SOURCE ROCK ROYALTIES ANNOUNCES ALBERTA CROWN MINERAL RIGHTS LEASING JOINT-VENTURE

Executive Summary

• Source Rock Royalties entered a joint‑acquisition agreement with a private company to lease 11 sections (7,040 acres) of Alberta Crown mineral rights for oil sands and PNG projects.
• The leased portfolio consists of 7 sections (4,480 acres) of 15‑year oil‑sands leases and 4 sections (2,560 acres) of 5‑year PNG leases, with each party holding a 50% interest.
• The partnership expands Source Rock’s early‑stage upside exposure and creates a land base for future farm‑out transactions and potential royalty acquisitions.

Key Details

• Joint‑Acquisition Structure: 50 % ownership of all leased mineral rights by Source Rock; the counterpart (“JV Co”) is led by a professional geologist with 25 years of WCSB experience.
• Leased Assets:
• 7 sections (4,480 acres) – 15‑year oil‑sands leases.
• 4 sections (2,560 acres) – 5‑year petroleum & natural gas (PNG) leases.
• Total area: 11 sections = 7,040 acres of Crown mineral rights in Alberta.
• Target Horizons: Heavy‑oil horizons within the Mannville Stack, intended for multi‑lateral drilling technologies.
• Strategic Rationale: Build an undeveloped land base that provides near‑term drilling exposure (via high‑quality operators) and long‑term upside through low‑cost early‑stage entry.
• Future Plans: Continue evaluating, posting for leasing, and bidding on additional Crown mineral leases; pursue farm‑out transactions to monetize the leased assets.
• Financial Position: Current working capital approximately $4.5 million (≈ $0.10 per share).
• Management Comment: Brad Docherty, President & CEO, highlighted the “opportune time” to increase early‑stage upside and expand organic royalty growth through the Leasing JV and subsequent farm‑out deals.

Notable Quotes

“We are excited to establish the Leasing JV and for the prospects that we have gained exposure to through the initial 11 sections of leased mineral rights… it is an opportune time to increase early‑stage upside exposure and expand the potential to organically grow our royalty portfolio.” – Brad Docherty, President & CEO.