CALGARY, Dec. 11, 2011 /CNW/ - TriOil Resources Ltd. ("TriOil" or the "Company" - TSXV:TOL) is pleased to announce an expanded land position and an increased horizontal drilling program in the Kaybob area of west central Alberta. In addition, TriOil is pleased to provide an operational update on its Lochend Cardium light oil resource play and capital spending guidance on its 2012 winter drilling program.
In its western Lochend area, TriOil previously announced on October 25, 2011 that the Company's first successful Cardium horizontal well had tested at 593 bopd (784 boe/d). We are pleased to report that this well flowed 44 API light oil at strong rates over its initial month of production with an IP 30 of 298 bopd (368 boe/d including natural gas volumes that are expected to be pipeline connected to TriOil's gas facility in 2012). This result is well above our current type curves for the Lochend area.
In the central Lochend area, TriOil previously announced on November 6, 2011 a successful Cardium horizontal well had tested at 1,180 bopd (1,320 boe/d). This well has recently been brought on production and we are very pleased with its early performance. TriOil continues to execute an active December 2011 program on the high impact central Lochend Cardium light oil trend with 1 (0.6 net) horizontal well currently drilling and 2 (1.35 net) wells scheduled for multi-stage fracture completions in mid December at central Lochend.
TriOil is pursuing an early stage Dunvegan oil play in the Kaybob area of west central Alberta. Test results from our first well (TriOil 30 percent working interest) on the play were announced on October 25, 2011. This well was recently brought on production and we are very pleased with its early performance.
TriOil announced the closing of a $25 million bought deal financing on November 30, 2011. This additional capital allowed TriOil to secure 2 additional farmouts on the emerging Kaybob Dunvegan oil play that have significantly expanded the Company's opportunity base and growth platform. As a result, TriOil currently owns, or has the right to earn, interests ranging from 20 to 100 percent in approximately 50 gross (31.8 net) sections of Dunvegan oil rights in the greater Kaybob area. TriOil has a drilling rig contracted for its 2012 Kaybob program and our first operated well at Kaybob is scheduled to commence drilling in mid December.
2012 Winter Capital Budget
TriOil expects to enter 2012 with a solid production base of approximately 1,900 to 2,100 boed (65 percent oil weighted), a strong opening balance sheet ($5 to $7 million of working capital and undrawn bank lines of $50 million) and continued momentum on the Company's Lochend Cardium and Kaybob Dunvegan light oil projects.
Based on the success of the Company's 2011 capital program and the recently closed $25 million financing, the Company's board of directors has approved an expanded $40 million capital program for the first half of 2012 focused on TriOil's light oil resource plays at Lochend and Kaybob. Our winter drilling program includes 7 (4.2 net) wells on the Company's new Dunvegan light oil resource play at Kaybob, 6 (4.0 net) Cardium horizontal wells at Lochend and 1 (0.7 net) Montney horizontal well at Pouce Coupe.
We look forward to providing details on the Company's 2012 capital program, budget and guidance in the first quarter of the year.
Stock Option Grants
TriOil also announces that, in accordance with its annual compensation process, it is granted options to purchase Class A common shares of the Corporation ("Options") to certain executive officers, employees, directors and consultants of the Corporation. Of the 1,071,000 Options granted, a total of 760,000 Options were granted to the executive officers and directors of the Corporation. Each Option is exercisable for a period of 4 years from the date of grant and the exercise price of the Options will be equal to the greater of: (i)$2.10 per share and (ii) the closing price of the Class A shares on the TSX Venture Exchange two trading days following the issuance of this press release.
TriOil is a publicly traded junior oil resource player in Western Canada. Substantial land positions have been acquired on early stage light oil resource opportunities to capitalize on improvements in horizontal drilling and multi-stage fracture stimulation technologies, specifically targeting opportunities in the emerging Cardium oil trends in Alberta. TriOil has successfully executed its business plan and has positioned the Company for solid growth in production, reserves and shareholder value.
TriOil trades on the TSX Venture Exchange under the symbol "TOL". As of December 9, 2011, there were approximately 43.2 million shares issued and outstanding (47.3 million fully diluted).
Forward Looking Statements
This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "believe", "plans", "intends", "confident", "may", "objective", "ongoing", "will", "should", "project", and similar expressions are intended to identify forward-looking information. More particularly, this document contains forward looking statements which include, but are not limited to, expected future drilling and completion plans, expected production and reserves growth and the future operations of TriOil.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by TriOil, including with respect to the anticipated exploration and development opportunities and the outlook for the fiscal year ending December 31, 2011, expectations and assumptions concerning the success of future exploration and development activities, production guidance, the performance of new wells, prevailing commodity prices and the availability of additional capital if and when required by the Corporation.
Any references in this news release to initial and/or final raw test or production rates and/or "flush" production rates or 30, 60 and 90 day production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.
Although TriOil believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because TriOil can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in TriOil's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com and TriOil's other public disclosure documents which have been filed on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and TriOil undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Meaning of BOE
The term "barrels of oil equivalent" or "boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
Russell J. Tripp, President & CEO, TriOil Resources Ltd.; Cheryne Johnson, VP Finance & CFO, TriOil Resources Ltd.; Andrew Wiacek, VP Exploration, TriOil Resources Ltd.; Corporate Phone: (403) 265-4115