Trio Petroleum Corp announced Sept. 30 that its Canadian subsidiary has acquired 24 oil wells in the Saskatchewan side of the Lloydminster heavy oil patch, part of a deal the company says positions it for further development in the region.
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The wells, four of them producing and 20 currently shut-in, were purchased from Marlin Resources Ltd., according to a release from the company. Trio says the assets currently produce about 37 barrels of oil per day combined.
24-well deal adds to Lloydminster-area production
As consideration for the wells, Trio is paying Marlin CDN$800,000 in cash and transferring an underutilized water disposal asset, according to the company.
The acquisition comes as operators in the region continue to report renewed interest in heavy oil assets, a theme discussed at this year’s Lloydminster Heavy Oil Show, where industry representatives pointed to growth opportunities across the Border City’s oilpatch.
Cummings multilateral well planned for acquired lands
A central piece of the deal is a proposed multilateral well targeting the Cummings formation on the N/2 of Section 9-48-23W3, Trio said. The well would use multiple horizontal branches from a single surface location to reach roughly 4,000 metres of reservoir, with Trio budgeting about CDN$1.2 million for drilling, completion and equipping.
The company pointed to a nearby Cummings multilateral development by Canadian Natural Resources and other operators as support for the concept, saying similar wells in the area are producing approximately 375 barrels of oil per day.
Workover program targets shut-in wells
Separate from the new drilling, Trio has budgeted CDN$425,000 for a workover, reactivation and recompletion program aimed at bringing additional production online from the existing well inventory, according to the company.
Workover and reactivation programs typically require service rig crews, well-servicing contractors and trucking to bring shut-in wells back into production, work that has historically supported employment for oilfield service companies operating on both sides of the Lloydminster border region.
Water disposal facility to serve the region
As part of the transaction, Trio is also acquiring a water disposal facility the company says is better positioned to serve its existing wells, the newly acquired assets and future development in the area.
Trio said the facility’s location is expected to reduce water-hauling distances and disposal costs, while also creating opportunities for third-party water-disposal revenue and associated skim-oil recovery.
Robin Ross, chairman and chief executive officer of Trio Petroleum Corp, said the company expects the deal to deliver more than the production acquired on paper.
“The existing-well workover program provides a defined path intended to materially increase production, while the Cummings multilateral well adds a significant new drilling opportunity on the acquired lands,” Ross said. “This acquisition represents another important step in growing Trio’s Canadian asset base.”
Trio Petroleum Corp, which trades on the NYSE American under the symbol TPET, describes itself as an independent oil and gas company focused on acquiring, developing and optimizing producing properties across North America.
The Lloydminster transaction follows a string of recent land and production activity in the region, including a Saskatchewan Crown land sale earlier this year that drew more than $4.5 million in bids concentrated around Lloydminster. Industry watchers have pointed to that activity, along with the Cummings well project, as further evidence that investment in the heavy oil patch is picking up heading into next year.
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