Canada’s Topaz Energy Has Strong First Year

Canadian royalty and infrastructure energy company Topaz Energy said March 17 it achieved its strategic objectives in its first full year of operations, generating operating earnings (Ebitda) of C$89.3 (US$71.9)mn and dividends of C$73.1mn in 2020.

Topaz was spun out as a royalty subsidiary by Tourmaline Oil in October 2019 and a year later raised C$250.1mn in an initial public offering and a secondary offering from treasury. It raised another C$145.3mn from a private placement in the summer of 2020.

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Earlier this year, Topaz increased its royalty position in the Deep Basin with the acquisition from Tourmaline of gross overriding royalties (GORR) on an additional 720,000 acres of developed and undeveloped land, building on its initial 2.2mn acres of royalty interest lands. Late last year, it acquired royalty interests on 149,000 gross acres in the Clearwater light oil area in north central Alberta and built on that position earlier this month with an agreement to acquire a 4% GORR on another 45,000 acres.

It now owns royalty interests on about 90% of Tourmaline’s acreage. Tourmaline is Canada’s largest natural gas producer, with Q4 2020 production of about 1.6bn ft³/day and 2021 output expected to average nearly 1.9bn ft³/day.

Royalty production by Topaz averaged 10,335 barrels of oil equivalent (boe)/day in Q4 2020 and 10,144 boe/day in 2020, generating royalty production revenue of C$17.6mn and C$58.9mn, respectively. Natural gas production averaged 56.4mn ft³/day in 2020, while crude oil and natural gas liquids production averaged 737 boe/day.