TRAFINA Energy Ltd.

TRAFINA Energy Ltd.

April 23, 2007 18:55 ET

TRAFINA Energy Ltd. Annual Reserves Information and Operational Update

CALGARY, ALBERTA--(CCNMatthews - April 23, 2007) - TRAFINA Energy Ltd. (TSX VENTURE:TFA.A) ("TRAFINA") announces today it has filed its Reserves Data and Other Oil and Gas Information, including the statements and reports required under Form NI 51-101 F1, NI 51-101 F2 and NI 51-101 F3, pursuant to National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities for the year ended December 31, 2006. Copies of the filings can be obtained electronically via SEDAR at or by emailing TRAFINA at

TRAFINA's net proved and probable reserves as at December 31, 2006, as evaluated by McDaniel and Associates Consulting Ltd. based upon forecast prices and costs, were 101.0 MBbls of oil & NGLs (58.9 MBbls proved) and 5,265 Mmcf of natural gas (3,364 Mmcf proved). Net proved and probable reserves of oil & NGLs increased by 25.6 MBbls (16.7 MBbls proved) over reserves as at December 31, 2005, due to improved recovery and discoveries/extensions, offset by production of 10.8 MBbls in 2006. Net proved and probable reserves of natural gas declined 1,453 Mmcf (625 Mmcf proved) over reserves as at December 31, 2005, due principally to net downward revisions in reserve estimates of 860 Mmcf (54 Mmcf proved), dispositions of 73 Mmcf (38 Mmcf proved) and production of 553 Mmcf in 2006, offset by discoveries/extensions of 33 Mmcf (19 Mmcf proved).

TRAFINA's activities in the first half of 2006 focused on participating their 40% interest in four Mannville CBM wells, which were drilled and completed in the Wetaskiwin area by its operating partner, all of which TRAFINA sold at the end of the second quarter to its operating partner for $7.35 million (subject to adjustments) and a 1% gross overriding royalty (subject to deductions). TRAFINA also drilled four gross (2.7 net) conventional wells and participated in the recompletion of 2 gross (1.4 net) conventional wells in the greater Wetaskiwin area of Alberta in 2006. This activity resulted in one dry hole, one gross (0.5 net) gas well which was producing but encountered increasing water production and is currently shut-in waiting on a recompletion, a second gas well (1.0 net) which has been completed and is currently waiting tie-in after spring breakup, and an oil well at Bittern Lake which is not producing due to a surface rights landowner objection before the AEUB. The two recompletions were successful and the wells were put back into production in 2006. In the second half of 2006, TRAFINA also initiated plans to develop its shallow Horseshoe Canyon CBM production on its remaining lands in the Wetaskiwin area, however, these plans were not advanced to drilling or recompletion activity by the operating partner in 2006.

In the first quarter of 2007, three Horseshoe Canyon CBM wells were successfully recompleted, utilizing an improved completion technology. One of these wells is tied into production facilities. The other two wells are expected to be tied into production facilities after spring breakup. During the rest of 2007, TRAFINA plans to drill at least three new Horseshoe Canyon CBM wells and to recomplete at least two additional Horseshoe Canyon CBM wells in the Wetaskiwin area. TRAFINA is of the view that the shallow Horseshoe Canyon coals developed at a depth of 220-320m have proven to be aerially extensive and have a proven production capacity throughout the area.

The downward revisions in the natural gas reserve estimates as at December 31, 2006 were principally in the Wetaskiwin area of Alberta and were the result of a conventional Ellerslie well watering-out sooner than expected, well performance issues associated with shallow Horseshoe Canyon CBM wells and some Horseshoe Canyon CBM wells not being tied into production facilities. TRAFINA's finding and development costs increased significantly in 2006, based on proved reserves. This increase was primarily due to the downward revisions of Horseshoe Canyon CBM reserves in the Wetaskiwin area. TRAFINA expects that the drilling and recompletion activity that has taken place in the first quarter of 2007 and is planned to continue after spring breakup will mitigate the reserves revisions.

Forward Looking Statements: This press release contains forward-looking statements, including statements relating to management's approach to operations, expectations relating to the number of wells, amount and timing of capital projects including, without limitation, recompletion of wells, and future reserves. The forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by TRAFINA at the time of preparation, may prove to be incorrect.

TRAFINA is an oil and gas company based in Calgary, Alberta. TRAFINA's shares trade on the TSX Venture Exchange under the stock symbol TFA.A

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • TRAFINA Energy Ltd.
    Roland T. Valentine
    Chairman & CEO
    (403) 263-0800
    TRAFINA Energy Ltd.
    Terry McCoy
    (403) 263-0800
    (403) 263-0811 (FAX)