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Tri Link Deep Red River Oil Drilling and Production Highly Successful At Tyvan Pool.

CALGARY, Alberta--(BUSINESS WIRE)--July 5, 1999--

Tyvan Red River Oil - Excellent Results From Q1 Drilling

Tri Link announces that its initial development drilling of 6 deep Red River wells during the first fiscal quarter (ended June 30) is 100 percent successful on the previously announced large Tyvan Red River oil discovery. This brings the total well count in the pool to 18 consecutive oil wells with no dry holes - unprecedented on the Red River in Canada. The Tyvan pool is estimated to contain about 60 million barrels of oil in place of light 31 degree API crude and is the largest Red River discovery in the Western Canadian Basin. Tri Link owns the Tyvan pool 100 percent.

Current pool production has stabilized at 1,500 barrels per day from the first 11 wells drilled during the last quarter of the fiscal year ended March 31, 1999. This year's new production will come on stream during the second fiscal quarter - an incremental 1,000 to 1,200 barrels per day, raising Tyvan up to well above the 2,500 barrel per day level. The development drilling is confirming reserves in place and after full development and exploitation, the Company's estimated reserves recoverable are in the 12 to 15 million barrel range as previously announced.

Development drilling at Tyvan will continue through this year and well into next year to bring pool production up to a level of about 4,000 barrels per day once all infill vertical and horizontal wells drilling have been drilled.

Tyvan pool production history at this stage indicates average first year stabilized individual well rates of 150 BOPD with wells ranging between 75 and 300 BOPD. The project is highly economic at $15 WTI, however, at prices of $18 to $19 WTI, Tri Link's producing field netbacks are above $21 per barrel (Cdn). The economics of development are extremely attractive with individual well payouts less than one year.

THE RED RIVER PLAY - Tri Link's Position

For the past year and a half, Tri Link's strategy was to take advantage of the opportunity to bank oil growth for tomorrow. Tri Link has positioned itself through a low oil price cycle with approximately one million acres of 100 percent owned lands on the Red River play. Last year, the Company's capital focus was on 3-D seismic, land acquisition and exploration drilling during a period in which oil prices of $12 WTI provided little financial incentive to spend aggressively on development.

Tri Link's exploration drilling success has been very good over the past year and the Red River project is considered a very significant discovery which will yield many years of development and new exploration for high quality conventional oil.

Total Red River production today is about 2,200 barrels per day and will grow steadily through the year as new development drilling is brought on stream. Tri Link will show substantial cash flow gains in the first quarter ended June 30 over the previous quarter as a result of higher oil prices. Going forward this year, Tri Link will benefit by the combined thrust of development production growth and good oil prices.

TRI LINK'S PLAN - This Year and Next Year

With increased oil prices and cash flow, Tri Link plans to expand its development budget through the fiscal year (ending March 31, 2000).

The commodity price cycle for oil has turned and the Company's capital focus will shift to its huge inventory of development. This year's budget of $75 million now will be two-thirds weighted to development drilling. The capital budget for the following year will be even more heavily weighted to development with 75-80 percent directed to production growth.

The Red River development drilling this year and next year will focus on the two larger oil discoveries at Tyvan and Montmartre. Tri Link has also now increased infill drilling in the Hazelwood Tilston Oil Project. The Company has an inventory of 100 infill locations amounting to about 4,000 barrels per day of oil capacity to be brought on stream over the next two and one-half years.

From the second fiscal quarter forward, Tri Link's production is projected to grow steadily as development momentum builds, such that March 31, 2000 exit rates are projected to be in the 15,000 to 16,000 BOEPD range.

From this point forward, the exploration portion of the budget ($25-$30 million) will be directed toward drilling, as most of the seismic and land acquisitions are completed. Tri Link now has more than twenty new top-end Red River prospects in inventory and will shift from seismic and land acquisition to exploratory drilling, likely drilling eight to ten new structures this year.

Tri Link Resources Ltd. is an intermediate oil and gas producer with operations in Alberta, Saskatchewan and Manitoba and trades on The Toronto Stock Exchange under the symbol TLR.
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Publication:Business Wire
Geographic Code:1CANA
Date:Jul 5, 1999
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