Titan Exploration Ltd. announces financial and operating results for the quarter ending June 30, 2007



    CALGARY, Aug. 14 /CNW/ - Titan Exploration Ltd., (TTN.A, TTN.B - TSX)
("Titan" or the "Company"), is pleased to report its operating results and the
filing of its unaudited interim consolidated financial statements and related
management discussion and analysis ("MD&A") for the three and six months ended
June 30, 2007. Select operational and financial results are outlined below and
should be read in conjunction with the Company's unaudited interim
consolidated financial statements and related MD&A which can be found on the
Company's website at www.titanexploration.ca or on SEDAR at www.sedar.com.

    
    Highlights
    ----------
    Highlights of the quarter include:

    -   production averaged 2,478 boe/d for the quarter;

    -   cash flow of $6.25 million, or $0.20 per share;

    -   drilled 6 (5.7 net) oil wells at our Eastbrook, Saskatchewan
        property, with a 100% success rate;

    -   successfully completed a water source well at Eastbrook; and

    -   closed a private placement of 3.75 million Class A Shares for gross
        proceeds of $10.125 million.

    Subsequent to the end of the quarter Titan:

    -   completed the sale of our Seal, Alberta property on July 26, 2007 for
        total proceeds consisting of $22.25 million cash plus certain
        producing interests in Titan's core areas of Pouce Coupe, Alberta and
        Eastbrook, Saskatchewan; and;

    -   drilled 2 (0.96 net) wells at the Company's West Boundary property,
        with a 100% success rate.


    Financial Highlights
    --------------------

                                         Three Months Ended
                                       June 30,       June 30,
                                        2007           2006         % Change
    -------------------------------------------------------------------------

    Petroleum and natural gas sales  $12,558,907  $12,541,914             0%

    Net earnings (loss)(1)           $(6,814,855) $ 2,767,058

    Net earnings (loss) per share
     (Class A and Class B)(1)        $     (0.22) $      0.11

    Cash flow from operations(2)     $ 6,251,699  $ 6,327,487           (1)%

    Cash flow per share (Class A
     and Class B)                    $      0.20  $      0.24          (17)%

    Capital expenditures (including
     acquisitions)                   $ 6,828,647  $17,311,208          (61)%

    Net debt, including working
     capital deficiency but
     excluding unrealized hedging
     losses(3),(4)                   $38,341,433  $34,652,450            11%

    Average Daily Production
      Oil (bbl/d)                          1,698        1,711
      Gas (mcf/d)                          4,683        3,908
      Oil Equivalent - boe/d
       (6 to 1)(5)                         2,478        2,363             5%

    Average Sales Prices ($Cdn)(6)
      Oil/liquids (per bbl)          $     60.99  $     66.34           (8)%
      Gas (per mcf)                  $      7.36  $      6.22            18%
      Oil Equivalent - per boe
       (6 to 1)                      $     55.68  $     58.33           (5)%

    Operating costs per boe
     (6 to 1)                        $     11.81  $     10.07            17%
    Transportation costs per boe
     (6 to 1)                        $      2.39  $      3.08          (22)%
    Royalties per boe (6 to 1)       $      7.03  $     10.62          (34)%
    Operating netbacks per boe
     (6 to 1)                        $     34.45  $     34.56             0%
    Interest expense per boe
     (6 to 1)                        $      3.04  $      2.04            49%
    G&A (cash only) per boe
     (6 to 1)                        $      3.58  $      2.38            50%
    Corporate netback per boe
     (6 to 1)                        $     27.83  $     32.18          (14)%

    Weighted average shares
     outstanding                      30,970,855   26,340,600            18%
    Actual Class A Shares
     outstanding at end of period     28,882,572   25,123,845
    Actual Class B Shares
     outstanding at end of period      1,012,500    1,012,500



                                          Six Months Ended
                                       June 30,       June 30,
                                        2007           2006         % Change
    -------------------------------------------------------------------------

