CALGARY, March 20, 2012 /CNW/ - TriOil Resources Ltd. ("TriOil" or the "Company") (TSX:TOL) provides an update on its light oil operations at Kaybob and Lochend.
Kaybob Dunvegan Operations
- From a standing start in this new Dunvegan light oil play in October, 2011, TriOil has now drilled 5 (2.2 net) horizontal wells and has commenced drilling operations on 2 (1.25 net) additional wells at Kaybob. TriOil is the operator on 6 (3.15 net) of its initial 7 wells on the play and has recently licensed 5 (2.38 net) horizontal wells that we expect to drill as soon as access will allow. In addition, the Company will be participating in 2 (0.66 net) non-operated wells at Kaybob that should be drilled prior to or immediately after breakup.
- TriOil previously announced early production results of its first well at Kaybob (drilled and completed in 2011) and we are pleased to update its performance. The well achieved an IP90 rate of 480 boe/d (87% oil) and has produced over 37,000 barrels of oil to date.
- The first well in our 2012 drill program (test rate of 668 boe/d, 95% oil) recorded an IP30 rate of 351 boe/d (88% oil) and has produced over 10,000 barrels of oil to date.
- TriOil is very pleased to announce that our second well in our 2012 program at Kaybob (TOL 25%) production tested over a 3 day period at an average rate of 1,178 boe/d (73% oil). The well has averaged 494 boe/d (78% oil) to date in its first two weeks of production.
- The Company is also very pleased to report that the third well in our 2012 program at Kaybob (TOL 60%) production tested over a 3 day period at an average rate of 725 boe/d (91% oil). The well is expected to be on production in early April.
- No formation water has been produced from any of the wells.
- The fourth well in our 2012 program at Kaybob (TOL 50%) has been drilled and is expected to be completed next week, and drilling operations are underway on 2 (1.25 net) additional operated wells. Completion operations on both of these wells will be dependent on breakup timing.
- TriOil has a strong land position on this rapidly developing light oil play. The Company 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 with a drilling inventory of approximately 55 net locations.
- The Company currently has one rig contracted for its Kaybob horizontal drilling program but expects to have 2 operated rigs drilling at Kaybob at various times during the year.
Lochend Cardium Operations
- TriOil has conducted an active drilling and completion program at Lochend in the first quarter of 2012. To date the Company has operated the drilling of 3 (1.74 net) horizontal Cardium wells, 2 (1.24 net) of which have been completed and 1 (0.5 net) is scheduled for completion next week. Road bans were placed on most secondary roads at Lochend on March 12 and, as a result, TriOil does not expect to operate the drilling of any additional wells at Lochend until after breakup. The Company had also expected to participate in 4 (1.63 net) non-operated wells at Lochend in the first quarter of 2012. The first non-operated well (0.34 net) is currently drilling and we expect that 2 additional non-operated wells (0.84 net) that are not impacted by road bans should spud during April. The remaining non-operated well is expected to commence drilling after breakup.
- TriOil announced on January 29, 2012 that its last well in the 2011 Lochend program (completed in early 2012) had production tested at 650 boe/d (83% oil) over 4 days. We are pleased to report that this well achieved an IP30 rate of 327 boe/d (79% oil) and is producing at a rate of 190 boe/d (78% oil) in its second month. The well has produced 8,100 barrels of oil to date.
- The Company is also pleased to announce the results of 2 additional operated wells at Lochend. The first well (TOL 30%) in our 2012 program production tested at 236 boe/d (86% oil) over 4 days and has just been brought on production. The second well (TOL 97%) in our 2012 program production tested at 464 boe/d (89% oil) over a 3 day test and has been placed on production this week.
- TriOil is currently drilling 1 (0.34 net) non-operated well and expects that 2 (0.84 net) additional non-operated wells will commence drilling in April.
- TriOil has a drilling rig contracted for its operated Lochend horizontal program and expects that this rig will drill continuously for the balance of the year. The Company also plans to participate in a number of non-operated wells at Lochend in 2012.
- TriOil has assembled a significant land position on the Lochend Cardium light oil resource play (80 gross (55 net) sections) and has an identified development drilling inventory of approximately 68 net horizontal wells at Lochend.
Key Production Results
- The following table sets out gross light oil test rates, production rates and cumulative production on TriOil's Dunvegan wells at Kaybob and the Company's Cardium wells at Lochend:
Well & TOL
|#1 (30%)||438||326||258||223||90 (8th mth)||74||26,000|
|#2 (50%)||700||368||315||291||171 (5th mth)||50||22,000|
|#3 (20%)||1320||657||534||420||253 (4th mth)||82||34,000|
|#4 (68%)||569||425||326||-||160 (3rd mth)||78||15,200|
|#5 (68%)||724||418||329||-||218 (3rd mth)||82||16,900|
|#6 (60%)||650||327||-||-||190 (2nd mth)||78||8,100|
|#7 (30%)||236||-||-||-||220 (1st mth)||84||1,400|
|#8 (96.9%)||464||-||-||-||300 (1st mth)||94||1,500|
|#1 (30%)||1800||795||597||480||214 (4th mth)||90||37,700|
|#2 (55%)||668||351||-||-||422 (2nd mth)||80||10,700|
|#3 (25%)||1178||-||-||-||415 (1st mth)||75||7,200|
Year End Results and 2012 Guidance
TriOil plans to release its year-end results and 2012 guidance on April 8, 2012.
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 March 20, 2012, there were approximately 53.2 million shares issued and outstanding (58.3 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, expected timing of providing 2012 guidance 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, 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.
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