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Triangle and its partners hope to drill six more wells to firm up its “sign post” about the gas potential, though raising money in these recessionary times has not been easy for junior exploration companies. “Obviously, if we had a really full bank account right now we would be back out there drilling because finding places to drill in this block isn’t the challenge,” Anderson explained.
To proceed with its development plan, Triangle must sign up a new partner and is in discussion with about 20 companies about becoming a partner in the venture. “We’re looking for a strategic partner,” said Anderson. “We are a small company and we’ve done the best we can by bringing in partners and brought in some capital last summer.”
He said this new, strategic partner could be another oil or gas company or energy firm or gas utility wanting to diversify its portfolio. As with any exploration it can be a risky proposition and Triangle hit a hurdle in April after analyzing its well results. “We didn’t get any gas to flow out of that well. We think we did everything right. We’ve been back and analyzing the properties of the rock,” said Anderson. “It just didn’t work as well as it is supposed to, it’s because of the confining stress in the rock. The gas is all still there but we weren’t successful in getting it to flow at this well.”
He does believe the company has figured out what went wrong. “It doesn’t deter us from proceeding with the rest of our program,” he added. “We are still very confident the resource potential is still very large.” “This is part of the risk in exploration. We’re all well aware of that. You still can’t hang a value of the entire basin on the results of a single well or even a half dozen wells. We’re still encouraged,” said Anderson.
Triangle had hoped to be in commercial production by 2010 but that seems unlikely now. Anderson said the company will decide by November whether the shale gas can be successfully pumped out of the ground and into the pipeline for deliveries. Once a decision is made the cycle time for construction and drilling could take almost two years, he said.
“We still believe quite honestly that commercial production is possible and we’ve got some work to completely prove it to ourselves.”
