    Actual Class A Shares outstanding
     at end of period                   25,132,572   23,860,512         5.3%
    Actual Class B Shares outstanding
     at end of period                    1,012,500    1,012,500         0.0%



                                               Year Ended December 31

                                           2006         2005        % Change
    -------------------------------------------------------------------------

    Petroleum and natural gas sales    $46,795,540  $27,797,979        68.3%

    Net earnings (loss)                $ 4,112,364  $ 3,533,257        16.4%

    Net earnings (loss) per share
     (Class A and Class B)             $      0.15  $      0.19      (21.1)%

    Cash flow from operations          $22,112,604  $12,780,799        73.0%

    Cash flow per share (Class A and
     Class B)                          $      0.81  $      0.68        19.1%

    Capital expenditures               $57,149,910  $68,340,753      (16.4)%

    Net debt, including working
     capital deficiency                $47,244,999  $19,771,319       139.0%

    Average Daily Production
      Oil (bbl/d)                            1,706        1,063        60.5%
      Gas (mcf/d)                            4,189        2,163        93.7%
      Oil Equivalent - boe/d (6 to 1)        2,404        1,424        68.8%

    Average Sales Prices ($Cdn)
      Oil/liquids (per bbl)            $     58.58  $     52.94        10.7%
      Gas (per mcf)                    $      6.75  $      9.18      (26.5)%
      Oil Equivalent - per boe
       (6 to 1)                        $     53.32  $     53.49       (0.3)%

    Operating costs per boe (6 to 1)   $     10.60  $     11.22       (5.5)%
    Transportation costs per boe
     (6 to 1)                          $      2.99  $      2.57        16.3%
    Royalties per boe (6 to 1)         $      9.65  $      9.65         0.0%
    Operating netbacks per boe
     (6 to 1)                          $     30.08  $     30.05         0.1%

    Weighted average shares
     outstanding                        27,275,802   18,734,244        45.6%
    Actual Class A Shares outstanding
     at end of period                   25,132,572   23,860,512         5.3%
    Actual Class B Shares outstanding
     at end of period                    1,012,500    1,012,500         0.0%
    

    In this report, all references to barrels of oil equivalent ("boe") are
    calculated converting natural gas to oil at a ratio of six thousand cubic
    feet of natural gas to one barrel of oil.

    Core Area Review

    The Company's core areas are the Peace River Arch and Southwest
Saskatchewan.

    Pouce Coupe, Alberta
    At Pouce Coupe, Alberta, Titan drilled four successful, 100% working
interest oil wells into the Halfway C Pool. Net production has increased from
approximately 200 boe/d in February, 2006 to 440 boe/d in January, 2007 with
peak rates as high as 600 boe/d. Titan also completed a battery upgrade and a
10.6 km gathering system in the spring of 2006, eliminating routine flaring of
solution gas volumes. This facility was constructed to handle all of Titan's
existing and future drilling plans for the area.
    Titan has identified up to eight additional, seismically defined,
drilling locations (5.0 net) at Pouce Coupe. Three wells (2.0 net) are
currently being licensed to drill starting in the third quarter of 2007.

    Seal, Alberta
    Seal was an active exploitation area for Titan in 2006. Positive results
from the phase 1 High Volume Lift Program (HVL) completed in 2005 led to the
conversion of 6 additional wells to HVL in 2006. These conversions on a
combined basis have increased production from approximately 300 bbls/d (net)
in November, 2006 to 560 bbls/d (net) in February, 2007. To handle the
additional volumes Titan also upgraded the Seal battery, converted 5 wells to
water injectors, electrified the field and installed 6.3 miles of
emulsion/water injection flowlines. Titan has identified up to three
additional candidates for HVL in 2007.
    The upgraded battery and water injection facility at Seal is now capable
of handling volumes from new drills. Titan currently has up to eight 3-D
seismically defined drilling locations on its land and two of these wells are
budgeted for drilling in 2007. The first of these two wells was drilled in
January 2007 and subsequently abandoned. Although the well encountered the
zone as per the 3-D seismic interpretation, the porosity was too low to make
commercial quantities of oil. The other locations identified on seismic are on
independent locations relative to the unsuccessful well.

