TRILOGY ENERGY CORP.
TSX : TET

TRILOGY ENERGY CORP.

February 09, 2011 22:09 ET

Trilogy Energy Corp. Announces Results from New Horizontal Montney Oil Play

CALGARY, ALBERTA--(Marketwire - Feb. 9, 2011) - Trilogy Energy Corp. ("Trilogy" or the "Company") (TSX:TET) is pleased to announce results on its Montney oil development in the Kaybob area.

Kaybob Montney Oil Development

Trilogy has successfully applied horizontal drilling and multi-stage fracturing techniques to exploit a Montney oil pool in the Kaybob area of Alberta. In the fourth quarter of 2010, Trilogy completed drilling operations on a horizontal Montney oil well at 16-1-64-18W5 (the "16-1 Well"), and completed it using a 15 stage fracture stimulation. Following recovery of the completion load fluid, the 16-1 Well flowed crude oil at 1,800 Bbl/d. During the first full month of production, this well produced at average rates of 500 Bbl/d of crude oil and 1 MMcf/d of natural gas.

Trilogy followed up on the success of the 16-1 Well by drilling a second horizontal Montney oil well to further delineate the Montney oil pool. The second well was drilled as a vertical well at 6-16-64-18W5 in order to core the Montney formation; it was subsequently plugged back to a kick off point and drilled horizontally through the Montney to a total depth of 3,120 m, with a bottom hole location at 3-21-64-18W5. The lateral portion of the well was 1,158 m in length and completed with a 15 stage fracture stimulation. Trilogy was able to flow back the well immediately prior to today's Alberta Crown land sale, recovering all 3,650 barrels of completion fluid and 1,600 barrels of oil in the first 24 hours of production. The final rate during flow back was 1.9 MMcf/d of natural gas and 3,000 Bbl/d of crude oil (40 degree API) at a flowing pressure of 4,450 kPa (645 psi).

Based on the success of these two horizontal Montney oil wells, Trilogy acquired 28 sections of land along the Montney trend in this area at today's Alberta Crown land sale at a cost of $32.2 million. With a 100 percent working interest in 41 sections of land along the trend, Trilogy believes it now holds substantially all of the petroleum and natural gas rights associated with this Montney oil pool and will evaluate accelerating the development of this play in the second half of 2011. Trilogy anticipates drilling further delineation wells, and that the pool will require four to eight horizontal wells per section to fully exploit the Montney reservoir. Trilogy also believes that this land may also prove to be prospective in the Duvernay shale.

The map below illustrates Trilogy's land position on the Montney oil play in the Kaybob area. The prospective lands lie between and within two existing Montney oil pools.

To view the map, please visit the following link: http://media3.marketwire.com/docs/tet209.pdf

About Trilogy

Trilogy is a petroleum and natural gas-focused Canadian energy corporation that actively acquires, develops, produces and sells natural gas, crude oil and natural gas liquids. Trilogy's geographically concentrated assets are primarily low-risk, high working interest, liquids-rich, lower-decline properties that provide abundant infill drilling opportunities and good access to infrastructure and processing facilities, many of which are operated and controlled by Trilogy. Trilogy's common shares are listed on the Toronto Stock Exchange under the symbol "TET".

Forward-Looking Statements Advisory 
In the interests of providing Trilogy's Shareholders and potential investors with information regarding Trilogy, certain information included in this news release constitutes forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "continue", "estimate", "propose", "budget", "forecast", "outlook", "may", "will", "could", "potential", "target" or similar words suggesting future outcomes or statements regarding an outlook. In particular, this news release contains, without limitation, forward-looking statements pertaining to the prospective nature of the Montney and Duvernay formations of the lands acquired by Trilogy at the February 9, 2011 Alberta Crown land sale; the location, extent, geology and potential for development of the Kaybob area Montney oil pool and the nature and timing of Trilogy's drilling and development plans to delineate and exploit this pool.

Such forward-looking statements are based on a number of assumptions regarding, among other things: current production forecasts for oil and natural gas and associated by-products; current reserves estimates; current commodity price forecasts for petroleum, natural gas and natural gas liquids; geology regarding the extent and development potential of the Kaybob area Montney oil pool; the ability of Trilogy and its partners to obtain operational results consistent with expectations; the timing and costs associated with planned development and construction projects; the timely receipt of regulatory approvals; the ability of Trilogy to obtain equipment, services and supplies in a timely manner to carry out its activities; assumptions regarding expenses and royalties and the continuation of government royalty regimes and incentive plans; the ability of Trilogy to secure adequate product processing, transmission and transportation and to market oil and natural gas successfully to current and new customers; availability of financing; and assumptions regarding capital expenditures. Although Trilogy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Trilogy can give no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur.

By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual results to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: volatility of oil and gas prices, foreign currency, exchange rates, interest rates and market demand; the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology and extent of oil and gas deposits; the uncertainty of reserves estimates and reserves life; imprecision in estimating future production, costs and expenses; the ability of management to execute its business plan; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; Trilogy's ability to secure adequate product processing, transmission and transportation; the ability of Trilogy to add production and reserves through development and exploration activities; uncertainties as to the availability and cost of financing, including Trilogy's ability to extend its credit facility on an ongoing basis; Trilogy's ability to enter into or renew leases and obtain regulatory approvals in a timely manner or at all; the possibility that government programs, policies, regulations or laws relating to royalties, taxation or the environment, may change; risks inherent in Trilogy's marketing operations, including credit risk; risks associated with existing and potential future lawsuits and regulatory actions against Trilogy; health, safety and environmental risks; uncertainty regarding aboriginal land claims and co-existing local populations; weather and general economic and business conditions and other risks and uncertainties described elsewhere in this document or in Trilogy's other filings with Canadian securities authorities.

The forward-looking statements contained in this news release are made as of the date hereof and Trilogy 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 required by applicable securities laws.

Contact Information

  • Trilogy Energy Corp.
    J.H.T. (Jim) Riddell
    Chief Executive Officer
    (403) 290-2900
    (403) 263-8915 (FAX)
    or
    Trilogy Energy Corp.
    J.B. (John) Williams
    President and Chief Operating Officer
    (403) 290-2900
    (403) 263-8915 (FAX)
    or
    Trilogy Energy Corp.
    M.G. (Mike) Kohut
    Chief Financial Officer
    (403) 290-2900
    (403) 263-8915 (FAX)
    or
    Trilogy Energy Corp.
    #1400, 332 - 6th Avenue S.W.
    Calgary, Alberta T2P 0B2