August 27, 2010 / 12:40 PM / in 7 years

UPDATE 1- Second Wave Q2 loss narrows; ups capital spending

* Q2 loss C$0.02/shr vs C$0.11/shr last year

* Says to exit 2010 with production of 2,800 boe/d

* Increases capital budget to C$55 mln till March 2011

* Says to drill additional 18 wells by March

Aug 27 (Reuters) - Junior oil and gas company Second Wave Petroleum Inc SCS.V posted a narrower quarterly loss, helped by a ramp up in production, and said it has increased its capital budget for this year.

Aided by better drilling results and the completion of a C$27 million financing in July, Second Wave has budgeted C$55 million in capital spending till March 2011, with C$40.8 million for the second half of 2010.

Total capital budget for this year had been previously set at about C$49.7 million. [ID:nSGE64O0FY]

Second Wave said it expects to drill 18 wells by March at its Judy Creek Pekisko oil resource play in Western Canada, and targets to exit 2010 at production rates of about 2,800 barrels of oil equivalent per day (boe/d).

For the second quarter, net loss narrowed to C$1.6 million, or 2 Canadian cents a share, from C$4.1 million, or 11 Canadian cents a share, a year ago.

Revenue from production rose 69 percent to C$6.4 million and production for the quarter increased 44 percent.

Calagary-based Second Wave said production rates have continued to surge during the third quarter, to about 2,000 boe/d from a June average rate of 1,462 boe/d.

Second Wave shares, which have gained about 28 percent in the first half of the year, closed at C$2.76 Thursday on the Toronto Venture Exchange. (Reporting by Gowri Jayakumar in Bangalore)

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