Fully Permitted to Restart Production from Six Previously Producing Wells
BAKERSFIELD, CA, Oct. 18, 2023 (GLOBE NEWSWIRE) -- Trio Petroleum Corp (NYSE American: TPET) (“Trio” or the “Company”), a California-based oil and gas company, today announced that it has acquired an approximate 22% working interest in the McCool Ranch Oil Field (“McCool Ranch”). McCool Ranch is located in Monterey County seven miles north of the Company’s flagship South Salinas Project. The Company is acquiring McCool Ranch through work commitment expenditures.
There are three developed areas at McCool Ranch and the Company’s acquisition is in the so-called Hangman Hollow Area that is relatively new and developed with four horizontal oil wells, two vertical oil wells, one water-disposal well, one freshwater well, a steam generator, boiler, three 5,000 barrel tanks, 250 barrel test tank, water softener facilities, two fresh water tanks, two soft water tanks, in-field steam pipelines, oil pipelines and other facilities. The property is fully and properly permitted for oil and gas production, cyclic-steam injection and water disposal and is currently idle. The Company’s investment is allocated to restart production from this field and is expected to establish important cash flow for the Company. The property has significant upside potential with many undrilled infill and development well locations identified. Pictures of McCool Ranch can be found on the Trio website at the following link: https://trio-petroleum.com
Oil wells at the property will initially be restarted “cold” (i.e., without steam injection) and over time each well will be returned to cyclic-steam stimulation (“CSS”) operations, also known as ‘huff and puff’. The Company will receive a disproportionately high share of the cash flow until payout of its work commitments funds. Payout is expected to occur in the first year after restarting the field, subject to the successful restart of production as planned. The ‘cold oil’ production is expected to last about two months and will begin following completion of remedial activities on five wells and minor repairs and inspections on the steam generation and distribution facilities. The CSS plan is for each well to undergo approximately 10 days of steam injection followed by a ‘soak’ period prior to the well’s return to production. This process is expected to be repeated for several years.
The heavy-oil reservoir is the high-quality (i.e., sidewall core data indicate up to 36% porosity and 3.5 Darcy permeability) ‘Lombardi’ oil sand at a depth of 2,100 feet. The Lombardi Sand at the acquired property is estimated to contain up to about seven million barrels of oil-in-place. The property produced oil until December 2015 when it was shut-in, as were many other oil fields, due to collapse in oil price to below $40 per barrel. The Company believes that current oil prices and other considerations (e.g., approved permits) make this an ideal time to restart the field.
There are several fields within a mile of McCool Ranch that have demonstrated the effective use of horizontal wells and steam-drive, which is different than cyclic-steam. ‘Steam drive’ utilizes continuous steam injection at dedicated steam-injection wells that are surrounded by producing oil wells. Steam drive can significantly increase oil recovery and this process has been successfully applied in the adjacent Lynch Canyon field. Lynch Canyon has produced over 2.8 million stock tank barrels of oil (MMSTB) and is currently producing about 6,000 barrels of oil per month from the Lanigan Sand. The Lanigan also contains oil at McCool Ranch and may be capable of oil production there but it currently remains a secondary target to the proven Lombardi. Under full development the acquired property will likely have about 15 horizontal wells and, employing only CCS, is expected to recover about 1.2 MMSTB of oil. However, if it is determined that a steam drive process is an appropriate development strategy, McCool Ranch may be capable of producing an additional 1.0 MMSTB.
The Company believes this acquisition is an important step in building a portfolio of high-quality development and exploration opportunities, diversifying the Company's assets and fueling the Company’s growth.
Trio’s newly appointed CEO, Michael L Peterson, stated: “We are pleased to close this acquisition at McCool Ranch. We are fulfilling our business plan to make smart acquisitions to help ensure the success of the company and to increase shareholder value. Our independent Special Acquisition Committee will continue to search for acquisitions to help diversify and provide significant upside opportunity to our production and cash flow. With each asset we are dedicated to bring them onto production in a cost efficient and timely manner.”
About Trio Petroleum Corp
Trio Petroleum Corp is an oil and gas exploration and development company headquartered in Bakersfield, California, with operations in Monterey County, California. Trio has a large, approximately 9,267-acre asset called the “South Salinas Project” where it owns an 85.75% working interest. Trio’s near-term plans include testing and producing the HV-1 well, and then drilling the HV-2 and HV-4 wells. Previous operations on this asset have successfully drilled two (2) production/discovery wells (i.e., the HV-3A and BM 2-2 wells) that Trio now owns.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Acts”). In particular, when used in the preceding discussion, the words "estimates," "believes," "hopes," "expects," "intends," “on-track”, "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Acts and are subject to the safe harbor created by the Acts. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of Trio's control, that could cause actual results to materially and adversely differ from such statements, which risks, uncertainties and other factors are included from time to time in filings made by Trio with the U.S. Securities and Exchange Commission (“SEC”), including, but not limited to Trio’s Registration Statement on Form S-1 filed initially filed with the SEC on June 14, 2023 and declared effective on July 6, 2023, Trio’s Report on Form 10-Q for the quarterly period ended April 30, 2023 (filed with the SEC on June 8, 2023) and Trio’s Report on Form 10-Q for the quarterly period ended July 31, 2023 (filed with the SEC on September 11, 2023), all of which are available on the SEC’s website at www.sec.gov . Trio undertakes no obligation to update these statements for revisions or changes after the date of this press release, except as required by law.
Investor Relations Contact:
Redwood Empire Financial Communications
Michael Bayes
(404) 809 4172
michael@redwoodefc.com