    Gordondale, Alberta
    Gordondale is a multi zone area with Titan working interest production of
approximately 350 boe/d coming from several zones within each of the
Cretaceous, Triassic and Mississipian time periods. Titan drilled 4
(3.685 net) wells in Gordondale in 2006. One (1 net) Dunvegan gas well and 3
(2.685 net) Kiskatinaw wells. Two of these wells are currently on stream
producing 2.38 mmcf/d (1.68 mmcf/d net). Early in Titan's history the Company
focused on the shallow, less risky horizons at Gordondale. As Titan's cash
flow base started to grow more emphasis was placed higher impact exploration.
In March 2006, Titan drilled a significant Basal Kiskatinaw exploration
discovery. This well went on production in May, 2006 and is currently
producing in excess of 2.2 mmcf/d (1.5 mmcf/d net) to Titan. Pressure
information collected by Titan indicates this pool contains reserves between 9
- 20 Bcf. To follow up on this discovery Titan shot an additional 3-D seismic
program that showed up to three follow up Kiskatinaw drilling locations. Two
100% follow up locations were drilled in the second half of 2006. The first
well was D&A. The second well is on production from the Kiskatinaw at low
rates and is currently being evaluated for stimulation. Titan continues to
refine its seismic interpretation of the Basal Kiskatinaw at Gordondale and
has two additional 100% locations targeting the Basal Kiskatinaw. Titan also
continues to hold a diverse drilling inventory of Cretaceous Dunvegan and
Triassic Charlie Lake opportunities at Gordondale.

    West Boundary, British Columbia
    The West Boundary area has grown as a result of grass roots exploration
and was Titan's most active area in 2006. The Company constructed a gas
compressor station, oil handling facility and full gathering system in early
2006. This facility was constructed with significant spare capacity in
anticipation of aggressive future exploration and development drilling plans.
It is also strategically beneficial for Titan being the only option for gas
compression in the immediate area, a definite advantage when competing at land
sales. The West Boundary facility went on stream in May, 2006.
    Titan drilled 8 (4.42 net) exploration wells at West Boundary in 2006,
resulting in 4 (2.46 net) oil wells and 4 (1.96 net) gas wells. Discoveries
were made in the Gething, Siphon, Boundary Lake, Halfway, Montney and
Kiskatinaw formations. Net production at West Boundary is currently
approximately 250 boe/d.
    One of the 2006 Gething discoveries at West Boundary caused considerable
operational challenges for Titan at the end of the year. This well was drilled
in August and was tested briefly in September 2006 with all technical
indicators supporting a high deliverability gas well. Titan's interpretation
of its proprietary 3-D seismic indicated pool could contain gas reserves of up
to 5 Bcf (2.4 Bcf net). The well was tied into Titan's infrastucture in
November, 2006 and placed on production at an initial rate of 3 mmcf/d
(1.44 mmcf/d net). Production was to be increased over the next several weeks
to 5 mmcf/d (2.4 mmcf/d or 400 boe/d net), however, within a week of going on
stream, gas rates and flowing pressures started to drop. This trend continued
to descend to marginal levels and the well started to load up with liquids.
Unable to flow, the well was shut in until early 2007, at which time Titan
equipped the well with artifical lift and placed the well back on production.
In February 2007, the well was producing stable at 65 bbls/d (31 bbls/d net)
of oil with an additional 47 boe/d (22 boe/d net) of solution gas. A technical
analysis of this well suggests that Titan initially drained a very small gas
cap to a larger oil pool. Titan will evaluate the production performance of
this oil well for the first half of 2007 and with positive data will continue
development drilling into the pool.
    Titan will remain active at West Boundary in 2007 with a balanced effort
in exploration and development. The Company expects to drill up to 7 (6 net)
locations at West Boundary in 2007, although, Titan estimates there are more
than 20 drillable locations in the area.

