TriOil Announces Successful Lochend Cardium Result, Provides Cardium
Operations Update and Announces Closing of Asset Acquisition at Lochend
CALGARY, Sept. 22 /CNW/ - TriOil Resources Ltd. ("TriOil" or the "Company") (TSXV:TOL) is pleased to announce its initial Cardium horizontal result at Lochend, provide an operational update on its Lochend/Cochrane drilling activity and confirm the completion of its previously announced acquisition of Cardium focused assets at Lochend, Alberta (the "Acquisition").
The closing of this Acquisition represents a significant step in the development of the Company's Lochend/Cochrane core property. It includes 14 net (22 gross) sections of prospective Cardium land, approximately 100 boe/d of production and 99% ownership and operatorship of strategic production facilities with 60 km of connected pipeline infrastructure. The total cash purchase price net of preliminary closing adjustments was approximately $8.2 million.
Since commencing operations in January, TriOil has executed a well defined growth strategy focused on building grass root positions on emerging light oil resource plays. The Company has invested significant capital on prospective acreage in the Lochend/Cochrane Cardium light oil resource play through Crown land sales and through strategic asset acquisitions with limited associated production and large undeveloped land positions. With the most recent Acquisition completed, TriOil has invested approximately $30 million at Lochend/Cochrane and has established a strong growth platform and operational presence on the emerging Lochend/Cochrane Cardium light oil resource play with:
- 80 gross (56 net) sections of prospective Cardium lands with high average working interests and operatorship of the majority of the acreage position; - 99% ownership and operatorship of a key 5 mmcf per day gas plant and 75 km of pipeline infrastructure; - a Cardium horizontal drilling inventory exceeding 150 net locations.
Cardium light oil potential on the Lochend/Cochrane trend continues to be proven up by very active competitor drilling programs on adjacent lands. Several Cardium horizontal wells have been drilled, completed and placed on production over the past few months by other Cardium operators on the play and the results of 3 Cardium wells have recently been press released.
TriOil has commenced an active Cardium horizontal drilling program at Lochend/Cochrane and is pleased to announce its initial Lochend Cardium result and provide an update on its Cardium operations:
- The first well in the program, in which TriOil has a 20 percent working interest, commenced production at a rate of approximately 700 boe/d post recovery of frac fluid and had a first month average production rate of approximately 180 bbl per day; - The second well in the program at 3-26-26-3 W5M was drilled horizontally 1,200 meters in the Cardium zone and has just been completed with a multi stage 20 tonne fracture stimulation. TriOil has a 55 percent working interest in the 3-26 well and production testing is currently underway on this well; - The third well in the program at 1-36-26-4 W5M was drilled horizontally 1,000 meters in the Cardium zone and a multi stage fracture completion is scheduled for the first week in October. TriOil has a 60 percent working interest in the 1-36 horizontal well; - The fourth well in the program has been licensed at 13-1-27-3 W5M and is expected to commence drilling in the last week of September. TriOil has a 50 percent working interest in the 13-1 horizontal well; - The fifth well in the program has been licensed at 1-10-27-3 W5M and is expected to commence drilling in the last week of September. TriOil has a 30 percent working interest in the 1-10 horizontal well; - The sixth well in the program has been licensed at 4-12-26-4 W5M and is expected to commence drilling in the third week of October utilizing the same drilling rig from the 13-1 horizontal well. TriOil has a 100 percent working interest in the 4-12 horizontal well.
All of the above wells are expected to be completed and on stream by the end of the year. Additional 2010 drilling operations are currently in the planning stages. TriOil has acquired surface leases for 2 (1.6 net) horizontal Cardium wells at Lochend/Cochrane.
TriOil management is encouraged by the early Cardium results at Lochend/Cochrane and believes that this core property will provide significant production and reserve growth for the Company for the next several years.
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 and the Bakken and Sanish oil trends in southeast Saskatchewan. TriOil has successfully executed its business plan thus far, growing its production, reserves and undeveloped land base over the early part of 2010 to position the Corporation for substantial future increases in production, reserves and shareholder value through exposure in these high quality resource plays.
TriOil trades on the TSX Venture Stock Exchange under the symbol "TOL". At September 22, 2010, there were approximately 25.4 million shares issued and outstanding (28.6 million fully diluted).
Cautionary Statements
The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions, of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that the Company will derive from them. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.
Any references in this news release to "first month average" production rates, "initial test" production rates and/or "flush" 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. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.
In this news release, reserves and production data are commonly stated in barrels of oil equivalent ("boe") using a six to one conversion ratio when converting thousands of cubic feet of natural gas ("mcf") to barrels of oil ("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or "ngls"). Such conversion may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on 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: For further information: Russell J. Tripp, President & CEO, TriOil Resources Ltd., Phone: (403) 265-4115
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