PrairieSky Royalty Ltd. (“PrairieSky” or the “Company“) (TSX:PSK) is pleased to announce that it has completed 4 separate acquisition transactions for aggregate consideration of $117.3 million, representing approximately 460 BOE per day (83% liquids) of high quality royalty production and over 100,000 acres of mineral title and royalty lands. In the two largest transactions PrairieSky acquired a combined 3.95% royalty interest at Onion Lake, Saskatchewan representing exposure to a best in class long life heavy and thermal oil project, including future phases.
|•||Aggregate purchase price of $117.3 million for 4 transactions, funded entirely from cash on hand.|
|•||Acquired a combined 3.95% royalty interest at Onion Lake, a leading heavy and thermal oil project with top quartile economics, managed by a best in class operator.|
|•||The acquired Onion Lake royalty interests represent current royalty interest production, net to PrairieSky, of 335 bbls per day of oil (100% liquids), with exposure to more than 12,000 bbls per day of future development phases and includes a 50% ownership interest in related seismic assets.|
|•||In connection with the remaining 2 transactions, PrairieSky acquired approximately 125 BOE per day (39% liquids) of third party royalty production and over 100,000 acres of mineral title and royalty lands in the south, central and deep basin areas of Alberta, with exposure to fee leasing opportunities in the Mannville, Viking and Cardium and overriding royalties in the Montney.|
|•||Additional tax pools of approximately $63 million.|
“Over the past several months PrairieSky has continued to identify and execute on opportunities to expand its land and royalty portfolio to new and emerging plays,” commented Andrew Phillips, President and CEO of PrairieSky. “The acquired royalty assets at Onion Lake represent a meaningful entry into a high quality thermal oil project with growth potential and a best in class cost structure. The operator of the project is a well-capitalized, industry leader in heavy oil technology driven plays, with a long track record of success. The acquisitions are consistent with PrairieSky’s long term strategy, and provide an entry point into a new asset class and assets that have similar duration to PrairieSky’s existing portfolio. We expect the acquired assets will be cash flow and production accretive to shareholders in the near, medium and long term. PrairieSky continues to see quality acquisition opportunities including small and medium sized potential transactions, and will remain selective and disciplined in our evaluation of new royalty opportunities.”
An updated presentation is currently available on the investor information page of PrairieSky’s website, http://www.prairiesky.com/investors.