CALGARY, Aug. 16 /CNW/ - TriOil Resources Ltd. ("TriOil") (TSXV: TOL) is pleased to announce that it has entered into an agreement to purchase Cardium focused assets within its core light oil resource property at Lochend, Alberta (the "Acquisition"). The Acquisition is consistent with TriOil's focus on large oil-in-place assets with repeatable, low risk horizontal drilling and multi-stage fracture completion opportunities.
The acquired assets complement TriOil's strong growth platform in the very active Lochend Cardium light oil resource play, adding:
- 100 boepd of Cardium light oil and natural gas production;
- 14 net (23 gross) sections of prospective Cardium rights;
- over 40 net horizontal Cardium light oil locations;
- operatorship and 99% ownership of a 5 mmcf/d gas plant; and
- operatorship and majority ownership of 60 km of key pipeline
The total cash purchase price is $8,000,000, subject to closing price adjustments, and the Acquisition is expected to close in late August.
This strategic acquisition increases TriOil's operational presence, horizontal drilling inventory and undeveloped land position in the Lochend Cardium trend. Upon closing of the Acquisition, TriOil's core Lochend property will have:
- Over 80 gross (58 net) sections of land within the Lochend Cardium
light oil fairway;
- Over 150 net horizontal locations that are prospective for Cardium
- Operatorship and high working interest ownership of strategic
production facilities and over 75 km of pipeline infrastructure
capable of handling solution gas volumes associated with light oil
production from the Lochend Cardium trend.
Since commencing operations in January, TriOil has established a major land and operational position on the Lochend Cardium trend through a series of asset transactions and successful crown and freehold land acquisitions. The emerging Lochend Cardium light oil resource play is located directly south of the more advanced Garrington Cardium trend. Industry activity has increased significantly at Lochend, with seven new horizontal Cardium wells successfully drilled and completed in the Lochend light oil resource trend by leading Cardium producers in the last few months.
TriOil commenced its initial 4 well (2.65 net) horizontal Cardium drilling program at Lochend in August. The company's first horizontal Cardium well (55% working interest) at Lochend has been successfully drilled and is currently waiting on a multi-stage fracture completion. The remaining 3 wells in this program are being drilled in succession with the same drilling rig and the second well in the program is expected to spud this week.
TriOil is a Calgary, Alberta based company engaged in the exploration, development and production of petroleum and natural gas. The Acquisition represents a significant progression of management's business plan to build a high quality oil asset base with a focus on horizontal drilling and multi-frac completion applications. TriOil's growth strategy follows a balanced combination of exploitation, exploration and strategic acquisitions that increase the company's growth platform and oil weighting.
TriOil trades on the TSX Venture Stock Exchange under the symbol "TOL". At August 16, 2010, there were approximately 25.4 million shares issued and outstanding (27.0 million fully diluted).
This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (together, "forward-looking information"). The use of any of the words "will", "are being", "expected" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information concerning the completion of the Acquisition and the anticipated timing of TriOil's drilling program.
The forward-looking information are based on certain key expectations and assumptions made by TriOil, including expectations and assumptions concerning timing of receipt of required regulatory and other approvals and the satisfaction of other conditions to the completion of the transactions contemplated above. Although TriOil believes that the expectations and assumptions on which the forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because TriOil can give no assurance that they will prove to be correct.
Since forward-looking information addresses future events and conditions, by its very nature it involves 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 that required regulatory, exchange and third party approvals and consents are not obtained on terms satisfactory to the parties within the timelines provided for in the this news release and risks that other conditions to the completion of the transactions and operations contemplated herein are not satisfied on the timelines set forth in this news release or at all.
Although TriOil believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because TriOil can give no assurance that they will prove to be correct. The foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information contained in this press release is 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.
Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio 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. Figures quoted may not add exactly due to rounding.
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.
SOURCE TriOil Resources Ltd.
For further information: For further information: Russell J. Tripp, President & CEO, TriOil Resources Ltd., Phone: (403) 265-4115