TRAFINA Energy Ltd.

TRAFINA Energy Ltd.

December 01, 2010 20:16 ET

Trafina Energy Ltd. Completes Portion of Previously Announced $1.9 Million Private Placement, Completes Strategic Land Purchase and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Dec. 1, 2010) -


Trafina Energy Ltd. ("Trafina" or "the Company") (TSX VENTURE:TFA.A) is pleased to announce that it has completed a portion of its previously announced non-brokered private placement of units for proceeds of $1.6 million. The Company has closed on 5,334,000 units (comprised of 5,334,000 Class A common shares ("Common Shares") and 5,334,000 share purchase warrants ("Warrants")) at a price of $0.30 per unit. The Company expects to complete the private placement of the remaining 1,000,000 units, for proceeds of $0.3 million on or before December 3, 2010. 

Each Warrant issued pursuant to the completed portion of the private placement will entitle the holder thereof to acquire one Common Share at a price of $0.45 per share on or before November 30, 2012 (the "Expiry Date"). If at any time after November 30, 2010 and before the Expiry Date the 20 day VWAP of the Common Shares is greater than $0.50 per share, the Company shall be entitled, upon 30 days prior written notice to all holders of the Warrants, to require all then outstanding Warrants to be exercised to acquire Common Shares at a price of $0.45 per share by a date to be specified by the Company in such notice (the "VWAP Conversion Date"). All Warrants that remain unexercised following the VWAP Conversion Date shall immediately expire and all rights of holders of such Warrants terminated without any compensation to any such holder. "VWAP" means the volume weighted average trading price of the Common Shares on the TSX Venture Exchange Inc. (or such other stock exchange upon which the Common Shares may be then listed), calculated by dividing the total value by the total volume of Common Shares traded for the relevant period.

The Common Shares and Warrants issued pursuant to the completed portion of the private placement are subject to a hold period that expires March 31, 2011. Following the completion of a portion of the private placement, Trafina has 27,861,262 Common Shares issued and outstanding. It is expected that net proceeds from the sale of the units will be used to drill up to three additional Cardium wells in 2011.

Trafina is also pleased to announce that it has completed its acquisition of an undivided 100 percent working interest in approximately 24,000 gross acres (18,100 net acres) or approximately 37.5 gross sections (28.25 net sections) of undeveloped land in northeastern Alberta from a private oil and gas company (see November 18, 2010 press release). Plans for December 2010 are to survey potential 2011 drilling sites, for the potential drilling of up to four evaluation wells in the Wabiskaw heavy oil zone.

On November 25, 2010, the Company commenced drilling an Upper Shaunavon horizontal well in southwest Saskatchewan and is currently drilling the horizontal portion of the well.

About Trafina

Trafina Energy 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 and McMullen areas of Alberta with other operated production in Wetaskiwin and Ronalane. 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 closing date of the remaining units of the private placement, use of proceeds from the sale of units for the drilling of three additional Cardium wells and the expected timing and success of drilling four evaluation 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 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)