TriStar Oil & Gas Ltd (fka TOG)

[sumisu]

TriStar deal boosts stake in Saskatchewan energy rush
Bulldog increases junior's Bakken holdings

NORVAL SCOTT

December 07, 2007

http://tinyurl.com/36gxrp

CALGARY -- Calgary-based junior TriStar Oil & Gas Ltd. has joined the competitive race to develop oil in Saskatchewan, acquiring Bulldog Resources Inc. for $200-million in stock.

Bulldog, also based in Calgary, mainly produces light oil in southeastern Saskatchewan and holds land in the Bakken play, a red-hot exploration area that's been the subject of numerous deals in recent months as firms seek out light oil properties that aren't affected by the upcoming increase in Alberta's royalties.

"The combination further expands our Bakken position and solidifies our position as a top player in southeast Saskatchewan," said TriStar chief executive officer Brett Herman in a press release.

TriStar will pay 0.59 of a common share for each Bulldog share, according to a statement yesterday from the companies. Including the assumption of $5-million in debt, the deal is valued at about $205-million, TriStar spokesman Brian Purdy said in an interview.

About 75 per cent of Bulldog's production of around 2,200 barrels of oil and gas equivalent a day comes from the Fertile oil project in Saskatchewan, which Mr. Herman called one of the best discoveries in the province in the past 15 years.

This is the second acquisition in less than three weeks for TriStar. The company on Nov. 19 said it agreed to acquire closely held Kinwest Corp. for $80-million plus the assumption of $12.5-million in debt.

After these two deals are completed, TriStar will produce over 8,000 barrels of oil equivalent a day of light oil in Saskatchewan, and be one of the top three participants in Bakken.

As recently as last year, crude from Bakken was perceived as too expensive and tricky to extract, because the tight formation of the reserves prevented large amounts of oil from being recovered. However, advances in technology - including the use of systems developed by Calgary-based Packers Plus Energy Services - that effectively fracture a larger area, allowing more crude to be extracted, has opened up the reservoir for explorers such as Bulldog.

Bidding for resources in the Bakken region has been heated. In September, Crescent Point Energy Trust bought Innova Exploration Ltd. for $360-million in order to boost its holdings in the area. That followed Crescent Point's purchase of Mission Oil & Gas Inc. in September, 2006, for about $700-million. Last month, Petrobank Energy and Resources Ltd. inked a deal to buy Peerless Energy Inc., which also operates in Bakken, for $334-million, including debt.

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