Topaz Energy’s deal to acquire royalty interests from Tourmaline Oil spans across approximately 3 million acres in Western Canada, with over half of the acquired land undeveloped. (Source: Shutterstock)
Calgary, Alberta-based Topaz Energy Corp. completed an acquisition of royalty interests from Tourmaline Oil Corp., boosting its footprint across Western Canada, according to a Nov. 4 press release announcing its third-quarter financial results.
The deal, valued at CA$278.2 million (US$200.92 million), includes gross overriding royalty interests on approximately 3 million acres, with over half of the acquired land undeveloped.
The deal spans across Topaz's core royalty areas, including the Northeast British Columbia Montney, Alberta Deep Basin and Peace River High regions.
The acquisition marks a 50% increase in Topaz's overall royalty acreage, including a 38% expansion in its “premium” Montney rights acreage, Topaz said.
Topaz said it expects the deal to immediately boost its royalty production by 12% and aligns the company with all of Tourmaline's future growth projects.
Following the acquisition, Topaz expects 29 rigs to 31 rigs to be active across the company’s royalty acreage throughout the fourth quarter, including both dedicated rigs and estimated variable activity from other operators.
Additionally, Tourmaline-operated rigs on Topaz's royalty acreage have increased from 13 rigs to 16 rigs during third-quarter 2024, driven by Topaz’s acreage expansion under the deal.
On Oct. 22, Topaz completed a previously announced bought-deal equity financing, which raised CA$201.7 million (US$145.67 million). The company issued 8.05 million common shares at $25.05 per share, which included shares issued upon the full exercise of the over-allotment option granted to underwriters.
In addition to this public offering, Topaz conducted a private placement, selling 209,177 common shares at the same price of $25.05 per share.
The combined gross proceeds from the financing and private placement totaled approximately CA$206.9 million (US$149.42 million), which Topaz used to fund the Tourmaline royalty acquisition.
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