The Grande Prairie area accounted for approximately 10 percent of Trilogy’s production and capital expenditures in 2009 and will continue to receive a proportionate amount of capital in 2010. Production from the Grande Prairie area decreased three percent from 2,015 Boe/d in 2008 to 1,943 Boe/d in 2009. This marginal drop in production was attributed to the decision to defer capital spending until later in the year. Trilogy continues to be challenged by limited access to non-operated facilities; however, we believe reduced capital spending by the industry in 2009 and natural declines in production may provide some access to these facilities in 2010.
Trilogy’s 2009 capital spending in the Grande Prairie area totaled $7.2 million (before drilling credits) for the year. Trilogy participated in the drilling of 3 (1.8 net) wells resulting in two gas wells and one oil well. One additional location was farmed out, resulting in a horizontal oil well from which Trilogy will receive a gross over-riding royalty on production. Trilogy participated in the drilling of one horizontal Montney gas well during the third quarter, resulting in a successful well that has proved out a play type that will be further exploited in 2010.
Trilogy remains optimistic regarding the future development of the Grande Prairie area and believes that its growing prospect inventory and land base will provide significant opportunity for future development using horizontal drilling and completion techniques on tight oil and gas reservoirs. Trilogy has budgeted capital to participate in drilling a number of horizontal wells in the area in 2010, to test various play types and develop further exploitation plans for the area.