Small-cap E&P companies drilling internationally are often judged-or misjudged-on one or two key wells being drilled, and this neglects the bigger picture. "It's amusing to see how we are punished for one dry hole that condemned only 1,500 acres of a 962,000-acre position we have offshore Turkey. Companies do drill dry holes from time to time," Tom Graves, president and chief executive of Dallas-based Toreador Resources Corp., said at the New York Society of Security Analysts' oil and gas conference recently. "I urge you to keep the focus on our entire portfolio." In second-half 2006, Toreador expects first production from its Black Sea blocks offshore Turkey, where it has drilled five wells this year. The company also has production in France and recently acquired undeveloped acreage in Hungary from Pogo Producing Co. The company's daily production has risen from 850 barrels of oil in 2003 to 3,200 this year. "Even for a small company like ourselves, the real exploration potential remains outside the U.S.," added Mike Fitzgerald, Toreador senior vice president of exploration and production. "We are targeting countries in the European Union."

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