TriOil Resources Announces 2013 Capital Budget and Business Plan
and Appointment of a Special Committee
CALGARY, Feb. 7, 2013 /CNW/ - TriOil Resources Ltd.
("TriOil" or the "Company") (TSX-V: TOL) is pleased to announce
that the Company's Board of Directors has approved a capital
expenditure program of $93 million
for 2013 (the "2013 Capital Budget"). TriOil also announces that
its Board of Directors have formed a committee of independent
directors (the "Special Committee") to conduct a strategic review
of the Company's business plan and to consider additional means to
enhance shareholder value.
Capital Budget and Guidance
The 2013 Capital Budget will focus on the
development of TriOil's Cardium and Dunvegan light oil plays and provides
continued production growth while maintaining the Company's strong
financial position. Approximately 45% of the 2013 Capital Budget
will be directed to our Cardium light oil resource play at Lochend
to drill 15 (8.9 net) Cardium horizontal wells and participate in
an expansion of the recently constructed central oil battery.
Kaybob will receive approximately 49% of the 2013 Capital Budget,
with 11 (6.9 net) Dunvegan
horizontal wells planned for the year and a strategic asset
acquisition. The drilling and completion expenditure component of
TriOil's 2013 Capital Budget is projected to approximate
$73 million, with the remaining
budgeted funds of approximately $20.4
million allocated towards investments in well-site
equipment, field facilities, gathering lines and strategic
asset/undeveloped land acquisitions.
Based on execution of the capital program
anticipated in the 2013 Capital Budget, average daily production
for fiscal 2013 is projected to range from 3,900 to 4,100 boe/d,
weighted approximately 75% light crude oil and NGLs. This
forecasted production range represents an 83% to 93% increase (54%
and 62% increase on a per share basis) over the Company's 2012
average daily production estimate. The 2013 forecast exit
production rate is expected to be approximately 4,400 boe/d,
representing a greater than 25% increase from our 2012 exit rate of
3,450 boe/d.
The Company's funds from operations for 2013 is
estimated at $0.90 per basic share or
$57 million in aggregate, which
represents a significant increase of greater than 125% over
projected 2012 funds from operations. Field operating netbacks
(before hedging) for 2013 are forecasted at approximately
$40/boe compared to the estimated
$37/boe for 2012 as the Company's oil
weighting continues to increase and operating costs are further
reduced.
The capital program planned in the 2013 Capital
Budget will be financed by funds from operations and utilization of
the Company's existing credit facilities and allows TriOil to
maintain its strong financial position. The Company's year-end 2013
net debt is estimated at $60 million,
approximately 1.1 times forecasted 2013 funds from operations and
1.0 times forecasted 2013 fourth quarter annualized cash flow.
TriOil has a strong commodity hedge position in place to support
the 2013 Capital Budget, with 1,300 bbls/d of crude oil hedged at a
fixed weighted average price of C$99.51/bbl WTI from February-December 2013 and 1,000 gj/d of natural gas
hedged at a fixed price of C$3.41/gj
for 2013. The 2013 Capital Budget assumes current forward pricing
assumptions of US$90.00/bbl WTI and
AECO natural gas price of C$3.00/gj.
Business Plan
Consistent with the Company's growth strategy,
TriOil has acquired large undeveloped land positions in highly
prospective emerging light oil resource plays and built the
necessary production facilities and infrastructure to establish a
strong operational presence in these plays. TriOil has executed
this plan effectively and this strategy has proved very successful.
With strong operational results in 2012 on the Company's two proven
light oil plays, a multi-year drilling inventory exceeding 130 net
development locations and a significant investment in land,
production facilities and infrastructure behind us, TriOil is
poised to drive strong per share growth in 2013 and several years
beyond.
TriOil's first successful horizontal
multi-stage, slick water completion in the higher impact
Central/West Lochend Cardium light oil resource play came on
production in mid 2011 and we announced our first successful
horizontal multi-stage completion in the Kaybob Dunvegan light oil
play in the fourth quarter of 2011. These two drilling events
set the stage for the significant capital program we were able to
execute in 2012. From a production base of 1,200 boe/d (50% oil and
NGLs) in mid 2011, TriOil has grown production organically by 188%
to 3,450 boe/d (70% oil and NGLs) at year end 2012 and we are
forecasting continued strong growth to 4,400 boe/d (75% oil and
NGLs) at year end 2013.
The Company is now well positioned on two
top-tier light oil plays at Lochend and Kaybob. Both projects are
delivering strong production growth, top-quartile netbacks and
solid capital efficiencies and provide TriOil repeatable, scaleable
light oil development drilling programs for the next several
years.
Appointment of Special Committee of
Independent Directors
TriOil also announces that its board of
directors have formed a committee of independent directors to
conduct a strategic review of the Company's business plan.
The board of directors is committed to acting in the best interests
of the Company and its shareholders. The Company believes
that the Company's business plan and long term strategy will
continue to provide value to shareholders. The strategic
review to be undertaken by the Special Committee will consider
additional means to enhance shareholder value.
TriOil is a Calgary,
Alberta based company engaged in the exploration,
development and production of petroleum and natural gas. TriOil has
approximately 64.0 million common shares issued and outstanding
(70.1 million fully diluted). The common shares of TriOil trade on
the TSX Venture Exchange under the symbol TOL.
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 and expectations about the
Company's 2013 capital program.
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, 2012 and 2013,
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.
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.
SOURCE TriOil Resources Ltd.