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Press release from Marketwire

Trilogy Energy Corp. Provides Update on 2011 Capital Expenditures, Credit Facility, Drilling Operations, 2012 Guidance and Announces November 2011 Dividend

Monday, November 14, 2011

Trilogy Energy Corp. Provides Update on 2011 Capital Expenditures, Credit Facility, Drilling Operations, 2012 Guidance and Announces November 2011 Dividend08:00 EST Monday, November 14, 2011CALGARY, ALBERTA--(Marketwire - Nov. 14, 2011) - Trilogy Energy Corp. ("Trilogy" or the "Company") (TSX:TET) is pleased to provide an update regarding its 2011 guidance for capital expenditures, increased credit facility, operations in the Kaybob Montney oil pools, guidance for 2012 (production, capital expenditures and operating costs) and announce its November 2011 dividend. Revised 2011 Capital Expenditure GuidanceTrilogy announces an increase in its 2011 capital expenditures from $285 Million to $350 Million, including acquisitions. The increase is primarily attributable to the expansion of existing infrastructure to accommodate the Company's growing crude oil production, the drilling of additional horizontal wells into Trilogy's Kaybob area Montney oil pools, responding to unbudgeted non-operated projects that Trilogy considers opportune and accelerating the purchase of new equipment and materials to build oil pool infrastructure that was originally budgeted for 2012. The infrastructure for the Kaybob Montney Oil Pool is on track to be expanded to 20,000 Bbl/d and onstream in the second quarter of 2012.Credit Facility UpdateTrilogy's lenders have approved an increase to Trilogy's borrowing base to $525 Million which includes a $50 Million Development Facility dedicated to Trilogy's Montney oil program. The increased credit facilities will allow Trilogy to grow its production and reserve base within forecast cash flow and credit lines.Montney Oil Program UpdateTrilogy drilled 8 of the wells in its 14 oil well program in the third quarter, with the remaining 6 oil wells being rig released by November 6, 2011. Trilogy realized a decrease in drilling times from 25 - 30 days per well to as few as 18 days from spud to rig release. The decrease in drilling time is expected to afford Trilogy the opportunity to drill five additional wells prior to the end of the year: four into the Kaybob Montney oil pool and one into the new Iosegun Montney oil pool. The five additional wells are planned to be fracture stimulated in the first quarter of 2012 and tied in prior to the completion of Trilogy's planned expansion of the treating capacity at the oil battery located at 12-10-64-19 W5M (the "12-10 Battery) from 12,000 to 20,000 Bbl/d which is scheduled to come into service early in the second quarter of 2012.Total production from the Kaybob Montney oil pool reached production rates of 8,000 Bbl/d of oil and 6 MMcf/d of solution gas as of November 13, 2011. Drilling, completion and construction operations will continue throughout the fourth quarter to fracture stimulate 5 Montney oil wells, tie-in 6 oil wells that were previously fracture stimulated and commence construction of an eight inch oil pipeline and an eight inch sour solution gas pipeline to the 12-10 Battery.Trilogy intends to follow up on the 8-1-63-19W5 Montney horizontal oil well that was drilled into the Iosegun Montney oil pool by drilling a second horizontal well from 4-14-63-19W5 to a bottom hole location at 13-10-63-19W5. The new well will be drilled into a structurally higher position than the 8-1 well and will be completed early in the new year. Assuming success with the 13-10 well, Trilogy plans to drill up to four delineation wells into the pool in 2012.2012 GuidanceTrilogy is also pleased to announce that its Board of Directors has approved a 2012 capital expenditure budget of $300 Million. Trilogy will continue to direct capital spending toward its low risk, liquids-rich Montney gas play in the Presley area, the Montney oil pool development in the Kaybob area and the Montney and Doig formations in the Grande Prairie area. Additional capital will be directed towards other high rate of return, liquids-rich gas and oil plays in the Kaybob area, such as the Cardium, Dunvegan, Spirit River, Bluesky and Duvernay formations.Trilogy is forecasting 2012 production of 40,000 Boe/d (138 MMcf/fd of natural gas, 12,500 Bbl/d of crude oil and 4,500 Bbl/d of natural gas liquids), representing a 33 percent increase in production from 2011 guidance. Trilogy's oil and natural gas liquids production is projected to increase to 43% of total production on a Boe basis in 2012. This projection assumes the continued successful development of the Montney oil and gas pools in the Kaybob and Grande Prairie areas and additional projected production growth from the development of new pools in the Dunvegan, Spirit River, Bluesky and Duvernay formations.Operating costs for 2012 are forecast to be $7.00/Boe. This estimate reflects the low production costs associated with the new Montney oil and gas production in the Kaybob area as most of the new production will flow through Trilogy owned and operated pipe lines, oil batteries and gas plants. November DividendTrilogy also announces that its cash dividend for November 2011 will be $0.035 per share. The dividend is payable on December 15, 2011 to shareholders of record on November 30, 2011. The ex-dividend date is November 28, 2011.About TrilogyTrilogy is a petroleum and natural gas-focused Canadian energy corporation that actively acquires, develops, produces and