TriOil Resources Provides Operational Update

    




 CALGARY, Oct. 9, 2012 /CNW/ - TriOil Resources Ltd.  is pleased to provide a third quarter operational  update. 

 Production and 2012 Guidance 

 Current production based on field estimates exceeds 2,500 boe/d (80% oil  and NGL's).  The Company's current productive capability (current  production plus completed wells in the process of being brought on  stream) exceeds 2,900 boe/d (80% oil and NGL's), with an additional 3  (1.9 net) wells waiting on completion and 5 (3.4) net additional wells  planned in the fourth quarter. TriOil remains on track to meet its 2012  exit production target of 3,400-3,600 boe/d (80% oil and NGL's). 

 Drilling results have met or exceeded expectations, however,  unseasonably wet field conditions at Kaybob during the first half of  the third quarter coupled with off-line production at Lochend due to  pipeline installation activity and the start-up of the TriOil operated  Lochend gas plant expansion have resulted in slightly lower than  anticipated third quarter average production. As a result, we expect  2012 annual average production at the lower end of the Company's  2,300-2,500 boe/d forecast. 

 Lochend Cardium Operations 

 The Company's Lochend Cardium program continues to deliver strong  results and steadily improving capital efficiencies. To date TriOil has  implemented 11 slick water stimulations in the Central/Western Cardium  trend with an average IP30 of 328 boe/d (80% oil). 

 TriOil continues to optimize drilling techniques and completion designs.  Our last 7 horizontal wells have all been drilled monobore with invert  mud systems. Drilling times have been reduced by an average of 4 days.  TriOil recently implemented hybrid fracs on 2 Lochend area wells with  encouraging early results and plan to apply these modified frac designs  to future development drilling operations within the pool. 

 TriOil successfully participated in the drilling of the first long-reach  horizontal oil well (over 2,800 meters open in the Cardium "A") in the  Lochend region (TOL 50%) and completed the well with a 40 stage hybrid  frac during the third quarter.  After milling out the ball seats/sand  blockages in the heel of the wellbore the well tested at an average of  approximately 730 boe/d (630 bopd) over an 8 day production test  period. The operator plans to bring the well on production in late  October and produce the well for a few months to determine productivity  from the milled out heel section of the horizontal leg, prior to  drilling out the toe section and bringing the entire wellbore on  production.  We are encouraged by the early results of this well and  plan to drill 2 additional long-reach horizontal wells in the first  half of 2013. 

 With the effective utilization of multi-well pads, monobore drilling  technologies, hybrid frac designs and long reach horizontals at  Lochend, we expect that production rates, recoveries and capital  efficiencies will continue to improve. 

 In the third quarter of this year, TriOil drilled 4 (2.4 net) horizontal  oil wells at Lochend and successfully completed all 4 wells. Three (2.0  net) of these wells were drilled on the higher productivity  Central/Western Lochend Cardium trend and 1 (0.4 net) well was drilled  on the Eastern Lochend Cardium trend. The first well (TriOil 50%)  averaged 275 boe/d (80% oil) over its initial 30 calendar days of  production and is currently producing at 330 boe/d (60% oil) in its  second month. The second well (TriOil 40%) was completed with a hybrid  frac and is the best well drilled to date on the Eastern Lochend  Cardium trend, averaging 250 boe/d (96% oil) over its initial 23  calendar days of production. The remaining 2 (1.5 net) wells, including  our first long-reach horizontal oil well, are both located in  Central/Western Lochend and are expected to commence production late  October. TriOil plans to drill 2(1.2 net) additional horizontal oil  wells at Lochend in the fourth quarter of this year. 

 TriOil acquired an additional 14 sections of Crown land on the  Central/Western Lochend trend at a recent Alberta land sale, increasing  our land position 96 (70 net) sections on the Lochend Cardium light oil  resource play. Our current Lochend drilling inventory stands at 150 (97  net) horizontal development locations, which does not include any  locations on the newly acquired Southern Lochend landblock.  There is  potential to add an additional 80 net locations to our drilling  inventory with successful step-out drilling along the Cardium trend. 

 We recently completed a 15 mmcf/d expansion of the TriOil Lochend gas  plant (TOL operated; TOL 51%) to 20 mmcf/d and expect to commission the  new facilities in mid-October. The expanded  facilities will allow a  number of shut-in or constrained Cardium wells to come on stream and  will accommodate TriOil and industry Cardium gas volumes at Lochend for  the foreseeable future. We also expect that the new facilities will  improve our NGL recoveries and drive lower operating costs for TriOil. 

 Kaybob Operational Update 

 The Kaybob Dunvegan light oil play has contributed significant new  production and reserves since TriOil's first well on the play in late  2011. Our first 10 horizontal Dunvegan oil wells have delivered average  IP30 rates of 318 boe/d (80% oil and NGL's), and we are pleased to  announce the most recent well (TOL 25%) achieved an IP30 of 326 boe/d  (60% oil) during the third quarter. 

 Although field activities were hampered by unseasonably heavy rainfall  in July and August, TriOil has been very active in the field over the  last few months. We recently brought 3 (2.1 net) oil wells on  production and have 4 (2.9 net) wells waiting on completion/production  operations. TriOil plans to drill 2 (1.5 net) additional horizontal oil  wells at Kaybob in the fourth quarter of this year. 

 Recent Financing and 2012 Capital Program 

 TriOil closed a $28 million bought deal financing on October 4, 2012,  issuing 7,845,000 common shares at a price of $2.55 per share and  2,917,288 flow-through common shares at a price of $3.00 per share. Our  2012 Capital Budget has been increased by $17.5 million to $117.5  million to provide for the recent South Lochend land acquisition. 

 Crude Oil Hedging 

 TriOil maintains an active crude oil hedging program in order to  stabilize average realized sales prices and protect the Company's  forecast cash flow and planned capital program. During the third  quarter we layered in additional Canadian dollar denominated fixed  priced oil swaps for 2012 and 2013. In aggregate, the Company has now  hedged 900 bbls/d of crude oil with a fixed weighted average price of  $97.94 Canadian per bbl for 2012 and 800 bbls/d of crude oil with a  fixed weighted average price of $101.93 Canadian per bbl for 2013. 

 Outlook 

 With a growing cash flow and production base as we near our 3,500 boe/d  2012 exit target, a very healthy balance sheet, a significant drilling  inventory and operational presence in two high netback light oil  resource plays, evolving technical improvements to our drilling and  completion programs, steadily improving capital efficiencies and  decreasing operating costs, TriOil has established a strong growth  platform for 2013 and beyond. 

 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, 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, 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. 

TriOil Resources Ltd.


CONTACT:  Russell J. Tripp, President & CEO, TriOil Resources Ltd.; CheryneLowe,VP Finance & CFO, TriOil Resources Ltd.; Andrew Wiacek, VP Exploration,TriOil Resources Ltd.; Corporate Phone: [phone] 


    

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