Trio Petroleum, a California-based oil and gas company, has completed the acquisition of certain petroleum and natural gas properties from Novacor Exploration in the Lloydminster, Saskatchewan, heavy oil region.
The assets include the TWP48 properties, with an imminent closing on the TWP47 assets.
The acquired assets are located in the south-west quarter of Section 19, Township 47, Range 26W3M, and the north-east Section 3, Township 48, Range 24W3M.
Currently, there are seven producing wells on these properties, yielding approximately 70 barrels per day (bpd).
The wells produce heavy crude oil from the McLaren/Sparky and Lloydminster formations.
Production from the wells in Section 19 is subject to Freehold Royalties of 13.5% and a gross overriding royalty of 2%, while Section 3 wells have Freehold Royalties of 15%.
Novacor operates these wells, which are economically viable due to low operational costs and favourable market accessibility.
Trio CEO Robin Ross said: “Our focus remains on acquiring projects that generate immediate cash flow or offer transformative growth potential with strategic investment. We believe that this approach aligns with our long-term vision of creating exponential value while managing risk and resources effectively.”
A reserve report by Petrotech and Associates in August 2024 indicates total proved and probable oil reserves of 91.5 million barrels.
The report also highlights potential upside through multilateral drilling opportunities in the Sparky GP formation, enhancing future production prospects.
Novacor’s current lift cost is C$10.00 ($7.12) per barrel, ensuring Trio’s profitability even in a lower oil price environment.
Trio’s focus on cost management and efficient production techniques positions it to withstand market fluctuations better than competitors with higher operating costs.
The acquisition’s purchase price is $650,000 in cash, paid in two tranches, and 526,536 shares of Trio’s common stock. Trio has committed to registering these shares for resale with the US Securities and Exchange Commission.
A $65,000 good faith deposit was paid to Novacor, applied to the cash portion of the purchase price at the initial closing.
“Trio Petroleum acquires cash flow-positive oil assets in Saskatchewan, Canada” was originally created and published by Offshore Technology, a GlobalData owned brand.
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