    Fort St. John, British Columbia
    Titan has an attractive inventory of drilling prospects in the greater
Fort St John area targeting Triassic formations. Prospects are multi zone in
nature, offering a mixture of liquids rich gas and oil opportunities. In 2007,
Titan is currently budgeting to drill one well in the Fort St. John area
(excluding West Boundary), and is seeking to farm out a number of other
prospects.

    Southwest Saskatchewan
    Titan has an attractive landbase in Southwest Saskatchewan (approximately
25,000 net undeveloped acres). The area is characterized as low to medium risk
drilling, targeting medium gravity crude oil at depths of 1,100 to 1,450 m. On
stream capital costs are approximately $550,000 per well. Titan has an
inventory of 50+ drilling locations and is currently producing approximately
800 boe/d from the area.
    During 2006, Titan drilled a total of 3 (1.41 net) wells, resulting in 2
(1.11 net) oil wells and 1 (0.3 net) D&A well. Titan also shot a proprietary
3D seismic program over its Eastbrook property. At Eastbrook, the Company has
an average working interest of 70% in an Upper Shaunavon oil pool with
estimated oil in place of 18 to 20 million barrels. Still in its infancy,
current recovery from the Eastbrook pool is only 3.5%. During 2007, Titan
plans to drill up to 10 wells in southwest Saskatchewan and to implement a
waterflood pilot at Eastbrook. Under a waterflood and with 40 acre well
spacing, Titan expects to increase the recovery factor to as high as 15% -
25%.

    Reserves

    In accordance with National Instrument 51-101 - Standards of Disclosure
for Oil and Gas Activities (NI 51-101), Titan's year end reserve evaluation
effective December 31, 2006 (the "McDaniel Report"), was prepared by McDaniel
& Associates Consultants Ltd. ("McDaniel"). McDaniel evaluated 100% of Titan's
reserves. The McDaniel price forecast at January 1, 2006 was used to determine
all estimates of future net revenue (also referred to as net present value or
NPV). Titan's Reserves Committee, comprised of independent and appropriately
qualified directors, has reviewed and approved of the evaluation prepared by
McDaniel.

    
    Summary

    -   Proved reserves totalled 4,988.2 thousand boe (Mboe) at December 31,
        2006, a decrease of 8% as compared to proved reserves at December 31,
        2005.

    -   Proved plus probable reserves totalled 8,246.4 thousand boe (Mboe) at
        December 31, 2006, a decrease of 4% as compared to proved plus
        probable reserves at December 31, 2005.

    -   Total proved plus probable 10% NPV amounted to $131.1 million
        (forecast pricing). The comparable amount at December 31, 2005 was
        $132.0 million.

    -   All in finding and development costs for 2006 (including future
        capital) are $33.68 (proved plus probable). If the impact of the one
        time facilities expenditures were removed from 2006, Titan's all in
        finding and development costs for 2006 (including future capital) are
        $20.32 (proved plus probable).

    -   Titan's 3 year average all in finding and development costs
        (including future capital) are $16.47 per boe (proved plus probable).
        Excluding future capital, 3 year all in finding and development costs
        are $14.16 (proved plus probable).

    -   Titan's recycle ratio was 0.89 times for 2006 using the 2006 cash
        flow netback of $30.08 per boe and using proved plus probable reserve
        additions. If the impact of the one time facilities expenditures were
        removed from 2006, Titan's recycle ratio was 1.48.

    -   The 3 year average recycle ratio achieved by Titan is 1.78 using an
        average cash flow netback of $29.28 per boe over such period and
        Titan's all in 3 year finding and development cost of $16.47 (proved
        plus probable, including future capital). From drilling alone,
        Titan's 3 year average recycle ratio is 1.67 (proved plus probable,
        including future capital).
    

