TriOil Resources Provides Operational Update

CALGARY, Oct. 9, 2012 /CNW/ - TriOil Resources Ltd. ("TriOil" or the "Company" -TSXV:TOL) is pleased to provide a third quarter operational update.

Production and 2012 Guidance

Current production based on field estimates exceeds 2,500 boe/d (80% oil and NGL's).  The Company's current productive capability (current production plus completed wells in the process of being brought on stream) exceeds 2,900 boe/d (80% oil and NGL's), with an additional 3 (1.9 net) wells waiting on completion and 5 (3.4) net additional wells planned in the fourth quarter. TriOil remains on track to meet its 2012 exit production target of 3,400-3,600 boe/d (80% oil and NGL's).

Drilling results have met or exceeded expectations, however, unseasonably wet field conditions at Kaybob during the first half of the third quarter coupled with off-line production at Lochend due to pipeline installation activity and the start-up of the TriOil operated Lochend gas plant expansion have resulted in slightly lower than anticipated third quarter average production. As a result, we expect 2012 annual average production at the lower end of the Company's 2,300-2,500 boe/d forecast.

Lochend Cardium Operations

The Company's Lochend Cardium program continues to deliver strong results and steadily improving capital efficiencies. To date TriOil has implemented 11 slick water stimulations in the Central/Western Cardium trend with an average IP30 of 328 boe/d (80% oil).

TriOil continues to optimize drilling techniques and completion designs. Our last 7 horizontal wells have all been drilled monobore with invert mud systems. Drilling times have been reduced by an average of 4 days. TriOil recently implemented hybrid fracs on 2 Lochend area wells with encouraging early results and plan to apply these modified frac designs to future development drilling operations within the pool.

TriOil successfully participated in the drilling of the first long-reach horizontal oil well (over 2,800 meters open in the Cardium "A") in the Lochend region (TOL 50%) and completed the well with a 40 stage hybrid frac during the third quarter.  After milling out the ball seats/sand blockages in the heel of the wellbore the well tested at an average of approximately 730 boe/d (630 bopd) over an 8 day production test period. The operator plans to bring the well on production in late October and produce the well for a few months to determine productivity from the milled out heel section of the horizontal leg, prior to drilling out the toe section and bringing the entire wellbore on production.  We are encouraged by the early results of this well and plan to drill 2 additional long-reach horizontal wells in the first half of 2013.

With the effective utilization of multi-well pads, monobore drilling technologies, hybrid frac designs and long reach horizontals at Lochend, we expect that production rates, recoveries and capital efficiencies will continue to improve.

In the third quarter of this year, TriOil drilled 4 (2.4 net) horizontal oil wells at Lochend and successfully completed all 4 wells. Three (2.0 net) of these wells were drilled on the higher productivity Central/Western Lochend Cardium trend and 1 (0.4 net) well was drilled on the Eastern Lochend Cardium trend. The first well (TriOil 50%) averaged 275 boe/d (80% oil) over its initial 30 calendar days of production and is currently producing at 330 boe/d (60% oil) in its second month. The second well (TriOil 40%) was completed with a hybrid frac and is the best well drilled to date on the Eastern Lochend Cardium trend, averaging 250 boe/d (96% oil) over its initial 23 calendar days of production. The remaining 2 (1.5 net) wells, including our first long-reach horizontal oil well, are both located in Central/Western Lochend and are expected to commence production late October. TriOil plans to drill 2(1.2 net) additional horizontal oil wells at Lochend in the fourth quarter of this year.

TriOil acquired an additional 14 sections of Crown land on the Central/Western Lochend trend at a recent Alberta land sale, increasing our land position 96 (70 net) sections on the Lochend Cardium light oil resource play. Our current Lochend drilling inventory stands at 150 (97 net) horizontal development locations, which does not include any locations on the newly acquired Southern Lochend landblock.  There is potential to add an additional 80 net locations to our drilling inventory with successful step-out drilling along the Cardium trend.

