TRAFINA Energy Ltd.
TSX VENTURE : TFA.A

TRAFINA Energy Ltd.

November 18, 2010 08:30 ET

Trafina Announces Strategic Land Purchase

CALGARY, ALBERTA--(Marketwire - Nov. 18, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Trafina Energy Ltd. ("Trafina" or the "Company") (TSX VENTURE:TFA.A) is pleased to announce that it has entered into a Definitive Agreement (the "Agreement") with a private oil and gas company whereby Trafina will purchase for cash an undivided 100 percent working interest in certain lands in northeastern Alberta. The Agreement also provides Trafina with the opportunity to earn a 25 percent net interest in additional lands.

The Agreement provides Trafina with access to approximately 24,000 gross acres (18,100 net acres) or approximately 37.5 gross sections (28.25 net sections) of undeveloped land. The lands are prospective for Wabiskaw heavy oil, and are on trend with an emerging large scale development by a large, integrated entity. In addition to the purchase of 100 percent of 15,680 acres (24.5 sections), Trafina has committed to drill two wells (one net) to earn 50 percent of the farmor's working interest in an additional 13 sections of the lands, with the farmor retaining a 25 percent net interest. The Agreement provides that the first well will be spud on or before March 31, 2012. Closing is scheduled to occur on or about November 30, 2010.

The initial work plan provides for the drilling of up to four evaluation wells during the upcoming winter season. After an evaluation period, estimated to be a minimum of six months, an additional 32 slant-type wells may be drilled from the four existing well pads during the winter 2011-12 drilling season. If successful, Trafina believes this program has the potential to turn the company into a junior heavy oil producer.

Based on available information, there are approximately 60 analogous wells in the township adjacent to the area Trafina has identified for its initial three-section development. The average rate for the analogous wells is approximately 40 barrels of oil per day per well for the first year.

About Trafina

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

Forward Looking Statements: This news release contains forward looking statements and forward looking information based on management's current expectations regarding the proposed closing of the land purchase, timing and success of drilling the two earning wells, the four evaluation wells, and the 32 slant-type wells. Operational forward looking information is based on management's expectations regarding future growth, results of operations, production, 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 annual information form for the year ended December 31, 2009 dated April 30, 2010 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)
    info@trafinaenergy.com
    or
    Trafina Energy Ltd.
    Robert W. Lamond
    Chairman
    (403) 269-9889
    (403) 269-9890 (FAX)