News on Results and Slant Wells Trafina Reports Encouraging Results at McMullen and Prepares for Slant Well Drilling Program
CALGARY, ALBERTA--(Marketwire - Jan. 20, 2012) -
Trafina Energy Ltd. (TSX VENTURE:TFA.A) ("Trafina" or the "Company") is pleased to provide an update on activity at its operations at McMullen, Alberta. The Company's current production from the area is approximately 85 barrels of oil per day. More importantly, Trafina's fourth vertical test well drilled at 08-28-077-25 W4M continues to show strong results. The 08-28 well has been on production for approximately 50 days and is currently producing at a rate of approximately 45 barrels of oil per day, with low levels of associated water and sand production.
The positive results from the 08-28 well coupled with additional geological analysis set up a slant well drilling program on the 08-28-077-25 W4M well-site. As part of its 2012 planning, and due to financial constraints as a result of continuing depressed natural gas prices, the Company has taken steps to reduce its overhead costs for 2012. Additionally the Company plans to raise capital to fund the drilling of up to three slant wells this winter drilling season, subject to rig availability. In addition to improving operating income and cash flow, three successful slant wells are expected to further substantiate the previously disclosed resource development potential of the McMullen area. As part of its longer term planning to fully develop the area, the Company is currently evaluating the merits of third party financing alternatives such as farm-outs, joint ventures and/or a partial sell down of the McMullen asset base.