Ryland Oil Nabs Calgary Exploration Co. with Saskatchewan Assets
Ryland has acquired all of the issued and outstanding shares of Viceroy Resources Ltd., a private Calgary-based oil and gas exploration company. Viceroy holds a 50% working interest in and to Saskatchewan Crown petroleum leases covering approximately 4,320 acres (or approximately 6 3/4 sections) in southeast Saskatchewan. The lands include 5 existing wells, of which two are currently producing from the Bakken formation, with average total production of approximately 15 barrels per day. Ryland, through Viceroy, will continue to be Operator of the properties.
The total purchase price was C$2,000,000 cash, inclusive of payment for the Viceroy shares and payout of outstanding shareholder loans. In addition, the Viceroy shareholders reserved a 2% overriding royalty on all petroleum substances produced from the lands held at the time of completion of the purchase. Viceroy is debt-free.
The Viceroy properties are contiguous with acreage held by Ryland (through its subsidiary Pebble Petroleum Inc.) in the Roncott Bakken area in the northwest portion of its southeast Saskatchewan properties. Ryland is currently production testing its first horizontal Bakken Formation well on its adjacent acreage and is completing a second horizontal Bakken well. Ryland is drilling its third horizontal Bakken well and has applied for 4 additional horizontal permits in the immediate Roncott area.
Said Ryland Chairman Dick Findley, "While our 345,000 gross and net acres already make Ryland one of the largest holders of PNG rights in southeast Saskatchewan, Viceroy was a strategic acquisition for us. We were able to acquire a sizeable block of lands adjacent to our holdings in the Roncott Bakken area where we are already drilling. This area has historically had some of the best production from vertical wells producing from the Bakken Formation in the Williston Basin and will be an important development area for Ryland. We believe that the acreage is highly prospective for its Bakken potential and that we can significantly expand the commercially productive area of the Roncott Bakken pool through the use of current horizontal drilling and completion techniques."