We recently completed a 15 mmcf/d expansion of the TriOil Lochend gas plant (TOL operated; TOL 51%) to 20 mmcf/d and expect to commission the new facilities in mid-October. The expanded  facilities will allow a number of shut-in or constrained Cardium wells to come on stream and will accommodate TriOil and industry Cardium gas volumes at Lochend for the foreseeable future. We also expect that the new facilities will improve our NGL recoveries and drive lower operating costs for TriOil.

Kaybob Operational Update

The Kaybob Dunvegan light oil play has contributed significant new production and reserves since TriOil's first well on the play in late 2011. Our first 10 horizontal Dunvegan oil wells have delivered average IP30 rates of 318 boe/d (80% oil and NGL's), and we are pleased to announce the most recent well (TOL 25%) achieved an IP30 of 326 boe/d (60% oil) during the third quarter.

Although field activities were hampered by unseasonably heavy rainfall in July and August, TriOil has been very active in the field over the last few months. We recently brought 3 (2.1 net) oil wells on production and have 4 (2.9 net) wells waiting on completion/production operations. TriOil plans to drill 2 (1.5 net) additional horizontal oil wells at Kaybob in the fourth quarter of this year.

Recent Financing and 2012 Capital Program

TriOil closed a $28 million bought deal financing on October 4, 2012, issuing 7,845,000 common shares at a price of $2.55 per share and 2,917,288 flow-through common shares at a price of $3.00 per share. Our 2012 Capital Budget has been increased by $17.5 million to $117.5 million to provide for the recent South Lochend land acquisition.

Crude Oil Hedging

TriOil maintains an active crude oil hedging program in order to stabilize average realized sales prices and protect the Company's forecast cash flow and planned capital program. During the third quarter we layered in additional Canadian dollar denominated fixed priced oil swaps for 2012 and 2013. In aggregate, the Company has now hedged 900 bbls/d of crude oil with a fixed weighted average price of $97.94 Canadian per bbl for 2012 and 800 bbls/d of crude oil with a fixed weighted average price of $101.93 Canadian per bbl for 2013.

Outlook

With a growing cash flow and production base as we near our 3,500 boe/d 2012 exit target, a very healthy balance sheet, a significant drilling inventory and operational presence in two high netback light oil resource plays, evolving technical improvements to our drilling and completion programs, steadily improving capital efficiencies and decreasing operating costs, TriOil has established a strong growth platform for 2013 and beyond.

TriOil is a Calgary, Alberta based company engaged in the exploration, development and production of petroleum and natural gas. TriOil has approximately 64.0 million common shares issued and outstanding (70.1 million fully diluted). The common shares of TriOil trade on the TSX Venture Exchange under the symbol TOL.

Forward Looking Statements

This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "believe", "plans", "intends", "confident", "may", "objective", "ongoing", "will", "should", "project", and similar expressions are intended to identify forward-looking information. More particularly, this document contains forward looking statements which include, but are not limited to, expected future drilling and completion plans, expected production and reserves growth, expectations about the Company's 2012 capital program and the future operations of TriOil.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by TriOil, including with respect to the anticipated exploration and development opportunities and the outlook for the fiscal year ending December 31, 2012, expectations and assumptions concerning the success of future exploration and development activities, production guidance, the performance of new wells, prevailing commodity prices and the availability of additional capital if and when required by the Corporation.

Any references in this news release to initial and/or final raw test or production rates and/or "flush" production rates or 30, 60 and 90 day production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.

Although TriOil believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because TriOil can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in TriOil's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com and TriOil's other public disclosure documents which have been filed on SEDAR and can be accessed at www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof and TriOil undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Meaning of BOE

Disclosure provided herein in respect of barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation.  A boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6Mcf:1Bbl, utilizing a conversion on a 6Mcf:1Bbl basis may be misleading as an indication of value.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE: TriOil Resources Ltd.

Russell J. Tripp, President & CEO, TriOil Resources Ltd.; Cheryne Lowe, VP Finance & CFO, TriOil Resources Ltd.; Andrew Wiacek, VP Exploration, TriOil Resources Ltd.; Corporate Phone: [phone]