Royalty Divestiture: 1537974 Alberta Ltd. — Gull Lake, Saskatchewan

1537974 Alberta Ltd. (“153” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of its oil and natural gas royalty interests located in the Gull Lake area of Saskatchewan (the “Property”). 

At Gull Lake, 153 holds royalty interests generally between 6.5%-15.0% in certain lands and wells based on 25.72% of production. The Property is operated by Whitecap Resources Inc. 

Average daily royalty production net to the Company from the Property for the six months ended June 30, 2021 was approximately four barrels of oil per day and three Mcf/d of natural gas (four boe/d).

The Company’s average monthly royalty income from the Property for the six months ended June 30, 2021 was approximately $7,000/month, or $84,000 on an annualized basis. 

In 2019, Whitecap drilled the following three wells on the Property: 101/09-30-013-19W3/0, 101/16-30-013-19W3/0 and 102/16-30-013-19W3/0. The following two wells — 101/08-30-013-19W3/0 and 102/08-30-013-19W3/0 — were drilled by Whitecap on the Property in February and March of 2021.

One section north of the Company’s lands, at Section 31-013-19W3, Whitecap has drilled two horizontal wells per LSD in the Cantuar Formation. The offsetting Whitecap production suggests further drilling on 153’s royalty lands could double the number of wells on the Property. 

The Company also believes water injection could increase the production rate from its royalty wells. To the northwest of the Company’s lands in Section 36-13-20W6 and Section 01-014-20W3, Whitecap owns water injection wells at 191/09-35-013-20W3/0 and 192/16-01-014-20W3/0.

Summary information relating to this divestiture is attached to this correspondence. More specific information is available at A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement (copy attached).

Offers relating to this divestiture will be accepted until 12:00 pm on Thursday, October 14, 2021.

For further information please feel free to contact: Ben Rye, Grazina Palmer or Tom Pavic at 403.266.6133.


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