    Petroleum and natural gas sales  $24,434,333  $21,508,103            14%

    Net earnings (loss)(1)           $(8,489,597) $ 3,208,728

    Net earnings (loss) per share
     (Class A and Class B)(1)        $     (0.28) $      0.12

    Cash flow from operations(2)     $11,533,313  $10,287,755            12%

    Cash flow per share (Class A
     and Class B)                    $      0.38  $      0.39           (3)%

    Capital expenditures (including
     acquisitions)                   $12,247,027  $32,738,730          (63)%

    Net debt, including working
     capital deficiency but
     excluding unrealized hedging
     losses(3),(4)                   $38,341,433  $34,652,450            11%

    Average Daily Production
      Oil (bbl/d)                          1,787        1,699
      Gas (mcf/d)                          4,724        3,161
      Oil Equivalent - boe/d
       (6 to 1)(5)                         2,574        2,226            16%

    Average Sales Prices ($Cdn)(6)
      Oil/liquids (per bbl)          $     54.82  $     57.20           (4)%
      Gas (per mcf)                  $      7.84  $      6.85            14%
      Oil Equivalent - per boe
       (6 to 1)                      $     52.45  $     53.38           (2)%

    Operating costs per boe
     (6 to 1)                        $     11.80  $     10.46            13%
    Transportation costs per boe
     (6 to 1)                        $      2.44  $      3.00          (19)%
    Royalties per boe (6 to 1)       $      7.22  $      9.77          (26)%
    Operating netbacks per boe
     (6 to 1)                        $     30.99  $     30.15             3%
    Interest expense per boe
     (6 to 1)                        $      2.79  $      1.62            72%
    G&A (cash only) per boe
     (6 to 1)                        $      3.22  $      2.40            34%
    Corporate netback per boe
     (6 to 1)                        $     27.77  $     27.75             0%

    Weighted average shares
     outstanding                      30,335,648   26,180,133            16%
    Actual Class A Shares
     outstanding at end of period     28,882,572   25,123,845
    Actual Class B Shares
     outstanding at end of period      1,012,500    1,012,500

    Notes:

    1.  Net earnings (loss) includes impairment to goodwill of $7,332,896.

    2.  Cash flow, cash flow per share and operating netback are not defined
        by GAAP in Canada and are referred to as non- GAAP measures. Cash
        flow is based on funds generated from operating activities before
        changes in non-cash working capital and abandonment expenditures.
        Cash flow per share is calculated based on the weighted average
        number of Class A shares outstanding consistent with the calculation
        of net income per share. Corporate netback equals the total of
        revenues less royalties, realized commodity derivative gains/losses,
        transportation, general and administrative costs, interest and cash
        taxes calculated on a boe basis. Total boe is calculated by
        multiplying the daily production by the number of days in the period.

    3.  Following the disposition of the Company's Seal property on
        July 26, 2007, current net debt is estimated to be $17.5 million.

    4.  Excludes an unrealized hedging loss of $424,113 quarter ended
        June 30, 2007. Including this amount, net debt as at June 30, 2007
        was $38,765,546.

    5.  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.

