Mineral Rights & Royalties

Topaz Energy Acquires Additional Royalty Interests in British Columbia

By Sakshi Jain
July 15, 2021
2 minutes read
Gas Flare

TSX-listed Topaz Energy Corp. has entered into a definitive agreement with Calgary-based Tourmaline Oil Corp. to acquire newly-created gross overriding royalty (GORR) interests on natural gas, crude oil, and condensate production from approximately 296,000 gross acres of developed and undeveloped lands in north-east British Columbia (NEBC), for a total cash consideration of C$145 million. As a result of the acquisition, Topaz Energy’s existing, contiguous northeast British Columbia Montney royalty lands will increase by 53%, and it will own royalty interests on 100% of Tourmaline Oil’s NEBC Montney acreage.

The assets acquired consist of GORR interests on natural gas, crude oil, and condensate production from approximately 296,000 gross acres of developed and undeveloped lands in the Montney play area of NEBC, with approximately 1,700 future drilling locations identified. The current average daily production attributable to the acquired interest is approximately 50,000 barrels of oil equivalent per day (boe/d), of which approximately 81% is gas.

Under the terms of the deal, the GORR interests to be acquired are 4% on natural gas production from the NEBC properties until December 31, 2023 with a 3% GORR interest on natural gas production thereafter, and 2.5% GORR interest on crude oil and condensate production from the asset.
In May 2021, Topaz Energy had entered into a definitive agreement with Tourmaline Oil to acquire newly-created GORR interests on production from approximately 535,000 gross acres of developed and undeveloped lands in NEBC, as well as a 10% working interest in the Gundy Facility complex, for a total cash consideration of C$245 million.

Calgary-based Topaz Energy is focused on the acquisition and development of royalty and infrastructure assets in Canada. The company was formed in October 2019 through the spin-off of certain royalty interests and natural gas processing assets by Tourmaline Oil.

TSX-listed Tourmaline Oil is engaged in the acquisition, exploration, development, and production of oil & gas properties in Western Canada, with a focus on three core operating areas in the Alberta Deep basin, NEBC, Montney Complex, and Peace River High Complex.

The transaction is subject to customary closing conditions, and is expected to be completed on August 3, 2021.

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