Pursuant to the Royalty Acquisition, Topaz will acquire a newly created gross overriding royalty interest on predominantly crude oil production on developed and undeveloped lands in the Clearwater area of Alberta (“Clearwater”). In addition, Tamarack will provide a two year capital commitment of $80 million. Topaz will fund the Royalty Acquisition from its available cash on hand.
Current production from the Royalty Acquisition lands is estimated at 2,000 boe/d which Tamarack expects will increase to 10,000 boe/d over the next three years in conjunction with an expansion of its capital plan. The Royalty Acquisition is expected to close on or before February 28, 2021 unless amended by mutual agreement of the parties, subject to entering into definitive agreements and satisfaction of customary closing conditions including Tamarack completing the acquisitions it announced today.
Topaz Activity Update
There are currently 12 rigs committed to resume drilling activity in January 2021 on the Company’s royalty lands operated by Tourmaline following previously scheduled holiday downtime throughout the month of December.
There is currently one active drilling rig on Topaz’s existing Clearwater royalty acreage. The operator recently fulfilled its contractual two-well drilling commitment and the balance of consideration for the previously disclosed royalty acquisition in the Clearwater has been released from escrow. Based on encouraging results, the operator has expanded its active drilling program and expects to drill at least two additional wells in the near term on Topaz’s royalty acreage. Topaz recently participated alongside the operator in an acreage acquisition to further expand its royalty acreage in the Clearwater.
ABOUT THE COMPANY
Topaz is a unique royalty and energy infrastructure company focused on generating free cash flow growth and paying reliable and sustainable dividends to its shareholders, through its strategic relationship with one of Canada’s largest natural gas producers, Tourmaline, an investment grade senior Canadian E&P company, and leveraging industry relationships to execute complementary acquisitions from other high-quality energy companies, while maintaining its commitment to environmental, social and governance best practices.