California-based Trio Petroleum Corp. has entered a letter of intent to acquire 2,000 acres in the Uinta Basin from private operator Heavy Sweet Oil LLC (HSO). The cash-and-stock deal is worth roughly $2.7 million.

The agreement calls for Trio to pay HSO a non-refundable payment of $150,000 for the option to acquire and develop 2,000 acres of Trio’s choice, the company said in a May 20 press release.

Trio will fund the deal by issuing 1.49 million restricted shares of common stock to HSO. Trio will also pay $850,000 cash for the acquisition and development of Utah’s P.R. Springs tar sands.

Trio said it expects to provide 100% of the capex for the project, with the net profits split equally between Trio and HSO.

The 2,000-acre parcel will support up to 1,000 wells in seven-well pods, according to Trio. The company said it expects the fully developed acreage to provide “upwards” of 50,000 bbl/d within a 20-year life.

“With an expected initial total drilling and completion cost of less than $800,000 per well and declining with scale, we believe the economics and size of the opportunity are superlative and transformative for a company like Trio,” the company said.

Initial product from the wells will be commercial grade asphalt directly from the site for 90% of the production with an estimated 10% balance being a diesel range product, Trio said.

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