Trio Petroleum Moves to Acquire Major Tar-Sand Assets in Utah
Trio Petroleum Corp Pursues Acquisition of Tar-Sand Deposits
In an exciting development for the energy sector, Trio Petroleum Corp (NYSE: TPET), a California-based oil and gas company, has taken a significant step forward by entering into a Letter of Intent to acquire 2000 acres of prime tar-sand deposits located at P.R. Spring in the Unita Basin, Utah. This site is recognized as one of the largest tar-sand deposits in North America, which positions the company for immense potential growth in the energy market.
Potential of the P.R. Spring Project
According to a comprehensive assessment conducted by Dr. Douglas S. Hamilton, a respected geologist, the P.R. Spring area possesses an estimated 6.75 billion barrels of oil in place (OOIP) within its geological boundaries. This substantial figure is supported by extensive geological mapping and analysis of historical petroleum exploration data, underscoring the viability of the project.
Excellent Recovery Potential
The company's plans revolve around developing this site into a successful oil production area. An optimization study led by Dr. Amanda Bustin from Bustin Earth Science Consultants indicates that each typical well in the project could yield about 300,000 barrels of oil. Furthermore, these wells are projected to produce at stable rates exceeding 40 barrels of oil per day. Overall, Trio anticipates that this development could lead to a remarkable production rate of around 50,000 barrels per day once fully operational over an estimated 20-year lifespan.
Production and Environmental Benefits
A noteworthy aspect of this project is the type of products that will be derived from the extraction process. Initial outputs are expected to be primarily commercial-grade asphalt, projected to account for 90% of the production, with the remaining 10% being a high-quality diesel range product. Both outputs are characterized by low sulfur content, positioning them favorably within the market by potentially offering a lower carbon footprint.
Market Viability and Profitability
The asphalt produced is anticipated to command prices above West Texas Intermediate (WTI), while the green diesel could achieve even higher margins when marketed effectively. This favorable pricing situation is complemented by advanced production techniques which enable the separation of asphalt and diesel, enhancing the overall profitability of the P.R. Spring Project.
Strategic Partnerships and Development Plans
Heavy Sweet Oil, LLC, will serve as the operator in collaboration with Valkor Oil and Gas LLC, which specializes in developing sustainable hydrocarbon projects. This partnership is key, as both companies bring expertise in managing heavy oil operations and environmentally responsible methodologies.
In light of this new opportunity, Trio Petroleum has opted to allow its option for an additional 77.75% in Asphalt Ridge to expire, reaffirming their strategic focus on the P.R. Spring acquisition.
Details of the Acquisition
The acquisition process will commence with Trio’s payment of $150,000 to Heavy Sweet Oil (HSO) upon signing the Letter of Intent. This payment is a non-refundable commitment for the option to acquire the specified land and develop the project. Following this, a Definitive Agreement is expected to be signed, at which point Trio plans to issue 1,492,272 restricted shares of common stock to HSO and provide an additional $850,000 in cash aimed at funding the project's development.
Future Commitments
Trio anticipates that it will cover all capital expenditures associated with the project development, with plans to split net profits equally with HSO. The Definitive Agreement is expected to include necessary conditions such as the construction of at least seven production wells within two years following the closing of the acquisition.
Conclusion
Ultimately, Trio Petroleum Corp is poised to transform its operational capabilities through the acquisition of the P.R. Spring Project. This initiative not only reflects the company's commitment to growth but also its dedication to pursuing sustainable and profitable energy solutions.
Frequently Asked Questions
What is the main focus of Trio Petroleum's recent acquisition?
The acquisition primarily focuses on developing significant tar-sand deposits in Utah, enhancing oil production capabilities.
How much oil is estimated to be within the P.R. Spring area?
It is estimated that the P.R. Spring area contains approximately 6.75 billion barrels of oil in place.
What types of products will Trio Petroleum produce?
Trio Petroleum plans to produce commercial-grade asphalt and a high-quality diesel product from the P.R. Spring project.
Who is involved in the operation of the P.R. Spring Project?
Heavy Sweet Oil, LLC, will operate the project in partnership with Valkor Oil and Gas LLC.
What is Trio Petroleum Corp's stock ticker?
Trio Petroleum Corp is traded under the ticker symbol NYSE: TPET on the New York Stock Exchange.
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