Globe & Mail 08:04 AM EDT, 04/12/2021 (MT Newswires) -- Topaz Energy Corp. (TPZ.TO) said Monday that it entered into a nonbinding agreement to acquire a 2% gross overriding royalty interest in the Peace River High area of Alberta from with Tamarack Valley Energy Ltd. (TVE.TO) for $32.0 million. Closing is scheduled in June.
The royalty covers crude oil, conventional natural gas and natural gas liquids from about 300,000 gross acres of Tamarack's developed and undeveloped lands that are focused on the Charlie Lake light oil development.
Average production from the lands exceeded 13,000 boe/d in March and Tamarack is expected to maintain it at 12,000 to 13,000 boe/d through future capital development and a $60 million minimum capital development commitment.
Topaz said the lands are contiguous with its existing 420,000 gross royalty acres and represents a 71% increase to Topaz's royalty acreage in the Peace River High area.
The company expects to generate average annualized royalty production of 250 boe/d in 2021 and 2022, or 2% royalty production growth to Topaz. Royalty production revenue is estimated at $4.4 million and $4.0 million in 2021 and 2022, respectively.
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