/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR DISSEMINATION IN THE U.S./
CALGARY,
AB, March 27, 2023 /CNW/ - Source Rock
Royalties Ltd. ("Source Rock") (TSXV: SRR) (TSXV: SRR.WT), a
pure-play oil and gas royalty company with an established portfolio
of light oil focused royalties, announces that it has closed the
acquisition of a 5% gross overriding royalty (the "GORR") in three
light oil properties in Central
Alberta (the "GORR Lands"). The purchase price was
$1.6 million, and the transaction has
an effective date of January 1,
2023.
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.
Capital Commitment
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.
President's Message
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
About Source Rock Royalties
Ltd.
Source Rock is a pure-play oil and gas royalty company with an
existing, light oil focused portfolio of royalty interests
concentrated in southeast Saskatchewan, east-central Alberta, west-central Alberta and west-central Saskatchewan. Source Rock targets a balanced
growth and yield business model, using funds from operations to
pursue accretive royalty acquisitions and to pay dividends. By
leveraging its niche industry relationships, Source Rock identifies
and acquires both existing royalty interests and newly created
royalties through collaboration with industry partners. Source
Rock's strategy is premised on maintaining a low-cost corporate
structure and achieving a sustainable and scalable business,
measured by growing funds from operations per share and maintaining
a strong netback on its royalty production.
Forward-Looking
Statements
This news release includes forward-looking statements and
forward-looking information within the meaning of Canadian
securities laws. Often, but not always, forward-looking information
can be identified by the use of words such as "plans", "is
expected", "expects", "scheduled", "intends", "contemplates",
"anticipates", "believes", "proposes" or variations (including
negative and grammatical variations) of such words and phrases, or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements in this news release include statements
regarding the Capital Commitment, including the funds expended by
the Royalty Partner in connection therewith and the timing and
nature of such expenditures, the future operations on the GORR
Lands and the effect of such operations on the production from the
GORR Lands, expectations regarding the decline rate of the existing
production from the GORR Lands, expectations for results from
future operations on Source Rock's royalty lands, expectations
regarding commodity prices, Source Rock's expected working capital,
Source Rock's growth strategy and expectations with respect to
future royalty acquisition and partnership opportunities, and the
ability to complete such acquisitions and establish such
partnerships. Such statements and information are based on the
current expectations of Source Rock's management and are based on
assumptions and subject to risks and uncertainties. Although Source
Rock's management believes that the assumptions underlying these
statements and information are reasonable, they may prove to be
incorrect. The forward-looking events and circumstances discussed
in this news release may not occur by certain dates or at all and
could differ materially as a result of known and unknown risk
factors and uncertainties affecting Source Rock. Although Source
Rock has attempted to identify important factors that could cause
actual actions, events or results to differ materially from those
described in forward-looking statements and information, there may
be other factors that cause actions, events or results to differ
from those anticipated, estimated or intended. No forward-looking
statement or information can be guaranteed. Except as required by
applicable securities laws, forward-looking statements and
information speak only as of the date on which they are made and
Source Rock undertakes no obligation to publicly update or revise
any forward-looking statement or information, whether as a result
of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy of
this release.
SOURCE Source Rock Royalties Ltd.