    6.  Product prices include realized gains/losses on commodity
        derivatives.
    

    Although traditionally characterized by lower activity levels due to
spring breakup, the second quarter was quite active for Titan. During the
quarter we drilled a total of six (5.7 net) oil wells at our Eastbrook
Saskatchewan property with a 100% success rate. All six wells were brought on
production in July and, when stabilized, are expected to add approximately
120 bbl/d (net) of production to Titan. On stream costs for a typical Upper
Shaunavon well in southwest Saskatchewan are approximately $500,000.
    Titan's Eastbrook property contains an estimated 18 to 20 million barrels
of original oil in place. The 6 new wells have confirmed Titan's previous
mapping and have brought the well spacing down to approximately 80 acres,
which is standard spacing for Upper Shaunavon oil pools on primary production
in southwest Saskatchewan. Still in its infancy, current recovery for the pool
is under 4%. Under a water flood and with 40 acre well spacing (which is
typical of most water flooded Upper Shaunavon oil pools), Titan expects to
increase the recovery factor to as high as 15% - 25%. In July Titan
successfully completed a water source well which has excellent deliverability.
Titan intends to commence water injection in a pilot project by the fourth
quarter of this year and implementation of the water flood starting in 2008.
    In late May, Titan completed the private placement of 3,750,000 flow
through Class A Shares at a price of $2.70 per share for gross proceeds of
$10,125,000.
    During the second quarter Titan also announced that it had reached an
agreement to sell its Seal property for total proceeds consisting of
$22.25 million cash plus certain producing interests in Titan's core areas of
Pouce Coupe, Alberta and Eastbrook, Saskatchewan. The sale, in conjunction
with the recent equity financing, has injected financial strength and
flexibility into Titan's balance sheet and has enabled Titan to consolidate
its working interest and add to its drilling inventory on a net basis in two
key operational areas. Moving forward, both Pouce Coupe and Eastbrook figure
prominently in Titan's drilling plans. The sale closed on July 26, 2007.
    Production averaged 2,478 boe/d for the quarter, up 5% as compared to the
quarter ended June 30, 2006.
    Subsequent to the end of the second quarter, following up on the recent
Gething oil pool discovery at Titan's West Boundary property, Titan drilled 2
(0.96 net) wells. Both wells tested encouraging gas rates on initial
completion, consistent with the test results of the 6-35 discovery well. The
first of the two new wells is now on production, with the second well expected
to be on production by early September. Production of 110 boe per day of oil
and solution gas is anticipated for each well similar to the current rate at
6-35. Two additional extension wells are planned for the fourth quarter.

    
    Outlook/Guidance
    ----------------

    Following the completion of the sale of Seal, Titan is a company with the 
following characteristics:

    -   extensive high working interest, operated asset base in the Peace
        River Arch and southwest Saskatchewan providing exposure to both
        light/medium oil and natural gas prospects;

    -   a long-life proved plus probable reserves base of approximately
        7.13 million barrels of oil equivalent, with a reserve life index
        exceeding 8.9 years (proved plus probable based upon an average 2007
        production rate of 2,186 boe/d);

    -   a 2007 exit rate production target of 2,000 boe/d;

    -   annualized cash flow of approximately $18 million (based upon WTI US
        $68.00, Cdn. $7.00 AECO and US$/Cdn$ of 0.95)

    -   28,882,572 Class A Shares and 1,012,500 Class B Shares outstanding;

    -   a strong balance sheet, with estimated net debt as at July 31, 2007
        of approximately $17.5 million on a credit facility of $39 million;

    -   access to approximately 68,000 net acres of undeveloped acreage
        offering geologic play diversity;

    -   a large drilling inventory in excess of 80 locations; and

    -   a net asset value (management estimate at July 31, post Seal
        disposition) of $2.88 per share (fully diluted).
    

    With the Company's recent drilling success, Titan is on track to exceed
its 2007 exit rate production target of 2,000 boe/d.
    Titan expects to spend between $9 - $12 million on capital expenditures
in the second half of 2007 to drill up to 10 wells and acquire additional
undeveloped acreage in its existing core areas. These capital expenditures
will be funded through cash flow and our existing credit facilities.
    Titan is well positioned for continued growth in 2007 and beyond.
Management will continue to strive towards achieving per share financial and
operational growth, while at the same time maintaining a strong balance sheet
in order to be able to pursue strategic acquisitions on a timely basis.

    Titan's 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, Chief Executive Officer, Titan
Exploration Ltd., Telephone: (403) 313-8590, Facsimile: (403) 313-8591,
www.titanexploration.ca; Richard F. McHardy, President, Titan Exploration
Ltd., Telephone: (403) 313-8590, Facsimile: (403) 313-8591,
www.titanexploration.ca

Organization Profile

TITAN EXPLORATION LTD.

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