sells natural gas, crude oil and natural gas liquids. Trilogy's geographically concentrated assets are primarily low-risk, high working interest, liquids-rich, lower-decline properties that provide abundant infill drilling opportunities and good access to infrastructure and processing facilities, many of which are operated and controlled by Trilogy. Trilogy's common shares are listed on the Toronto Stock Exchange under the symbol "TET".Forward-Looking Statements Advisory In the interests of providing Trilogy Shareholders and potential investors with information regarding Trilogy, certain information included in this news release constitutes forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "continue", "estimate", "propose", "budget", "forecast", "outlook", "may", "will", "could", "potential", "target" or similar words suggesting future outcomes or statements regarding an outlook. In particular, this news release contains, without limitation, forward-looking statements pertaining to average production; production and reserve growth; average operating and other costs and capital expenditures for 2011 and 2012; development plans and the timing, cost, and expected benefits thereof, including without limitation, Trilogy's horizontal drilling program, exploration and development of the Montney and other formations and other drilling, completion, tie-in and construction plans including those relating to the Kaybob Montney Oil Pool and Iosegun Montney Oil Pool as well as Trilogy's Presley Montney gas development, and other drilling and construction plans in the Kaybob and Grande Prairie areas.Such forward-looking statements are based on a number of assumptions regarding, among other things, current forecasts for production and composition thereof; the natural gas liquids content of Trilogy's natural gas; current commodity price forecasts for petroleum, natural gas and natural gas liquids; future power prices; the ability of Trilogy and its partners to obtain operational results consistent with expectations; geology application to Trilogy's land holdings; current reserves forecasts; the timing and costs associated with planned development and construction projects; the timely receipt of regulatory approvals; the ability of Trilogy to obtain equipment, services and supplies in a timely manner to carry out its activities; assumptions regarding expenses and royalties and the continuation of government royalty regimes and incentive plans; the ability of Trilogy to secure adequate product processing, transmission and transportation and to market oil and natural gas successfully to current and new customers; and assumptions regarding capital expenditures, currency, exchange and interest rates; cash flow consistent with expectations; credit facility increases consistent with expectations; and the continuity of the mutually beneficial agreement with Aux Sable Canada LP; among others, which may prove to be incorrect. Although Trilogy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Trilogy can give no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur.By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual results to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: volatility of oil and gas and natural gas liquids prices, foreign currency, exchange rates, interest rates and market demand; the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserves estimates and reserves life; imprecision in estimating future production and the composition thereof, costs and expenses; the ability of management to execute its business plan; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; Trilogy's ability to secure adequate product processing, transmission and transportation; the ability of Trilogy to add production and reserves through development and exploration activities; uncertainties as to the availability and cost of financing, including Trilogy's ability to extend its credit facility on an ongoing basis; Trilogy's ability to enter into or renew leases and obtain regulatory approvals in a timely manner or at all; the possibility that government programs, policies, regulations or laws relating to royalties, incentive programs, taxation or the environment, may change; risks inherent in Trilogy's marketing operations, including credit risk; risks associated with existing and potential future lawsuits and regulatory actions against Trilogy; health, safety and environmental risks; uncertainty regarding aboriginal land claims and co-existing local populations; uncertainty regarding results of third party industry participants' objections to Trilogy's development plans; weather and general economic and business conditions and other risks and uncertainties described elsewhere in this document or in Trilogy's other filings with Canadian securities authorities.The forward-looking statements contained in this news release are made as of the date hereof and Trilogy 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 required by applicable securities laws.Oil and Gas AdvisoryThis news release contains disclosure expressed as "Boe", "Boe/d", "Mcf/d", "MMcf/d", "Bbl" and "Bbl/d". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.FOR FURTHER INFORMATION PLEASE CONTACT: J.H.T. (Jim) RiddellTrilogy Energy Corp.Chief Executive Officer(403) 290-2900ORJ.B. (John) WilliamsTrilogy Energy Corp.President and Chief Operating Officer(403) 290-2900ORM.G. (Mike) KohutTrilogy Energy Corp.Chief Financial Officer(403) 290-2900OR#1400, 332 - 6th Avenue S.W.Trilogy Energy Corp.Calgary, Alberta T2P 0B2(403) 263-8915 (FAX)