Source Rock Royalties is an Alberta corporation that began operations in May 2013. All shares issued and outstanding are Class A common shares, which provides direct alignment between the interests of management & directors and shareholders, which includes a Canadian-based corporate Pension Fund.
Source Rock Royalties was formed to own and manage royalty interests on petroleum and natural gas assets exclusively in Western Canada.
As a royalty interest owner, we receive top-line revenue from oil and natural gas production, not being subjected to any Crown or third party royalties. In addition, we do not pay any of the costs associated with drilling, equipping, optimizing or maintaining production on the wells located on our royalty interest lands. Finally, we are not responsible for any of the costs associated with abandoning previously productive wells on our royalty interest lands or for restoring the land to its original state. As a royalty interest owner we simply receive payment for a percentage of production from our royalty interest lands.
Our focus is on building a platform of producing royalties that provides balanced exposure to stable, long-life royalty production and low-risk, identifiable upside drilling and enhanced recovery. We are specifically focused on acquiring royalties on core lands of successful and well funded operators in areas that are providing top quartile drilling rates of return. We believe that this focus will allow for a balanced growth / yield corporate strategy and position us to pursue opportunities to create royalty interests by funding earlier stage projects and / or acquire mineral title interests on undeveloped land that does not immediately provide royalty revenue, with the goal of identifying active operating companies to develop such mineral title interests in exchange for keeping a royalty.
We are focused on non-marketed acquisitions and we provide parties selling royalties or mineral title interests with an opportunity to take part of the consideration in common shares of Source Rock Royalties. This approach gives vendors the ability to continue to own part of the assets that they are divesting alongside our shareholders, diversify their ownership into a broader portfolio of royalties and mineral title interests, and potentially reap the benefit of an increase in the value of our shares as we grow.
Source Rock Royalties has (i) varying gross overriding royalty interests in ∼25 sections (∼16,000 acres) of land in the Viking light oil play in west-central Saskatchewan. Our Saskatchewan royalty lands are in the Dodsland, Whiteside, Lucky Hills, Kerrobert, Plato and Prairiedale areas of the Viking play; (ii) a royalty interest in 100+ sections (64,000+ acres) of Viking land interests in east-central Alberta targeting light oil; (iii) a 2.5% gross overriding royalty in greater than 200 sections (greater than 130,000 acres) of land in west-central Alberta with multi-zone, medium depth horizontal development targets; and various gross overriding royalty interests in ∼26 sections (∼17,000 acres) of land in S.E. Saskatchewan & Manitoba, which is being developed for light oil production from various formations.
We receive our royalty revenue from Spartan Energy Corp., a TSX-listed entity, Teine Energy Inc., a private company that is the largest producer and land owner in the west-central Saskatchewan Viking light oil play, Toro Oil & Gas Ltd., a wholly-owned subsidiary of Steelhead Petroleum Ltd., a private company funded by ARC Financial Corp., Point Loma Resources Ltd., a TSXV-listed entity focused on the Mannville / Mississipian fairway in west-central Alberta, and various operators in S.E. Saskatchewan and Manitoba including Crescent Point Energy Corp., Canadian Natural Resources Limited, Spartan Energy Corp., Vermillion Energy Inc. and Tundra Oil & Gas Limited.