TriStar Oil & Gas has seen its production levels skyrocket in recent years, thanks to an aggressive strategy of utilizing new technology and seeking out acquisitions.

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Growth can be a tricky thing to manage. All companies want to experience it, but if one isn’t prepared for it, it can turn out to be too much of a good thing.

Growth is also something that TriStar Oil & Gas Ltd. has become intimately familiar with in the last two years, and not in an academic sense. CFO Jason Zabinsky and Vice President of Exploration Eric Strachan say TriStar has experienced significant growth thanks in part to the success of its strategy in the Bakken play in southeast Saskatchewan.

The company’s expansion has been rapid, according to Zabinsky. From production of approximately 1,000 boe/d in early 2006, TriStar has grown to more than 20,000 boe/d of production in the first quarter of 2008, he says. This has been due to a number of factors, not the least of which has been the acquisition of some key properties.

Strachan says the company’s superior technology and position in a number of strategically significant plays have put it in a place to grow even further. TriStar is achieving this growth on two fronts, both organically and through acquisitions. He says the crown jewel of the company’s holdings, the Bakken, is a look into how the company expects to operate into the future, and that if the Bakken is any indication, TriStar should be a force in exploration and development for years to come.

TriStar is an intermediate oil and gas company based in Calgary, Alberta, Canada. The company is active in acquisition, development and production of light crude oil and natural gas in Alberta and Saskatchewan.

Growing Stronger
Zabinsky says the company’s roots stem from StarPoint Energy Ltd., a junior exploration company spun out of Crescent Point Energy Ltd. in 2003. The firm reached production of more than 8,600 boe/d when it converted to a royalty trust and spun out Mission Oil & Gas Inc. as a new exploration firm in early 2005 to take advantage of what was at the time the recently discovered Bakken play.

By 2005, StarPoint had grown to nearly 38,000 boe/d before merging with Acclaim Energy Trust to form Canetic Energy Trust. TriStar was spun out of that merged entity, with the management from StarPoint at the helm.

“From that point on, TriStar has done a number of acquisitions, including Sawtooth International Resources Inc. in March 2006 and Raven Energy Ltd in June 2006,” Zabinsky says. In 2007, TriStar completed the reverse takeover of Real Resources Inc., significantly boosting the company’s production.

“Prior to that, TriStar was just under 5,000 barrels a day,” Zabinsky says. After the Real Resources deal, TriStar jumped to more than 15,000 boe/d.

More recent acquisitions include Arista Energy, Kinwest Corporation and Bulldog Resources. All of these acquisitions further strengthened the company’s presence in southeast Saskatchewan and in the lucrative Bakken play.

“The closing of the Arista transaction combined with the acquisition of Bulldog materially expands our southeast Saskatchewan asset base,” TriStar CEO and President Brett Herman said in a statement. “The Fertile pool has extensive development potential at extremely attractive economics which we plan to immediately pursue in 2008.”

Kinwest Corp. was also focused on the Bakken play, and Zabinsky says all of the company’s recent acquisitions have helped it not only in that particular area, but overall. “In aggregate, TriStar has closed all of its recently announced deals and is producing over 20,000 boe per day,” he says. The company’s production is split almost equally between its holdings in Alberta and Saskatchewan, with approximately 10,000 boe/d being produced in each province.

Strong Assets
The Bakken prospect is the most prominent of TriStar’s holdings, and the play and the company have a deeply integrated history. Zabinsky says the reason the StarPoint management team spun off Mission in the first place was to develop Bakken after the first three initial horizontal exploration wells were drilled by StarPoint.

“Mission Oil and Gas went on to very successfully exploit the Bakken play until its sale to Crescent Point in 2007,” he says. At the time, TriStar had been staying out of Mission’s way in the area. “We didn’t really compete with the Mission management team in developing the Bakken play,” Zabinsky says. Once Mission was acquired, however, TriStar moved in and built up its position. Because the company’s leadership was already familiar with Bakken due to its work under StarPoint, he adds, it was an easy transition for TriStar to make.

TriStar’s growth in the Bakken play has been rapid.  At the beginning of 2007, TriStar held only 11 net sections of the play, producing less than 50 boe/d. Through various corporate and land acquisitions, however, TriStar has been able to build a portfolio of more than 120 net sections of land with production of more than 2,000 boe/d. Zabinsky says the company anticipates exiting 2008 at well over 3,000 boe/d of production from the Bakken play.
New Techniques
Strachan says TriStar has “dramatically” expanded the Bakken since it began in earnest at the start of 2007. He gives much of the credit for the play’s significant production to TriStar’s dedication to improving the technology it uses on the site.

“Essentially, what we’ve seen in the last year on the play is a two-fold increase in production in the wells that we are drilling … and a lot of that is being driven by the changing technology,” Strachan says.

Fracturing technology continues to evolve rapidly and has played a major part in increasing the production in the Bakken.

“What we were doing was testing a new technology concept here, drilling horizontal wells and fracing them, and that really wasn’t being done in Canada,” Strachan says. “That’s something that TriStar, dating back to our StarPoint days, was on the forefront of.”