Trio Halts Operations at McCool Ranch in California

Trio Petroleum Corp said it has suspended operations at McCool Ranch in California and will terminate its efforts to acquire a working interest in the project.

Natural gas prices and water disposal costs in the state under its previously negotiated terms make it “cost prohibitive for the company to employ cyclic-steam operations to increase production and will not be economically feasible in the long run,” Trio said in a news release.

The company said it has decided to “focus its efforts on other sites which it believes will be more economically feasible”.

Acquisition of Saskatchewan Assets from Novacor

Meanwhile, Trio said it has closed on the balance of certain petroleum and natural gas properties held by Novacor Exploration Ltd. in the Lloydminster, Saskatchewan, heavy oil region.

The Novacor TWP47 assets are located in the southwest quarter of Section 19, Township 47, Range 26W3M, Trio said in a separate statement. There are currently seven producing wells, which Novacor operates, located on the two properties. The wells produce heavy crude oil from the McLaren/Sparky and Lloydminster formations.

The purchase price was $650,000 in cash paid in two tranches, and 526,536 in shares of common stock of Trio, which were registered for resale in a registration statement, Trio said.

Trio CEO Robin Ross said, “Our immediate plan is to initiate our workover program to increase production on these newly acquired assets and we believe our next couple of quarters should reflect the benefit of our work. Our focus remains on acquiring projects that generate immediate cash flow or offer transformative growth potential with strategic investment. We believe that this approach aligns with our long-term vision of creating exponential value while managing risk and resources effectively”.

The acquisition “strategically positions the company to expand its operations into one of North America’s most promising heavy oil basins, with upside potential for long-term production and reserve growth,” Trio stated.

Further, Trio said the assets offer economic development and low operational costs, as well as “market accessibility combined with a favorable regulatory process,” which makes the area “very attractive for continued and future development”.

Novacor will continue as operator of the assets, and Trio said it believes “Novacor’s strategic focus on operational efficiency and low lift costs” provides a significant buffer against downward price pressures.

Trio stated that its plan is to “aggressively grow” its footprint in the area utilizing Novacor as an operator of the assets, and to continue to seek “opportunities for strategic growth and optimization with Novacor’s operational efficiencies”.

“We are excited to acquire an initial footprint in this very lucrative oil and gas area of Canada and home to some of the largest players in the industry such as Cenovus Energy, Canadian Natural Resources, Baytex Energy, Rife Resources and many others who have made Heavy Oil a staple of their operation, and where numerous opportunities to acquire additional highly economic fields exist. Trio’s relationship with Novacor is very important, because Novacor has a long history of oil and gas development in the area,” Ross said in an earlier statement.

Trio Petroleum describes itself as an oil and gas exploration and development company in California, Saskatchewan, and Utah.

To contact the author, email rocky.teodoro@rigzone.com

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.