TRAFINA Energy Ltd.

TRAFINA Energy Ltd.

September 26, 2011 08:30 ET

Trafina Announces Sale of Pembina Assets for $1.7 Million in Order to Focus on McMullen Heavy Oil Development Play

CALGARY, ALBERTA--(Marketwire - Sept. 26, 2011) -


Trafina Energy Ltd. ("Trafina" or the "Company") (TSX VENTURE:TFA.A) is pleased to announce that it has entered into a definitive purchase and sale agreement whereby Trafina will sell its entire working interest in the Pembina Cardium area of Alberta for gross proceeds of $1.7 million. Closing is expected to occur on September 28, 2011. Based on the Company's current net production from the area of approximately 20 barrels of oil equivalent (boe) per day, the sale represents a value of $85,000 per flowing boe per day. Proceeds from the sale will be used for further development of the Company's heavy oil prospects in the McMullen area of northeast Alberta.

Trafina continues to monitor production of its first three wells at McMullen, which were drilled in July of this year. The wells continue to be produced at restricted rates in order to better understand the characteristics of the reservoir. Current production from the three wells is 75 barrels of oil per day. First oil sales occurred on September 5, 2011, less than one month after initial production and less than one year from initial land acquisition.

As previously disclosed, the Company awaits approval of a Primary Recovery Scheme application (PRSA) from the Energy Resources Conservation Board. The PRSA was filed on March 11, 2011 and has moved to the second phase of the process, awaiting ministerial approval. Once the PRSA is approved the Company plans to drill up to eight slant wells from one of the existing vertical well surface leases. Subject to timing of the PRSA and rig availability, the Company hopes to commence drilling of the slant wells in late November or early December 2011.

About Trafina

Trafina is a junior oil and gas company based in Calgary, Alberta. The Company's main areas of interest are in the McMullen area of Alberta and in the Rangeview and Divide areas of southwest Saskatchewan with other operated and non-operated production in Wetaskiwin. Trafina's shares trade on the TSX Venture Exchange under the stock symbol TFA.A and warrants trade under the stock symbol TFA.WT.A.

Basis of Presentation and Cautionary Statement: Information in this news release expressed in 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 the timing for closing the sale of Trafina's working interest in the Pembina Cardium area of Alberta, the timing of approval of the PRSA, the number of slant wells authorized under the PRSA and the timing for commencement of drilling and the number of future slant wells to be drilled. Operational forward looking information is based on management's expectations regarding actual production rates from the three McMullen wells, future growth in reserves and cash flow, results of operations, future commodity prices and foreign exchange rates, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, environmental matters, business prospects and opportunities and future economic conditions. 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 involves significant known and unknown risks and uncertainties. Reference is made to Trafina's revised annual information form for the year ended December 31, 2010 dated April 8, 2011 and management's discussion and analysis for the six months ended June 30, 2011 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)