Trio Petroleum Corp, a company listed on the NYSE American under the ticker TPET, announced that its Canadian subsidiary has acquired 24 oil wells in Saskatchewan’s Lloydminster region from Marlin Resources Ltd., a local operator in the area. The deal includes four currently producing wells and 20 shut-in heavy-oil wells, along with a water disposal facility.
According to the company, the acquired assets currently produce approximately 37 barrels of oil per day. Trio says the transaction also brings potential for further development, including a planned multilateral well and a program to bring additional existing wells back into production.
Deal Terms and Development Plans
As payment for the 24 wells, Trio is providing Marlin with CDN$800,000 in cash along with an underutilized water disposal asset. The company said the cash payment, along with planned development and workover spending, will be funded using cash already on hand.
A central piece of the acquisition is a proposed multilateral well targeting the Cummings reservoir, to be located on the N/2 of Section 9-48-23W3. The design would use multiple horizontal branches drilled from a single surface location to reach roughly 4,000 meters of the target reservoir. Trio has budgeted approximately CDN$1.2 million for drilling, completion and equipping of this well. The company pointed to a nearby Cummings multilateral development involving Canadian Natural Resources and other operators, noting that comparable wells in the area are producing around 375 barrels of oil per day.
Separately, Trio has set aside about CDN$425,000 for a workover, reactivation and recompletion program aimed at increasing output from existing wells on the acquired lands.
Water Disposal Asset Seen as Cost Saver
As part of the transaction, Trio is also acquiring a water disposal facility that the company says is positioned to better serve its existing wells, the newly acquired wells, and future development in the area. Trio stated that the facility’s location is expected to shorten water-hauling distances and lower disposal costs, while also opening the door to additional revenue from third-party water disposal and associated skim-oil recovery.
Robin Ross, Chairman and Chief Executive Officer of Trio Petroleum Corp, said the company expects the transaction’s value to extend well beyond the production being acquired today. He said the existing-well workover program is intended to meaningfully increase output, while the proposed Cummings multilateral well adds a significant new drilling opportunity on the acquired lands. Ross added that, based on current production levels, the company estimates the purchase price per flowing barrel reflects a discount relative to the average market price for comparable producing assets, and described the deal as another step in growing Trio’s Canadian asset base.
Key Figures in Trio Petroleum's Lloydminster Acquisition
Trio Petroleum describes itself as an independent oil and gas company focused on acquiring, developing and optimizing properties across North America, with a stated strategy of buying producing assets at favorable valuations and pursuing further production growth through drilling and other development work.
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