    The tables below are a summary of the oil, NGL and natural gas reserves
of the Company and the net present value of future net revenue attributable to
such reserves as evaluated in the McDaniel Report based on constant and
forecast price and cost assumptions. The tables summarize the data contained
in the McDaniel Report and as a result may contain slightly different numbers
than such report due to rounding. Also due to rounding, certain columns may
not add exactly.
    Gross reserves means the total working interest (operating or
non-operating) share of remaining recoverable reserves owned by Titan before
deductions of royalties payable to others and without including any royalty
interests owned by Titan. Net reserves are Titan's working interest (operating
or non-operating) share of remaining recoverable reserves after deduction of
royalty obligations plus Titan's royalty interests in production or reserves
    The net present value of future net revenue attributable to the Company's
reserves is stated without provision for interest costs and general and
administrative costs, but after providing for estimated royalties, production
costs, development costs, other income, future capital expenditures, and well
abandonment costs for only those wells assigned reserves by McDaniel. It
should not be assumed that the undiscounted or discounted net present value of
future net revenue attributable to the Company's reserves estimated by
McDaniel represent the fair market value of those reserves. Other assumptions
and qualifications relating to costs, prices for future production and other
matters are summarized herein. The recovery and reserve estimates of the
Company's oil, NGL and natural gas reserves provided herein are estimates only
and there is no guarantee that the estimated reserves will be recovered.
Actual reserves may be greater than or less than the estimates provided
herein.

    
    Summary of Oil and Gas Reserves - Forecast Prices and Costs

    -------------------------------------------------------------------------
                                    Light & Medium Oil        Natural Gas
                                     Gross        Net      Gross        Net
    -------------------------------------------------------------------------
                                     (mbbl)     (mbbl)     (mmcf)     (mmcf)
    Proved
      Developed Producing           2,833.5    2,471.4    5,644.8    4,163.7
      Developed Non-Producing         190.6      168.6    1,131.4      866.6
      Undeveloped                     546.5      476.6    1,234.5      924.0
    -------------------------------------------------------------------------
    Total Proved                    3,570.6    3,116.5    8,010.7    5,954.2
    Probable                        2,418.4    1,882.0    4,811.0    3,615.6
    -------------------------------------------------------------------------
    Total Proved plus Probable      5,989.0    4,998.6   12,821.7    9,569.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                   Natural Gas Liquids      Oil Equivalent
                                     Gross        Net      Gross        Net
    -------------------------------------------------------------------------
                                     (mbbl)     (mbbl)     (mboe)     (mboe)
    Proved
      Developed Producing              57.1       39.8    3,831.4    3,205.1
      Developed Non-Producing           1.5        1.0      380.7      314.0
      Undeveloped                      23.8       16.5      776.0      647.1
    -------------------------------------------------------------------------
    Total Proved                       82.5       57.4    4,988.2    4,166.3
    Probable                           37.8       26.0    3,258.1    2,510.7
    -------------------------------------------------------------------------
    Total Proved plus Probable        120.3       83.4    8,246.4    6,676.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Summary of Net Present Value of Future Net Revenue - Forecast Prices and
    Costs ($000s)

    -------------------------------------------------------------------------
                                Before Income Taxes Discounted at (%/year)
                              0%         5%        10%        15%        20%
    -------------------------------------------------------------------------

    Proved
      Developed
       Producing      $ 98,498.8 $ 85,746.1 $ 76,085.6 $ 68,564.7 $ 62,561.8
      Developed
       Non-Producing     8,405.9    7,221.0    6,257.0    5,469.2    4,820.2
      Undeveloped       14,328.0   10,720.9    8,040.9    6,012.6    4,448.7
    -------------------------------------------------------------------------
    Total Proved      $121,232.7 $103,688.0 $ 90,383.5 $ 80,046.5 $ 71,830.8
    Probable            81,199.8   56,159.8   40,742.9   30,673.9   23,775.1
    -------------------------------------------------------------------------
    Total Proved plus
     Probable         $202,432.5 $159,847.8 $131,126.4 $110,720.4 $ 95,605.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Summary of Net Asset Value

