California-based Trio Petroleum Corp has entered right into a non-binding letter of intent (LOI) for the acquisition of a one hundred pc working curiosity in sure petroleum and pure fuel properties held by Novacor Exploration Ltd.
The property are within the prolific Lloydminster, Saskatchewan heavy oil area of Canada. There are at present seven producing wells situated on the 2 properties. The wells produce heavy crude oil from the McLaren/Sparky and Lloydminster formations. Novacor is the operator of those money move optimistic wells, which have present manufacturing of roughly 70 barrels per day with potential for 4 further re-entry wells and two absolutely outfitted areas to be reactivated every able to an extra 70 barrels in complete per day.
Trio mentioned in a information launch that the acquisition “may strategically place itself to broaden its operations into considered one of North America’s most promising heavy oil basins, with upside potential for long-term manufacturing and reserve development”.
“For the reason that Novacor property are within the heavy oil space, they provide economical growth and low operational prices. Market accessibility mixed with a positive regulatory course of makes this space very engaging for continued and future growth inside these lands,” Trio added.
Trio famous that an August reserve report detailed 91,000 barrels for complete proved and possible oil of the wells at present being produced. Novacor has recognized additional potential upside within the Sparky GP via some multi-lateral drilling alternatives.
“We’re excited to accumulate an preliminary footprint on this very profitable oil and fuel space of Canada and residential to among the largest gamers within the business resembling Cenovus Vitality, Canadian Pure Sources, Baytex Vitality, Rife Sources and lots of others who’ve made Heavy Oil a staple of their operation, and the place quite a few alternatives to accumulate further extremely financial fields exist,” Trio CEO Robin Ross mentioned.
Ross added, “Trio’s plan is to aggressively develop its footprint within the space using Novacor as an operator of the property. The preliminary venture has the aptitude to quickly double manufacturing, and we’re wanting ahead to an extended and affluent relationship with Novacor. Our focus stays on buying tasks that generate speedy money move or provide transformative development potential with strategic funding just like the Asphalt Ridge Undertaking in Utah. We imagine that this strategy aligns with our long-term imaginative and prescient of making exponential worth whereas managing danger and sources successfully”.
The acknowledged buy worth of the acquisition is round $1.4 million (CAD 2 million), with $650,000 payable in money and the rest in shares of widespread inventory of Trio. Upon execution of the LOI, Trio mentioned it paid Novacor a very good religion deposit of $65,000, which shall be utilized to the money portion of the acquisition worth at closing.
Apart from the obligations of confidentiality and exclusivity contained within the LOI, no different phrases are binding till definitive acquisition paperwork are signed by the events, the corporate acknowledged. The definitive acquisition paperwork would possible include customary representations and warranties of the events and sure circumstances to closing, together with approval of the acquisition by the board of administrators of every of Novacor and Trio, and a situation that Trio raises ample financing to finish the acquisition. If the acquisition isn’t accomplished, the LOI will terminate on February 15, 2025, except prolonged by each events.
To contact the creator, e-mail rocky.teodoro@rigzone.com
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