The GORR Lands are operated by a private Calgary-based oil and gas company (the “Royalty Partner”) and include all the Royalty Partner’s mineral interests in which they have rights to produce oil. The Royalty Partner’s oil production from the GORR Lands was 420 bbl/d of low-decline light oil in January 2023 (21 bbl/d of light oil royalty production). Approximately 90% of the current oil production from the GORR Lands is under waterflood.
As part of the purchase of the GORR, Source Rock has received a capital commitment for $3.2 million in operations to be completed on the GORR Lands prior to December 31, 2024 (the “Capital Commitment”). Operations associated with the Capital Commitment will be focused on optimizing and recompleting existing wellbores and additional waterflood initiatives.
We are very pleased to add to our portfolio of light oil royalty lands. We have built a relationship with the Royalty Partner over several years and have aligned views on how royalty capital can support the operational and acquisition goals of Canadian oil and gas companies. We are excited to formally establish a working relationship with the Royalty Partner through this initial transaction.
Following completion of this acquisition Source Rock has approximately $11 million of working capital ($0.25 per share) to pursue additional royalty acquisitions and partnerships with oil producers.
Brad Docherty, President & CEO