Source Rock acquires additional Alberta mineral leases

Executive Summary

• Source Rock Royalties Ltd. has acquired additional Crown mineral leases in Alberta through a joint venture agreement with a private company, expanding its undeveloped land base.
• The acquisition includes 31 sections (19,840 acres) of mineral rights, split between oil sands and petroleum/natural gas (PNG) leases, with Source Rock holding a 50% interest in the joint venture.
• The strategic focus is on acquiring rights in the Mannville Stack heavy oil horizons to facilitate farming out development rights in exchange for royalty interests, targeting both near-term drilling potential and long-term upside.

Key Details

• Lease Acquisition: The joint venture has leased 31 sections (19,840 acres) of Crown mineral rights in Alberta.
• Lease Composition:
  • 15 sections (9,600 acres) of 15-year oil sands leases.
  • 16 sections (10,240 acres) of five-year PNG (petroleum and natural gas) leases.
• Joint Venture Structure:
  • Source Rock holds a 50% interest in the JV company.
  • The JV partner is a private company whose principal is a professional geologist with 25 years of prospecting experience in the Western Canadian sedimentary basin.
  • The agreement involves jointly leasing Crown mineral rights to farm out the right to develop such leases in exchange for a royalty interest.
• Strategic Focus:
  • Targeting heavy oil horizons within the Mannville Stack.
  • Potential for exploitation using multilateral drilling technologies.
  • Goal is to establish an undeveloped land base with exposure to near-term drilling in areas developed by high-quality operators and longer-term upside in less developed areas.
• Future Plans: The parties will continue to evaluate, post for leasing, and bid on additional Crown mineral leases.

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