                                             McDaniel               McDaniel
                                               NPV 5%  $/Share       NPV 10%
    -------------------------------------------------------------------------
    Total Proved Plus Probable Reserves
     ($000's)                             $ 159,847.8   $ 6.18   $ 131,126.4
    Net Debt                                (47,263.7)   (1.83)    (47,263.7)
    Option Proceeds                             249.9     0.01         249.9
    Undeveloped Land (@ $125/acre)         11489.4     0.37       11489.4
    Seismic                                    3750.0     0.15        3750.0
    Class B Shares                          (10,125.0)   (0.39)    (10,125.0)
    -------------------------------------------------------------------------
    Total                                 $ 117,948.4   $ 4.49   $  89,227.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                             Strip
                                                         Pricing(1)
                                              $/Share       NPV 10%  $/Share
    -------------------------------------------------------------------------
    Total Proved Plus Probable Reserves
     ($000's)                                  $ 5.07   $ 141,939.5   $ 5.49
    Net Debt                                    (1.83)    (47,263.7)   (1.83)
    Option Proceeds                              0.01         249.9     0.01
    Undeveloped Land (@ $125/acre)            0.37       11489.4     0.37
    Seismic                                      0.15        3750.0     0.15
    Class B Shares                              (0.39)    (10,125.0)   (0.39)
    -------------------------------------------------------------------------
    Total                                      $ 3.38   $  98,125.2   $ 3.80
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Note:  (1) Strip pricing utilizing, for oil, WTI US$65.16, $ 67.23 and
           $67.35 for 2007 through 2009 respectively and, for gas, utilizing
           AECO C$7.60, $8.08 and $7.97 for 2007 through 2009 respectively,
           in each case reverting to McDaniel January 1, 2007 price forecast
           for subsequent years.


    Gross Company Interest Reserve Reconciliation for 2006

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                  6:1 Oil Equivalent (Mboe)

                                                                       Total
                                                                      Proved
                                                 Total                  Plus
                                                Proved   Probable   Probable
    -------------------------------------------------------------------------

    December 31, 2005 - Opening Balance        5,446.3    3,183.3    8,629.6

      Extensions                                 202.1      240.8      443.0
      Improved Recovery                           68.7       38.1      106.8
      Technical Revisions                       (465.3)    (457.6)    (922.7)
      Discoveries                                510.1      231.4      741.5
      Acquisitions                                93.9       22.0      115.9
      Dispositions                                 0.0        0.0        0.0
      Economic Factors                             0.0        0.0        0.0
      Production                                (867.6)      (0.0)    (867.6)

    -------------------------------------------------------------------------
    December 31, 2006 - Closing Balance        4,988.2    3,258.0    8,246.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Titan's 2006 year end reserves report included negative revisions of
465 mboe (proved) and 923 mboe (proved plus probable). Titan had a large
number of wells that were drilled in late 2005 that were included in the 2005
reserves report. Due to a lack of production history, reserves were typically
assigned to these new wells based on volumetric estimates, as opposed to
decline analysis or performance analysis. Volumetric estimates are relied on
in areas where there is limited performance information available from
offsetting wells producing from the same formation. Approximately 62% of the
negative revisions in 2006 are attributable poorer than anticipated
performance from wells drilled late in 2005. Reduced reserve bookings to PUD
locations offsetting these wells accounts for a further 25% of the revisions.
    Moving forward into 2007 and 2008, Titan does not expect to experience
the same performance issues with its wells, as the majority of Titan's
reserves in its 2006 year end reserves report are attributable to properties
with significant production history. In 2005, approximately 45% of the total
net proved plus probable reserves were attributable to wells with very limited
production history (discoveries and extensions). In Titan's 2006 reserves
report, this percentage is less than 14%. The ratio of proved undeveloped
reserves to total proved reserves has also been reduced by approximately 20%
during the period of 2005 to 2006.

