OilVoice - Toreador Announces Growth Strategy

Toreador Announces Growth Strategy

Friday, June 05, 2009

Toreador Resources Corporation announced that at this week's Annual Stockholder Meeting in New York City it will discuss the details of its new corporate strategy to position the Company to achieve significant growth over the 2009 - 2011 timeframe and unlock shareholder value.

Building upon the Company's momentum already achieved this year in reducing costs, debt, and capital expenditures, a renewed strategic direction has been formulated to create a unique, fast-growing, pan-European and Mediterranean exploration and production company headquartered in Paris, France. Toreador intends to 1) maintain its recent achievement of an efficient base business, 2) unlock value in its Turkey and Hungary assets, 3) execute steady growth in its France assets, and 4) deliver step-change expansion that includes a phased development of the Paris Basin Oil Shale and the pursuit of corporate and assets-based transactions as they become available.

Highlights of the Company's strategy include:

FRANCE

• The Company has completed a review of its conventional growth opportunities in France and plans that the La Garenne well on the Rigny le Ferron permit will be drilled, scheduled to spud late this year pending regulatory approvals. The Company believes the well has low risk and is forecast to prove up to 30 mmbo of oil in place, which should expose the Company to a two-fold potential increase in net barrels of proved and probable reserves. The Company has a 100% interest in the well.
• The Company is pursuing the exploitation of unconventional resources in the Paris Basin. Toreador's work in this area has shown that the Paris Basin has exceedingly similar characteristics to the Bakken Formation in the Williston Basin (North America). The Company has the right to develop 649,000 acres (with an additional 153,000 acres pending regulatory approval) in the heart of the Paris Basin where an estimated 65 billion barrels of oil are believed to remain in the source rock that is located between the long-producing conventional reservoirs of the Paris Basin. Toreador intends to use proven exploration and production technology used in Bakken to develop this acreage. Pursuit of the Paris Basin Oil Shale will comprise four phases, with the scope of the latter three phases depending on previous results. The Company's current focus is on implementing Phase 1 through the end of 2010.

HUNGARY

• Toreador is considering opportunities to monetize its Hungary operations and portfolio to enable the Company to expedite development of the Paris Basin Oil Shale.
• Operations continue on the Balotaszallas-E-1 ("Ba-E-1") well in the Tompa block in southern Hungary and short-term testing results will be released later this month. A gas contract has now been signed with EON, and construction of the planned tie-in at the entrance of the plant facilities has commenced. The planned 20-kilometer pipeline will also enable the Company to produce the Kiha-15 well, which was the 2006 re-entry of a well previously owned by MOL and has been shut-in awaiting a market access point. The permanent pipeline installation is expected to be completed in the fourth quarter of this year. The Company has a 25% carried interest in the Ba-E-1 well and a working interest of 100% in the Kiha-15 well.

TURKEY

• Stellar Energy Advisors, based in London, UK, is currently managing an open-bid process to sell Toreador's remaining operations in Turkey, including its 10% interest in the South Akcakoca Sub-Basin, in addition to the related onshore production there, and 2.2 million net acres in exploration licenses that are currently held. The sale process has been extended through mid-summer based upon interest from prospective buyers in Turkey's strategic positioning in the oil and gas industry.
• In addition to the sale process, Toreador is also reviewing other options to monetize its business in Turkey, including but not limited to a potential spin-off to create a unique E&P company purely focused on Turkey.

POTENTIAL TRANSACTIONS

• Toreador's strategy includes potential for growth through mergers, acquisitions and other transactions that would create value for shareholders. Potential transactions will be pursued opportunistically, with a focus on companies and assets that complement Toreador's core business.

Craig McKenzie, President and CEO of Toreador, said, "We are very pleased with the progress we have made implementing corporate priorities to stabilize the business and can now commit to deliver on this new strategic plan to create a leading pan-European and Mediterranean E&P company headquartered in France. We believe that 2009 will be a break-out year for the Company."

Added McKenzie, "Beyond the ongoing work with our conventional assets, the most exciting project for us, and our shareholders, is the development of the unconventional oil shale identified in the Paris Basin. Toreador is prepared to bring the industry's Bakken experience to Europe to exploit the vast resources that are in the Paris Basin. Technologies commonplace to US E&P are yet to be deployed in Europe."

Concluded McKenzie, "Toreador's strategy is new, but we have already taken a number of steps that have strengthened the company, significantly increased financial discipline and refocused the portfolio. We are confident in our ability to execute these ambitious goals for the benefit of all our shareholders."