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Spruce Ridge Resources to purchase oil wells in Saskatchewan

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Today, Canadian mineral exploration company, Spruce Ridge Resources Ltd., announced it agreed to purchase certain mineral leases with petroleum and natural gas rights, plus oil and gas wells, pipelines, and facilities in the Unity area of southwestern Saskatchewan, Canada.

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Accordingly, this purchase from Repsol Canada Energy Partnership includes 793 ha of petroleum and natural gas rights from surface to the base of the Mannville Group; particularly, with an average working interest of 84%.

About the purchase between Spruce Ridge Resources and Repsol Canada

Moreover, the purchase includes five active oil wells. Also, ten suspended oil and gas wells, heavy oil facilities, pipelines, and an active produced water disposal well.

Worth noting, the purchase price is $50,000 cash and is still subject to adjustments at the closing date. Indeed, Spruce Ridge Resources said in a media release that the purchase price considers the Company’s responsibility for the Environmental Liabilities. For instance, including Environmental Defects and Abandonment and Reclamation Obligations.

In this sense, John Ryan, the Company’s CEO, stated; “We are extremely pleased to have acquired this asset that will enable Spruce to generate cash flow almost immediately. Indeed, the wells were shut-in during March and April 2020 during extremely low crude prices.”

In contrast, “the current crude prices will allow us to start producing from five to seven oil wells with relatively low start-up costs,” added Mr. Ryan.

The wells and the McLaren Pool

Moreover, the acquisition includes a disposal well that will enable Spruce to reduce its operating costs. Besides, it will potentially allow the company to generate additional revenue from 3rd party produced water disposal arrangements. Lastly, the production on the acquired leases is mainly from the McLaren Formation in the Cretaceous Mannville Group at a depth of approximately 660m.

Indeed, the Salt Lake McLaren pool wells are mainly directional with cold, heavy oil (11-12 API) production. Moreover, the McLaren pool has been characterized from 3D seismic interpretations, and the property has significant undeveloped resource potential.

Spruce Ridge Resources Ltd. currently holds a 100% interest in the Great Burnt Copper-Gold Property in Central Newfoundland. Accordingly, this area covers a series of copper ± gold-rich VMS deposits.

Also, Spruce Ridge sold its interest in the Crawford Nickel-Cobalt Sulphide project to Canada Nickel Company Inc. However, it retained ground that contains VMS and gold targets.

Finally, the company holds 8,100,000 shares of Canada Nickel Company and 10,000,000 shares of Noble Mineral Exploration Inc. Besides, it has an option agreement with Magna Terra Minerals Inc. on its Viking/Kramer gold properties in Western Newfoundland.

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