    
    Total Proved Finding and, Development Costs (per NI 51-101)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                       Since
                                       2006       2005       2004  Inception
    -------------------------------------------------------------------------
    Capital expenditures
     excluding acquisitions and
     dispositions ($'000)         $  55,786  $  40,192  $  11,471  $ 107,449
    Net change from previously
     allocated future development
     capital ($'000)              $ (10,743) $  22,731  $     830  $  12,818
    Total capital including net
     change in future capital
     ($'000)                      $  45,043  $  62,923  $  12,301  $ 120,267
    Reserve additions excluding
     acquisitions, dispositions
     and revisions - Mboe               781      2,855        891      4,526
    Total F&D costs per boe -
     including change in future
     capital                      $   57.68  $   22.04  $   13.80  $   26.57
    Total F&D costs per boe -
     excluding change in future
     capital                      $   71.44  $   14.08  $   12.88  $   23.74
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total Proved + Probable Finding and, Development Costs (per NI 51-101)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                       Since
                                       2006       2005       2004  Inception
    -------------------------------------------------------------------------
    Capital expenditures excluding
     acquisitions and dispositions
     ($'000)                      $  55,786  $  40,192  $  11,471  $ 107,454
    Net change from previously
     allocated future development
     capital ($'000)              $  (9,761) $  30,345  $   2,435  $  24,431
    Total capital including net
     change in future capital
     ($'000)                      $  46,025  $  70,537  $  13,906  $ 131,885
    Reserve additions excluding
     acquisitions, dispositions
     and revisions - Mboe             1,291      4,958      1,175      7,424
    Total F&D costs per boe -
     including change in future
     capital                      $   35.65  $   14.23  $   11.83  $   17.57
    Total F&D costs per boe -
     excluding change in future
     capital                      $   43.21  $    8.11  $    9.77  $   14.47
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total Proved Finding, Development and Acquisition Costs

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                       Since
                                       2006       2005       2004  Inception
    -------------------------------------------------------------------------
    Capital expenditures including
     acquisitions and dispositions
     ($'000)                      $  57,150  $  68,696  $  24,734  $ 150,580
    Net change from previously
     allocated future development
     capital ($'000)              $ (10,743) $  24,171  $     821  $  14,249
    Total capital including net
     change in future capital
     ($'000)                      $  46,407  $  92,867  $  25,555  $ 164,829
    Reserve additions excluding
     revisions - Mboe                   875      3,803      2,246      6,924
    Total FD&A costs per boe -
     including change in future
     capital                      $   53.05  $   24.42  $   11.38  $   23.81
    Total FD&A costs per boe -
     excluding change in future
     capital                      $   65.33  $   18.06  $   11.01  $   21.75
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total Proved + Probable Finding, Development and Acquisition Costs

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                       Since
                                       2006       2005       2004  Inception
    -------------------------------------------------------------------------
    Capital expenditures including
     acquisitions and dispositions
     ($'000)                      $  57,150  $  68,696  $  24,734  $ 150,580
    Net change from previously
     allocated future development
     capital ($'000)              $  (9,761) $  31,879  $   2,454  $  24,572
    Total capital including net
     change in future capital
     ($'000)                      $  47,389  $ 100,575  $  27,188  $ 175,152
    Reserve additions excluding
     revisions - Mboe                 1,407      6,252      2,978     10,637
    Total FD&A costs per boe -
     including change in future
     capital                      $   33.68  $   16.09  $    9.13  $   16.47
    Total FD&A costs per boe -
     excluding change in future
     capital                      $   40.62  $   10.99  $    8.30  $   14.16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Titan's finding and development costs in 2006 were negatively impacted by
the significant capital expenditures Titan incurred relating to facilities
projects at Seal (battery and water injection system), Pouce Coupe (battery
and gas gathering system) and West Boundary (gas facility and pipeline). Total
capital expenditures in 2006 associated with these projects exceeded
$18.75 million. Although this represents a significant up front investment for
Titan, the benefits of these facilities will continue to be enjoyed for by
Titan for years to come and should be reflected in future finding and
development costs. If the impact of the facilities expenditures were removed
from 2006, Titan's all in finding and development costs for 2006 (including
future capital) would have been reduced from $33.68 to $20.32 (proved plus
probable).
    Titan's 3 year average all in finding and development costs (including
future capital) are $23.81 per boe (proved) and $16.47 per boe (proved plus
probable). Excluding future capital, 3 year all in finding and development
costs are $21.75 (proved) and $14.16 (proved plus probable).
    The aggregate of the exploration and development costs incurred in the
most recent financial year and the change during that year in estimated future
development costs generally will not reflect total finding and development
costs related to reserve additions for that year.

