We have expressed more than once the wish for a strategic partner who would help them speed up the drilling program, and voilà, there it is: Zodiac exploration corporation. This is good news, albeit not reflected in the price. We had to write that quite a few times the last couple of weeks..

Zodiac seems well capable of handling the task, drilling in the Windsor Block, and they seem to have ample experience in the exploration of shale gas (that is, it’s CEO Rogers, with a previous company called Trident and another shale gas play).

The deal is rather straightforward:

• Zodiac pays half the drilling cost of up to 7.5M for a 12.5% stake in the entire Windsor block
• Zodiac has the option for the same deal once more, taking it’s stake to 25%

The Windsor block, that’s where the company’s Horton Bluff Shale prospect is of which Ryder Scott Company Petroleum Consultants has estimated the resource potential of 69Tcf. So it’s a 25% stake in their prime property.

That’s an excellent deal for.. Trident. No wonder Rogers had this to say:

• “We are extremely pleased to participate with Triangle in the Maritimes Basin program. Triangle has done an outstanding job of positioning the company as a leading operator in Eastern Canada and we look forward to a dynamic joint venture partnership. This is a rare opportunity to participate in the exploration and development of a basin scale opportunity with a spectrum of play types that includes a vast shale gas resource.”

But it’s also good for Triangle, if you realize what the alternative might have looked like. That would have involved some form of highly dilutive financing, whilst now they have another expert on board with which developments will be speeded up considerably.

And this is what analyst Irene Haas at Canaccord Adams had to say earlier:

• “During the quarterly conference call, Triangle also re-emphasized the importance of the $23.6 million in net proceeds it received from the private placement of 18.2575 million units priced at $1.40 per unit. In our view, this infusion of cash is a game-changing event for Triangle. The company can now execute its 2008 drilling program and bring the Horton Bluff Shale gas project from an exploratory phase to a development phase. In our opinion, the private placement essentially eliminates financing risk for the company for 2008.”

So, even before this JV deal, some already argued that the financing risk was out for 2008. Triangle can now proceed with speed and show us how much of that 69Tcf is recoverable. With the financing risk essentially gone for some time to come, only the recoverability risk remains. The gas is there, will it show up?