TriStar Oil & Gas Ltd. is pleased to announce its financial and operating results for the three and six month periods ended June 30, 2008.
The Company's achievements during the second quarter of 2008 include the following:
- Increased production to 20,332 Boepd in the second quarter of 2008 from 4,941 Boepd in the second quarter of 2007, representing a year over year increase of 311 percent;
- Achieved ninth consecutive quarter of production growth;
- Cash flow increased to $96.8 milion in the second quarter of 2008 from $13.9 milion in the second quarter of 2007, a year over year increase of 595 percent;
- Cash flow per share increased from $0.49 per share in the second quarter of 2007 to $0.88 per share in the current quarter, a year over year increase of 80 percent;
- Cash flow per share increased by 19 percent over the first quarter of 2008;
- Drilled 34 (24.2 net) wells in the second quarter with a 97 percent success rate;
- Successfully completed the divestiture of certain non-core properties for approximately $10 million, the proceeds of which will be redeployed into TriStar's 2008 capital budget as described below;
- TriStar has successfully increased its Bakken land inventory which now exceeds 220 (145 net) sections, up from 200 (130 net) sections, through acquisitions, success at crown land sales and through farm-in agreements. This represents a future Bakken drilling inventory of 797 (531 net) locations;
- Subsequent to quarter end, TriStar closed the acquisition of all of the issued and outstanding shares of two private companies through the issuance of 1.6 million TriStar Common Shares to the shareholders of the private companies. The acquired assets are located adjacent to TriStar's Southeast Saskatchewan core properties; and
- Subsequent to quarter end, increased the Company's credit facility to $450 million.
Increased 2008 Capital Budget:
- The Company is revising upwards its 2008 capital expenditure program to approximately $365 million from $300 million, reflecting greater than anticipated cash flow resulting from the success of the Company's first half drilling program and from sustained higher than budgeted commodity prices. The increase in expenditures is expected to be allocated entirely to the Company's Southeast Saskatchewan core area, primarily to the Bakken play. The majority of the increase will be directed towards facilities and infrastructure construction along with continued Bakken undeveloped land acquisition and drilling activity. Facilities and infrastructure projects include the construction of two additional central processing facilities and extensive oil pipeline and gas gathering systems, all to position TriStar for continued growth of the Bakken resource play.
- The Company is reiterating 2008 production guidance with an anticipated 2008 exit rate of more than 23,000 Boepd. The unadjusted production guidance, despite the increase in capital expenditures, is the result of the majority of the increased capital spending being allocated to facility and infrastructure projects and additional Bakken drilling not occurring until late in 2008.
Operational Review
TriStar achieved its ninth consecutive quarter of production growth in the second quarter of 2008 where the Company averaged 20,332 Boepd. The Company participated in the drilling of 34 (24.2 net) wells resulting in 30 (21.6 net) oil wells, 3 (1.6 net) stratigraphic and service wells, and 1 (1.0 net) D&A wells, for an overall success rate of 97 percent. -- www.cnxmarketlink.com
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