Trio Petroleum, Croverro Set 14-Well Heavy Oil Program in Lloydminster Region

Trio Petroleum, Croverro Set 14-Well Heavy Oil Program in Lloydminster Region

Trio Petroleum has signed a farm-in and development agreement with Croverro Energy for up to 14 multilateral heavy oil wells in the Lloydminster region straddling Alberta and Saskatchewan, World Oil reports.

Market Impact

The agreement covers five potential wells in Alberta and nine in Saskatchewan, plus a separate well re-entry opportunity at Rivercourse and the acquisition of producing oil properties, according to World Oil. Croverro, a Calgary-based heavy oil operator, will stay on as operator of the assets. Alberta targets include Lloyd South and Rivercourse, while the Saskatchewan side covers Lloyd East, Paynton, Hillmond and Marshall. Trio said the 14-well inventory is contemplated over roughly 18 months, with development potentially starting in the near term.

Financially, Trio can elect into successive two-well earning programs, starting with a C$450,000 prospect fee for the initial two wells. For applicable projects, Trio would fund approximately C$1.8 million in development capital in exchange for an 80% revenue interest until costs are recovered, dropping to 60% after payout. Some opportunities carry different terms, the company said. The program relies on multilateral horizontal wells, drilling multiple lateral branches from a single wellbore, to work the thin but laterally extensive heavy oil reservoirs common to the Lloydminster area. Trio Chairman and CEO Robin Ross said the deal “represents a strong combination of near-term development potential, scale and operating expertise that fits right into our growth plans.”

What It Means for Subcontractors

• Drilling and workover crews serving the Lloydminster corridor (Lloyd South, Lloyd East, Paynton, Hillmond, Marshall, Rivercourse) should expect near-term bid activity as the first two-well earning program is elected, with the broader 14-well inventory spread over about 18 months.
• Multilateral horizontal drilling requires specialized directional drilling, casing and completions expertise. Companies with multilateral wellbore experience in heavy oil plays are positioned to compete for these packages as they come up.
• The Rivercourse well re-entry offers a distinct, likely shorter-cycle opportunity for workover and re-entry service providers separate from the new-drill program.
• Because Trio is paying a C$450,000 prospect fee just to earn into the first two wells, treat this as a staged commitment: crews should track Trio’s public updates on which two-well tranches get elected before assuming firm rig schedules.
• Trio has signaled it will keep evaluating additional producing-property acquisitions across Western Canada, so service providers in Alberta and Saskatchewan heavy oil regions may see follow-on demand beyond this specific 14-well program.