PrairieSky Acquires Additional Western Canadian Royalty Interests
TSX-listed PrairieSky Royalty Ltd. has signed an agreement to acquire approximately 640,000 net acres of producing and undeveloped royalty interests in Western Canada for a total cash consideration of C$45 million, subject to closing adjustments. The seller has not been disclosed.
The royalty interests acquired includes a 170,000-acre fee mineral title position with multi-zonal leasing, exploration, and development potential. The assets also include an extensive Deep Basin royalty position with a concentration of stacked resource play opportunities.
Under the terms of the agreement, PrairieSky will also acquire ownership of approximately 3,200 sq. km of 3D seismic data and 3,100 km of 2D seismic data covering the assets acquired, plus the company’s existing fee mineral title acreage. The current working interest average daily production from the assets amounts to approximately 650 barrels of oil equivalent per day (boe/d), of which 44% is oil.
“We expect the acquired assets will be cash flow and production accretive to shareholders in the near, medium and long term. We expect to be able to grow the asset at over 5% per year over the next five years through near-term leasing activities and active management of the acquired asset portfolio,” PrairieSky said in a statement.
Calgary-based PrairieSky currently has one of the largest independently-owned portfolios of fee simple mineral title and oil & gas royalty interests located across various producing basins in Alberta, British Columbia, Saskatchewan, and Manitoba.
The deal, which is subject to the receipt of regulatory approvals, is expected to close in February 2021.