TriStar Oil & Gas Ltd. has successfully closed the previously announced acquisition of Kinwest Corporation, a private company, and has issued 8.0 million common shares of TriStar to shareholders of the Private Company.
The assets acquired are primarily located in TriStar's Southeast Saskatchewan core area, where approximately half of the production originates from a large, operated, 65 million barrel oil in place light oil pool with a low recovery factor to date. In addition, TriStar gains exposure to an additional 25 net sections (100 percent working interest) of Bakken prone acreage. TriStar has identified 97 net Bakken drilling locations on the acquired acreage based on four wells per section representing unrisked upside potential of over 10 million barrels of reserves net to TriStar.
In total, TriStar has identified 151 (126 net) drilling locations on the assets acquired, all located in Southeast Saskatchewan, and therefore, unaffected by the proposed changes in Alberta's royalty regime.
TriStar continued to have success with the drill bit in the fourth quarter drilling 34 (22.2 net) wells with a 97 percent success rate. In 2007, TriStar drilled 87 (60.8 net) wells resulting in 73 (48.7 net) crude oil wells, 7 (6.1 net) natural gas wells and 1 (1.0 net) stratigraphic test well for an overall success rate of 93 percent. TriStar's 2007 drilling program was primarily focused on high quality, long life light oil targets located in TriStar's key operating areas in Southeast Saskatchewan, West Central Alberta, Central Alberta, and Southern Alberta. TriStar has a development drilling inventory in these core areas of over 1,500 locations.
As a result of this drilling success, TriStar management confirms that it has exceeded the Company's 2007 exit rate target of 14,500 boepd (greater than 65 percent light oil).
Brett Herman, President and Chief Executive Officer of TriStar commented, "2007 has been a year of substantial growth for TriStar, both through acquisitions and the drill bit. Our success through the drill bit has once again resulted in TriStar exceeding our previously announced guidance. We are excited about our 2008 drilling program which is more than 90 percent focused on light oil prospects. These projects are very attractive in the current crude oil price environment and we have commenced our program with a number of wells currently drilling in Southeast Saskatchewan."
With recent company activities, TriStar anticipates 2008 average daily production of more than 20,250 boepd, comprised of greater than 75 percent high quality, long life, light oil, with a 2008 production exit rate of more than 21,750 boepd.
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