CALGARY, Jan. 29, 2012 /CNW/ - TriOil Resources Ltd. ("TriOil" or the "Company" -TSXV: TOL) reports continued strong results on the Company's Lochend Cardium and Kaybob Dunvegan light oil resource plays, confirms its 2011 production exit rate and provides an operations update.
- TriOil's Central and Western Lochend trend is yielding very strong Cardium results, with our first 3 slick water completions on this trend posting IP30 rates of approximately 326, 368 and 657 boe/d, IP 60 rates of 258, 315 and 512 boe/d and cumulative production of 23,400, 16,500 and 26,500 barrels of oil.
- The Company's Dunvegan oil play at Kaybob is off to an impressive start. We are very pleased to report that our first Kaybob well has averaged 795 boe/d over its initial 30 days, with cumulative production over 24,000 barrels of oil in its initial 40 days of production. Our second well on the play (TOL operated; 55% working interest) tested at an average rate of 668 boe/d (95% oil) over its initial 3 days of testing.
- Corporate production based on field estimates reached 1,950 boe/d (70% oil and natural gas liquids) in mid-December, in line with exit guidance. Additionally, the Company has completed 2 (1.15 net) wells that are being equipped for production and has 2 (0.55 net) wells that are scheduled for completion in early February.
Lochend Cardium Update
- The Central / Western Lochend Cardium trend continues to see considerable industry drilling activity and significant Cardium results by TriOil and industry, with 19 wells to date achieving IP30 rates of 300 to 800 boe/d.
- TriOil drilled and completed 5 gross wells on the Central / Western Cardium trend in the second half of 2011, all of which are performing well above our current Lochend Cardium type curve and in line with the strong industry results on the trend (see "Key Production Results").
- The Company plans to drill 7 (3.7 net) wells at Lochend in the first half of 2012. Our 2012 drilling program is on schedule with 1 (0.6 net) well drilled, completed and tested at an average rate of 650 boe/d over its initial 3 days of testing. The second well (30% working interest) in the program is drilled and awaiting completion in early February and the third well (100% working interest) is expected to commence drilling this week.
- TriOil owns a significant land position at Lochend (80 gross (55 net) sections). Based on the strong Cardium results posted by TriOil and industry along the higher impact Central / Western Lochend trend over the past year, TriOil has an identified development drilling inventory of approximately 50 (35 net) horizontal locations along this trend.
- A drilling rig is contracted specifically for our Lochend Cardium horizontal drilling program and we plan to run the rig continuously in 2012.
Kaybob Dunvegan Update
- TriOil participated in the first multi-stage horizontal completion on a new Dunvegan oil resource play at Kaybob in the fourth quarter of 2011. The well (30% working interest) has performed extremely well to date, averaging 795 boe/d (95% oil) in its initial 30 day period and yielding cumulative production of approximately 24,000 barrels of oil in its initial 40 days of production.
- TriOil previously announced plans to drill 7 (4.2 net) Dunvegan horizontal wells at Kaybob this winter. The first well (55% working interest) in our 2012 program has been drilled, completed and tested at an average rate of 668 boe/d over its initial 3 days of testing. The second well (25% working interest) in our 2012 program is drilled and awaiting completion in early February and the third well in this year's program is expected to commence drilling in early February.
- TriOil owns, or has the right to earn, interests ranging from 20 to 100 percent in approximately 50 gross (31 net) sections of Dunvegan rights in the greater Kaybob area.
- A drilling rig is contracted specifically for the Kaybob Dunvegan horizontal drilling program and we plan to run the rig continuously in 2012.
Key Production Results
- The following table sets out gross light oil test rates, production rates and cumulative production on TriOil's Cardium wells in Central/Western Lochend and our Dunvegan well at Kaybob:
| Cum Oil
|Central and Western Lochend|
|#1 (30%)||438||326||258||223||110 (7th mth)||23,400|
|#2 (50%)||700||368||315||-||217 (3rd mth)||16,500|
|#3 (20%)||1,320||657||512||-||330 (3rd mth)||26,500|
|#4 (68%)||569||4022||-||-||275 (1st mth)||8,600|
|#5 (68%)||724||4793||-||-||375 (1st mth)||7,900|
|#1 (30%)||1,800||795||-||-||475 (2nd mth)||24,000|
1 Includes gas volumes that are expected to be tied into TriOil operated facilities in 2012
2 25 days of production, flowing up 4.5" frac string
3 19 days of production, flowing up 4.5" frac string
The Company previously announced a $40 million capital program for the first half of 2012. This program will be focused entirely on light oil opportunities, with plans to drill 7 (3.7 net) Cardium horizontal wells at Lochend and 7 (4.2 net) Dunvegan horizontal wells at Kaybob prior to breakup.
Our 2012 program is off to a great start and we are very excited about the Company's growth prospects at Lochend and Kaybob. TriOil plans to provide full year 2012 production and capital spending guidance in conjunction with its 2011 results in early April and we look forward to providing additional information on the Company's progress over the next few months.
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 and Dunvegan 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 January 27, 2012, 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, expectations about the Company's 2012 capital program 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 and 2012, 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
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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6Mcf:1Bbl, utilizing a conversion on a 6Mcf:1Bbl basis may be misleading as an indication of value.
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 Lowe, VP Finance & CFO, TriOil Resources Ltd.; Andrew Wiacek, VP Exploration, TriOil Resources Ltd.; Corporate Phone: (403) 265-4115