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by Stockwatch Business Reporter

West Texas Intermediate crude for September delivery lost $2.01 to $95.58 on the New York Merc, while Brent for September lost $2.27 to $102.01 (all figures in this para U.S.). Western Canadian Select traded at a discount of $18 to WTI ($77.58), up from a discount of $18.05. Natural gas for September added 7.5 cents to $3.90 The TSX energy index lost 2.94 points to close at 307.99.

Jim Saunders's Twin Butte Energy Ltd. (TBE) added nine cents to $1.76 on 8.71 million shares, after releasing its second quarter results. It earned two cents a share, up from a loss of two cents a share in the same period last year. Production of 21,100 barrels of oil equivalent a day met analysts' predictions. Twin Butte also reaffirmed its commitment to its dividend, which at 1.6 cents a month yields a generous 10.9 per cent. Twin Butte reassured shareholders that its payout ratio is less than 100 per cent and its board of directors has approved the dividend through to the end of the year. Meanwhile, the second quarter was the company's first quarter in which it drilled entirely horizontal wells (except for one service well). It drilled eight at the Wildmere/Auburndale heavy oil property and eight in the Provost medium oil area of Alberta. Both are relatively new assets for Twin Butte. The company acquired Wildmere in October, 2012, when the property was producing 420 barrels a day. Current production is around 1,800 barrels a day. Wildmere is nearing full development, so Twin Butte has been focusing on less-developed Auburndale to the west, where six of its most recent wells averaged close to 80 barrels a day over their first 20 days. These and other wells at Auburndale are in the northern section. Over the rest of the year, Twin Butte plans to drill 15 wells in this heavy oil area, and will likely start testing the southern part of Auburndale. Provost is even newer and more interesting. The company entered this area late last year after acquiring Black Shire Energy, which was producing 7,000 barrels a day at the time. Twin Butte figures it can get the assets to 9,500 barrels a day by December. Its increasing focus on Provost helped lower total operating costs to $20.94 a barrel in the second quarter of 2014 from $22.92 a barrel a year earlier, largely because Provost is relatively cheap to explore. Operating costs there are generally around $18 to $20 a barrel. In the third quarter of this year, the company plans to direct three-quarters of spending to Provost (up from one-half in the second quarter), so it is hoping for further savings.

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