TRAFINA Energy Ltd.

TRAFINA Energy Ltd.

October 29, 2009 08:30 ET

Trafina Energy Ltd. Offers to Purchase Debt and Security, Negotiates Farm-In Agreement on Cardium Oil Well

CALGARY, ALBERTA--(Marketwire - Oct. 29, 2009) -


Trafina Energy Ltd. (TSX VENTURE:TFA.A) ("Trafina" or "the Company") is pleased to announce that it has offered to purchase from a Canadian bank all of the outstanding indebtedness and liabilities owing to the bank by a private Alberta oil and gas corporation and security documents granted by the debtor to the bank for aggregate consideration of $620,000.

Closing of the purchase is expected to occur on or about November 9, 2009 and is subject to the satisfaction of certain conditions including, without limitation, the settlement, release and discharge of certain encumbrances registered against the debtor's oil and gas assets, receipt of necessary regulatory approvals and approval of the TSX Venture Exchange.

The debtor's assets include a 100% working interest in more than 41 sections of land in southwest Saskatchewan. When the properties were shut-in in February 2009, production averaged approximately 160 barrels of oil equivalent per day (boe/d), consisting of approximately 120 barrels per day (bbl/d) of oil and 240 thousand cubic feet (Mcf/d) of natural gas.

Following closing, Trafina intends to make an application to the court to appoint a receiver to realize on its security. It is not known at this time if a receiver will be appointed.

Trafina is also pleased to announce that it has agreed to farm-in on a multi-zone horizontal oil well in the Pembina area with the operator who holds a 50% interest in the targeted lands. Trafina will pay 100% of the drilling costs to earn a 65% (net 32.5%) interest in the oil well. The well is expected to be drilled prior to the end of 2009.

About Trafina

Trafina is a junior oil and gas company based in Calgary, Alberta. The Company's main area of interest is in Wetaskiwin with operated production in Retlaw and Ronalane in Alberta and the McGuffin area in Saskatchewan. Trafina also has non-operated production in Viking /Kinsella, Alberta and minor interests in Jenner, Carson Creek/ Judy Creek and Bindloss, Alberta. Trafina's shares trade on the TSX Venture Exchange under the stock symbol TFA.A.

Basis of Presentation and Cautionary Statement: Information in this press release expressed in barrels of oil equivalent (boes) is derived by converting natural gas to oil in the ratio of six thousand cubic feet (Mcf) of natural gas to one barrel (bbl) of oil. Boes 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.

Forward Looking Statements: This news release contains forward looking statements and forward looking information based on management's current expectations regarding, among other things, the purchase of the Security and Debt and the date for closing such purchase, the appointment of a receiver and the ability of the Company to realize on its security, the production from the Debtor's assets and the farm-in on the oil well (including, without limitation, the anticipated dates for drilling and completion of the oil well). Readers are cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Forward looking statements involve significant known and unknown risks and uncertainties. Reference is made to Trafina's annual information form for the year ended December 31, 2008 dated April 27, 2009 for a description of some of the risks that could affect the Company's future results and could cause results to differ materially from those expressed in the Company's forward looking statements. The forward looking statements contained in this news release are made as at the date hereof and, except as required by applicable securities laws, Trafina does not undertake any obligation to update publicly or otherwise any such statements.

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.

Contact Information

  • Trafina Energy Ltd.
    Kelly J. Ogle
    President and Chief Executive Officer
    (403) 263-0800
    (403) 263-0811 (FAX)
    Trafina Energy Ltd.
    Robert W. Lamond
    (403) 269-9889
    (403) 269-9890 (FAX)