RE: News dated 7 Dec 06(Note the legal jargin has been removed at the end. Otherwise it is a 4 page post)
December 7, 2006 2:04 PM ET
TriStar announces acquisition of private company; and upward revision to 2007 guidance
CALGARY, Dec. 7 /CNW/ - TriStar Oil and Gas Ltd. ("TriStar" or the "Company") is pleased to announce that, subject to regulatory and other approvals, it has executed an agreement to acquire, by way of an exempt takeover bid, all of the issued and outstanding shares of a private Saskatchewan oil and gas company (the "Private Company"), for total consideration of 2,500,000 common shares of TriStar and $2 million in cash (the "Purchase Price").
The assets of the Private Company being acquired by TriStar have more than 700 mboe proven plus probable reserves (based on TriStar internal estimates), are currently producing more than 300 boepd of high quality, light oil and are strategically located in TriStar's key operating area of Southeast Saskatchewan.
TriStar has identified more than 17 drilling locations on undeveloped lands of more than 5,000 net acres associated with the Private Company assets.
PRO FORMA OVERVIEW; UPWARD REVISION TO TRISTAR 2007 GUIDANCE
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The Private Company acquisition is accretive, on a per share basis, to TriStar's reserves, production and cash flow.
Upon completion of the Private Company acquisition, which is scheduled to close in January 2007, TriStar will be revising upward the Company's 2007 average daily and exit rate production estimates from management's previously announced guidance of 4,550 boepd for average 2007 production and 4,950 boepd for 2007 exit production.
TriStar now anticipates 2007 average daily production of more than 4,800 boepd, comprised of greater than 75 percent high quality, long life, light oil, with a 2007 production exit rate of more than 5,200 boepd.
Upon the closing of the Private Company acquisition, TriStar will have the following corporate characteristics:
Reserves: (greater than)14.3 mmboe (P+P); RLI of over
8.7 years
Production: Average Rate 2007 (E) (greater than)4,800 boepd
((greater than)75% light oil)
Exit Rate 2007 (E) (greater than)5,200 boepd
((greater than)75% light oil)
Net Debt: (less than)$60MM; one times cash flow (US$60 WTI,
$7.50 AECO)
Shares Outstanding: 49.2 MM (B); 50.5 MM (FD)
Upside: (greater than)300 locations
(greater than)210,000 net acres of undeveloped land
In conjunction with the transaction, TriStar has entered into a hedge of 250 barrels of oil per day at a fixed price of US$68.35 for the period January 1, 2007 through December 31, 2008.
TriStar Oil & Gas Ltd. is a Calgary based company active in the acquisition, exploration, development and production of crude oil and natural gas in Western Canada.
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When used in this press release, boe means a barrel of oil equivalent on
the basis of 1 boe to 6 thousand cubic feet of natural gas. Boepd means a
barrel of oil equivalent per day.
Boe's may be misleading, particularly if used in isolation. A boe
conversion ratio of 1 boe for 6 thousand cubic feet of natural gas is
based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead.