Wedoany.com Report-Apr. 14, Trio Petroleum, a California-based oil and gas company, has finalized the purchase of petroleum and natural gas assets from Novacor Exploration in the Lloydminster, Saskatchewan, heavy oil region. The transaction includes the TWP48 properties, with the TWP47 assets expected to close soon.
Novacor operates these wells, which are economically viable due to low operational costs and favourable market accessibility.
The properties are situated in the south-west quarter of Section 19, Township 47, Range 26W3M, and the north-east quarter of Section 3, Township 48, Range 24W3M. Seven wells on these sites currently produce around 70 barrels per day of heavy crude oil from the McLaren/Sparky and Lloydminster formations. The wells in Section 19 carry Freehold Royalties of 13.5% and a 2% gross overriding royalty, while those in Section 3 have Freehold Royalties of 15%.
Novacor continues to operate these wells, benefiting from low operational costs and strong market access, which supports their economic viability. Trio’s CEO, Robin Ross, stated: “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.”
An August 2024 reserve report by Petrotech and Associates estimates total proved and probable oil reserves 91.5 million barrels. The report also identifies opportunities for increased production through multilateral drilling in the Sparky GP formation, promising enhanced output in the future.
With a lift cost of C$10.00 ($7.12) per barrel, Novacor’s operations ensure profitability even during periods of lower oil prices. Trio’s emphasis on cost efficiency and optimized production techniques strengthens its resilience against market volatility compared to competitors with higher expenses.
The acquisition was completed for $650,000 in cash, paid in two installments, and 526,536 shares of Trio’s common stock. Trio plans to register these shares for resale with the US Securities and Exchange Commission. A $65,000 good faith deposit was paid to Novacor, credited toward the cash portion at the initial closing.
This acquisition enhances Trio Petroleum’s portfolio, adding assets with stable production and growth potential. The company aims to leverage these properties to build sustainable value while maintaining operational efficiency in the dynamic energy market.
