TriStar announces acquisition of private company; complimentary asset acquisition; and upward revision to 2008 guidance


    Toronto Stock Exchange Symbol "TOG"

    CALGARY, Nov. 19 /CNW/ - TriStar Oil & Gas Ltd. ("TriStar" or the
"Company") is pleased to announce that it has agreed to acquire, by
amalgamation, all of the issued and outstanding shares of Kinwest Corporation
(the "Private Company"), for total consideration of $92.5 million including
the assumption of $12.5 million of net debt (the "Proposed Transaction").
Under the terms of the agreement, TriStar will issue 8.0 million common shares
to shareholders of the Private Company.
    The Boards of Directors of both TriStar and the Private Company have
unanimously approved the Proposed Transaction. The Private Company Board has
concluded that the Proposed Transaction is in the best interests of its
shareholders, and has resolved to recommend that Private Company shareholders
vote their securities in favour of the Proposed Transaction.
    The Board of Directors, management and certain shareholders of the
Private Company, representing greater than 50 percent of the shares
outstanding, have entered into hard lock-up agreements to vote their
securities in favour of the Proposed Transaction. Closing is expected to occur
in January 2008, subject to regulatory approval, approval of the Private
Company's shareholders and certain other conditions.
    TriStar is also pleased to announce that it has concurrently entered into
an agreement to acquire certain additional complimentary assets from an
unrelated third party for cash consideration of $11 million, subject to
certain closing adjustments (the "Asset Acquisition"). Closing of the Asset
Acquisition is expected to occur prior to year end 2007.
    The assets being acquired by TriStar in the two transactions are
primarily located in TriStar's Southeast Saskatchewan core area. Combined
production is more than 1,150 boepd (80 percent light oil) with 4.0 Mmboe of
proven plus probable reserves (based on TriStar internal estimates). The
production is 90 percent operated and is comprised of long life, high netback,
light oil production offsetting TriStar's current operations in Southeast
    Approximately half of the production being acquired by TriStar originates
from a large, operated, 65 million barrel oil in place light oil pool with a
low recovery factor to date. TriStar has identified up to 50 (25 net)
development locations to be drilled in this pool representing unrisked upside
potential of 2.5 million barrels of reserves net to TriStar.
    In addition, as part of the transactions, TriStar gains exposure to an
additional 25 net sections (100% working interest) of Bakken prone acreage.
TriStar has identified 97 net Bakken drilling locations on the acquired
acreage based on four wells per section representing unrisked upside potential
of over 10 million barrels of reserves net to TriStar.
    With closing of the transactions, TriStar will have exposure to 79 net
sections of land on the Southeast Saskatchewan Bakken light oil play
representing 540 (313 net) Bakken drilling locations based on four wells per
    In total, TriStar has identified 151 (126 net) drilling locations on the
assets being acquired, all located in Southeast Saskatchewan, and therefore,
unaffected by the proposed changes in Alberta's royalty regime.

    Upon completion of the Private Company acquisition, which is scheduled to
close in January 2008, TriStar will be revising upward management's previously
announced guidance of 15,350 boepd for average 2008 production and
16,000 boepd for 2008 exit production.
    TriStar now anticipates 2008 average daily production of more than
16,250 boepd, comprised of greater than 70 percent high quality, long life,
light oil, with a 2008 production exit rate of more than 16,750 boepd.
    Upon the closing of the Private Company acquisition, TriStar will have
the following corporate characteristics:

    High Quality Assets:     High netback (Q3 op netback =
                             $35.08), 85 percent operated, light oil and
                             natural gas reserves and production focused in
                             four core operating areas

    Long Life Reserves:      greater than 51 mmboe (P+P); RLI of over
                             9 years

    High Quality Production: Average Rate 2008 (E) greater than 16,250 boepd
                             (greater than 70% light oil)
                             Exit Rate 2008 (E) (greater than)16,750 boepd
                             (greater than 70% light oil)

    Estimated Net Debt:      less than $245MM; 1.3 times cash flow
                             (US$75 WTI, $6.75 AECO)

    Shares Outstanding:      76.5 MM (B); 80.9 MM (FD)

    Significant Upside:      greater than 1,500 locations
                             greater than 700,000 net acres of undeveloped

    In conjunction with the transaction, TriStar has entered into a costless
collar hedge of 250 barrels of oil per day with a floor price of US$80.00 and
a ceiling price of US$97.05 for the period January 1, 2008 through
December 31, 2008 and a costless collar hedge of 250 barrels of oil per day
with a floor price of US$75.00 and a ceiling price of US$96.05 for the period
January 1, 2008 through December 31, 2009.

    TriStar Oil & Gas Ltd. is a Calgary based company active in the
acquisition, exploration, development and production of crude oil and natural
gas in Western Canada.

    Warning about Forward-Looking Statements

    This press release contains forward-looking statements. More
particularly, this press release contains statements concerning the potential
reserves associated with the announced acquisitions, TriStar's projected
average annual and exit rates of production of oil and natural gas for 2008
and estimated net debt following closing of the announced acquisitions.
    The forward-looking statements are based on certain key expectations and
assumptions made by TriStar, including expectations and assumptions concerning
prevailing commodity prices and exchange rates, availability and cost of
labour and services, the timing of receipt of regulatory approvals, the
performance of existing wells, the success obtained in drilling new wells, the
performance of new wells and the sufficiency of budgeted capital expenditures
in carrying out TriStar's planned activities.
    Although TriStar 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 TriStar 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, the 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. These risks are set out in more
detail in TriStar's annual information form for the year ended December 31,
2006, which can be accessed at
    The forward-looking statements contained in this press release are made
as of the date hereof and TriStar 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 and Boepd

    When used in this press release, boe means a barrel of oil equivalent on
the basis of 1 boe to 6 thousand cubic feet of natural gas. Boepd means a
barrel of oil equivalent per day.
    Boe's may be misleading, particularly if used in isolation. A boe
conversion ratio of 1 boe for 6 thousand cubic feet of natural gas is based on
an energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.
    This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities in any jurisdiction. The common
shares offered have not and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or any state
securities laws and many not be offered or sold in the United States except in
certain transactions exempt from the registration requirements of the U.S.
Securities Act and applicable states securities laws.


    %SEDAR: 00025796E

For further information:

For further information: Brett Herman, President and Chief Executive
Officer, TriStar Oil & Gas Ltd., Telephone: (403) 268-7800, Fax: (403)
218-6075; Jason J. Zabinsky, Vice President, Finance and Chief Financial
Officer, TriStar Oil & Gas Ltd., Telephone: (403) 268-7800, Fax: (403)

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TriStar Oil & Gas Ltd.

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