Torquay Oil Corp.
TSX VENTURE : TOC.A
TSX VENTURE : TOC.B

November 22, 2010 17:23 ET

Torquay Announces Q3 2010 Results and Files Final Prospectus

CALGARY, ALBERTA--(Marketwire - Nov. 22, 2010) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES, TO UNITED STATES NEWS WIRE SERVICES OR TO UNITED STATES PERSONS.

Torquay Oil Corp. (TSX VENTURE:TOC.A)(TSX VENTURE:TOC.B) ("Torquay" or the "Company") is pleased to announce that it has filed its unaudited financial statements and related Management's Discussion and Analysis ("MD & A") for the three and nine months ended September 30, 2010. The Company's unaudited financial statements and related MD & A are available for review at www.torquayoil.com or www.sedar.com. Torquay is also pleased to announce that it has filed its final prospectus in respect of its previously announced $15 million bought deal financing, which is expected to close on November 30, 2010. In addition, Torquay is pleased to provide an update on its operating activities in southeast Saskatchewan.

Q3 Highlights

During the third quarter of 2010 Torquay began producing oil from its drilling program at Lake Alma, Saskatchewan. As well, production from its Viewfield, Saskatchewan acquisition was also realized during this quarter. Other highlights of the quarter include:

  • Generated funds flow from operations of $598,028 ($0.02 per share fully diluted)
  • Daily production averaged 202 boe/d (95% oil & NGL's) with a September 30, 2010 exit rate of approximately 600 boe/d
  • Realized average field netbacks of $49.88 per boe with a sales price averaging approximately $68.97 per boe
  • Completed and brought on production two Bakken light oil discoveries at Lake Alma
  • Drilled, completed and brought on production three oil wells in the Viewfield area since acquiring the property in July, 2010

Operations Update

Lake Alma, SE Saskatchewan

Torquay has finished drilling its fifth horizontal Bakken well in the Lake Alma area. The well was drilled to 3,700m measured depth in 16 days including the installation of the frac liner. Completion operations have begun with initial flow results expected by early December. This will be the first well in which Torquay implements a larger fracture stimulation to improve both the initial and long term deliverability of the Bakken in this area. The first two oil wells drilled in the Bakken by Torquay were completed utilizing an 8-10 tonne/stage fracture stimulation. This well will be completed with a minimum 20 tonne/stage fracture stimulation. Torquay will continue evaluating further increases in the fracture size as it deems necessary.

Torquay has also entered into a farmin agreement with a second major industry partner whereby the Company could earn up to 5.75 sections of land (3,680 acres) at a 100% working interest. The first well will test the Bakken and Ratcliffe Formations and is expected to commence drilling by the first week of December. Upon satisfaction of the earning terms, Torquay's overall land position will increase to over 58,000 gross (36,680 net) acres in the Lake Alma area.

Viewfield, SE Saskatchewan

To date Torquay has drilled four 100 % working interest wells in the Viewfield area (100% success). Two wells are producing from the Bakken Formation and two wells are producing from the Frobisher Formation. Torquay is pleased with the results to date and intends to shoot a small 3D seismic program in 2011 to help further exploit the Frobisher. Torquay currently has 12 development wells in inventory and will continue to develop the Frobisher over the next 12-18 months.

Willmar, SE Saskatchewan

The Corporation has acquired approximately six contiguous sections (3,840 acres) through freehold leasing and a seismic option agreement with two industry partners. A 3D seismic program is currently underway and is expected to be completed by mid December. Torquay is targeting conventional light oil in the Frobisher-Alida Beds.

Torquay is a uniquely positioned, oil focused, junior exploration company formed to generate and develop its own prospects, acquire oil weighted properties and participate with joint venture partners in oil exploration and development in the Western Canadian Sedimentary Basin. The Company's Class A Shares and Class B Shares trade on the TSX Venture Exchange under the symbols TOC.A and TOC.B. The Company currently has 23,740,572 Class A Shares and 1,260,000 Class B Shares outstanding.

FORWARD LOOKING STATEMENTS:

This news release contains forward-looking statements and forward-looking information (collectively "forward looking information") within the meaning of applicable securities laws. Forward-looking information typically use words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. In particular, forward looking information in this news release includes, but is not limited to: statements with respect to closing of the financing, drilling, completion and seismic program plans and timing and earning of lands. The forward-looking information is based on certain key expectations and assumptions made by Torquay, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future well production rates and estimates of operating costs; reserve and resource volumes; the state of the economy and the exploration and production business; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and the ability of the Company to access capital. Although Torquay 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 Torquay 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, results from operations will not meet with expectations and risks associated with the oil and gas industry generally. Additional information on the foregoing risks and other factors that could affect Torquay' operations and financial results are included in Torquay's annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements contained in this news release are made as of the date hereof and Torquay 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. The term BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Torquay Oil Corp.
    Mr. Brent McKercher
    President & Chief Executive Officer
    403 233 2444 ext. 30
    403 262 6991 (FAX)
    brent@torquayoil.com
    or
    Torquay Oil Corp.
    Mr. Darwin Little
    Vice President, Finance & Chief Financial Officer
    403 233 2444 ext. 31
    403 262 6991 (FAX)
    darwin@torquayoil.com
    www.torquayoil.com