Spruce Ridge Resources Ltd. (TSXV: SHL) Friday announced that it has agreed to purchase oil and gas facilities within the Unity area of SW Saskatchewan from Repsol Canada Energy Partnership. The purchase includes 793 ha of natural gas and petroleum rights from the base to the surface of the Mannville Group. The deal carries an average working interest of 84%.
Included in the purchase are heavy oil facilities, pipelines, 5 active oil wells, 10 suspended oil and gas wells, and an active produced water disposal well. The agreement comes with a price tag of $50,000 cash and certain overriding royalties on the production of petroleum material. The price tag takes into account Spruce Ridge’s responsibility for environmental liabilities as well.
Production at the oil and gas wells comes primarily from the McLaren Formation in the Cretaceous Mannville Group, with production occuring at a depth of roughly 660 metres. Net pay of 2 to 4.5 metres is the average in the Salt Lake McLaren pool. The majority of the wells are directional wells with cold, heavy oil production.
Reportedly, the McLaren pool is well-defined from 3D seismic readings and the property has noteworthy undeveloped resource potential.
Spruce Ridge Resources Ltd. last traded on the TSX Venture at $0.16.
FULL DISCLOSURE: Spruce Ridge Resources is a former client of Canacom Group, the parent company of The Deep Dive. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.