    Outlook For 2007

    2006 was a challenging year for Titan and its shareholders. Growth was
hampered by the significant investment that Titan made in its facilities at
Seal, West Boundary and Pouce Coupe. Costs continued to escalate through last
winter and each of these projects ended up costing significantly more than was
originally anticipated. Although an investment in Titan's future, these
facilities did not produce any immediate return for Titan. A consequence of
this significant investment was that Titan was forced to defer certain
drilling projects originally slated for 2006 into 2007. This in turn
negatively impacted Titan's average and exit production rates. Moving forward,
Titan does not believe that it is appropriate to continue to finance these
facilities projects using Titan's revolving line of credit, as the facilities
are long term investments that will provide benefits to Titan shareholders for
years to come. Consequently, as part of the annual renewal of Titan's banking
facility, we intend to shift a portion of Titan's $18.75 million investment
into long term debt. Titan expects to have its renewed facility in place prior
to the end of March.
    Q4 production was negatively impacted by a TCPL outage at Pouce Coupe,
downtime at Battle Creek due to a fire tube failure and outages at Seal
related to the facility startup, with the result that Q4 production averaged
2,404 boe/d. These items are all isolated one-time items which are now
resolved and production is now steady in excess of 2,600 boe/d.
    With this behind us, we believe that we have built a solid foundation to
fuel continued future growth. Our reserves and production base are solid and
many exciting prospects remain to be drilled. In 2007, Titan will embark upon
an exciting drilling program, while at the same time exercising fiscal
responsibility in how we spends our capital. During the first quarter Titan
has been working diligently to reduce overall debt levels. We will strive to
supplement our existing land and drilling inventory and to acquire strategic
assets where management believes that it has the ability to unlock significant
unrealized value.
    The Company's Board of Directors has approved an initial 2007 exploration
and development capital expenditure program in a range of $25 to $30 million.
Titan has decided to initially execute a conservative capital budget and is
directionally committed to incurring capital expenditures in an amount that
approximates projected cash flow from operations.
    In order to provide some level of certainty over the Company's ability to
execute on a base budget and given the recent volatility of commodity prices,
the Company has prudently initiated a systematic commodity hedging strategy,
whereby it has presently arranged the following hedge contracts for 2007:

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Product         Index      Term           Volume       Price
    -------------------------------------------------------------------------
    Gas collar      AECO-C     Mar. 1/07 -    1,500 GJs/d  C$7.00 -
                               Oct. 31/07                  C$8.00 per GJ

    Gas collar      AECO-C     Mar. 1/07 -    1,500 GJs/d  C$7.00 -
                               Oct. 31/07                  C$8.50 per GJ

    Oil collar      W.T.I.     Mar. 1/07 -    250 Bbl/d    US$ 55.00 -
                               Dec. 31/07                  US$ 69.50 per Bbl

    Oil collar      W.T.I.     Mar. 1/07 -    250 Bbl/d    US$ 55.00 -
                               Dec. 31/07                  US$ 70.00 per Bbl

