(WO) — Trio Petroleum has signed a farm-in and development agreement with Croverro Energy covering up to 14 new multilateral heavy oil drilling opportunities in the Lloydminster region of Alberta and Saskatchewan, Canada.
Image: Trio Petroleum
The multi-year program includes five potential wells in Alberta and nine in Saskatchewan, along with a separate well re-entry opportunity at Rivercourse and the acquisition of producing oil properties. Croverro, a Calgary-based heavy oil operator, will remain operator of the assets.
The Alberta drilling inventory includes opportunities at Lloyd South and Rivercourse, while the Saskatchewan program covers Lloyd East, Paynton, Hillmond and Marshall. Trio said development could begin in the near term, with the 14-well inventory contemplated over approximately 18 months.
Under the agreement, Trio can elect to participate in successive two-well earning programs. For the initial two-well program, the company would pay Croverro a C$450,000 prospect fee.
For applicable projects, Trio would fund approximately C$1.8 million in development capital in exchange for an 80% revenue interest until its costs are recovered, declining to 60% after payout. Certain opportunities carry different participation terms, the company said.
The development will target the thin, laterally extensive heavy oil reservoirs of the Lloydminster region using multilateral horizontal wells. The technique uses multiple lateral branches from a primary wellbore to increase reservoir contact and potentially improve recovery and capital efficiency.
“We believe the Croverro opportunity represents a strong combination of near-term development potential, scale and operating expertise that fits right into our growth plans,” said Trio Chairman and CEO Robin Ross.
The farm-in builds on Trio’s existing operations in Alberta and Saskatchewan as the company seeks to expand its Canadian oil business through acquisitions, development drilling and operating partnerships. Trio said it will continue evaluating additional producing-property acquisitions and development opportunities across Western Canada.
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