    Fixed oil swap  W.T.I.     Mar. 1/07 -    250 Bbl/d    US$ 64.70 per Bbl
                               Dec. 31/07
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Although the anticipated 2007 capital budget is materially smaller in
absolute dollars than Titan's 2006 capital budget, it is significant to note
that Titan expects to drill up to 25% more wells in 2007 than it did in 2006.
Titan does not have any major facilities expenditures planned for 2007 and a
material portion of Titan's planned 2007 drilling locations are around its new
facilities at West Boundary, Pouce Coupe and Seal. This will help to minimize
the costs of tie-ins for new wells and should result in quicker on stream
times.
    Titan's 2007 capital program is a diversified program targeting lower
risk development drilling and exploitation projects with a modest component
directed at higher risk, high impact exploration opportunities. The 2007
Capital Budget encompasses the drilling of up to 25 high interest wells,
including up to 6 wells at West Boundary, up to 4 wells at Pouce Coupe, 2
wells at Seal, 2 wells at Gordondale, 2 wells in northeast B.C. and up to 9
wells in southwest Saskatchewan. This level of activity and capital investment
is expected to result in production increasing to over 2,900 boe/d by the end
of 2007. Titan's 2007 budget works out to be a conservative capital efficiency
of approximately $30,000 per producing boe.
    Titan believes that it offers an excellent investment opportunity as its
current share price is not reflective of the intrinsic value of the Company.
Moreover, Titan's asset base possesses all the prerequisites for a solid
growth platform including: an extensive, operated drilling inventory providing
exposure to both light oil and natural gas prospects, access to approximately
76,000 net acres of undeveloped acreage offering geologic play diversity, a
long-life, proved plus probable reserves base of approximately 8.25 million
barrels of oil equivalent with a reserve life index exceeding 8.7 years
(proved plus probable based on 2,600 boe/d production rate) and an operated
production base allowing for predominately year-round access.

    Titan Exploration Ltd. is an independent, Alberta-based, junior oil and
gas company engaged in the exploration for, and development and production of,
natural gas and crude oil reserves in western Canada. Titan's areas of focus
include northeast British Columbia, the Peace River Arch area of northwest
Alberta and southwest Saskatchewan. Its Class A and Class B shares trade on
the Toronto Stock Exchange under the symbols "TTN.A" and "TTN.B",
respectively.

    Forward-Looking Statements - Certain information set forth in this
document, including management's assessment of Titan's future plans and
operations, contains forward-looking statements. When used in this document,
the words "anticipate," "believe," "estimate," "expect," "intend," "may,"
"project," "plan", "will", "should" and similar expressions are intended to be
among the statements that identify forward-looking statements. By their
nature, forward-looking statements are subject to numerous risks and
uncertainties, many of which are beyond Titan's control, including the impact
of general economic conditions, industry conditions, volatility of commodity
prices, currency fluctuations, imprecision of reserve estimates, environmental
risks, competition from other industry participants, the lack of availability
of qualified personnel or management, stock market volatility and ability to
access sufficient capital from internal and external sources. Readers are
cautioned that the assumptions used in the preparation of such information,
although considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on forward-looking
statements. Titan's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these forward-looking
statements. No assurance can be given that any of the events anticipated will
transpire or occur, or if any of them do so, what benefits Titan will derive
from them. Titan disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

    Oil equivalent amounts have been calculated using a conversion rate of
six thousand cubic feet of natural gas to one barrel of oil. BOEs may be
misleading, particularly if used in isolation. A BOE conversion ratio of 6
mcf: 1 bbl is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead.

    THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.





For further information:

For further information: Trevor Spagrud, President & CEO, Titan
Exploration Ltd., Telephone: (403) 313-8590, Facsimilie: (403) 313-8591,
www.titanexploration.ca; Richard F. McHardy, Vice President, Finance & CFO,
Titan Exploration Ltd., Telephone: (403) 313-8590, Facsimilie: (403) 313-8591,
www.titanexploration.ca

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TITAN EXPLORATION LTD.

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