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Franco-Nevada

Weyburn Unit (Oil)

Weyburn_Area

Location: Saskatchewan, Canada
Operator: Whitecap Resources Inc.
Royalty: NRI: 11.71% / ORR: 0.44% / WI: 2.56%

The Weyburn Unit is located approximately 129 km southeast of Regina, Saskatchewan and encompasses approximately 216 km2 on a gross basis (net 31 km2) in which the Mississippian Midale beds are unitized. As of December 31, 2019, Franco-Nevada held an 11.71% NRI, a 0.44% ORR and a 2.56% WI in the Weyburn Unit. Collectively, these interests provide Franco-Nevada with the second largest economic interest in the Weyburn Unit after Whitecap. Production commenced from the Midale zone within the unitized area in 1955 under primary depletion (solution gas expansion). Formation of the Weyburn Unit occurred in 1963 for the purpose of implementing a waterflood pressure maintenance scheme. In 2000, Cenovus, the operator at that time, began injecting CO2 in a portion of the Weyburn Unit as an enhanced oil recovery (“EOR”) method. The Weyburn Unit is recognized as one of the world’s largest geological CO2 storage projects.

Gross production of the Weyburn Unit is approximately 25,000 Boe/d of light oil. Weyburn has a significant reserve life and is a highly economic reservoir that has generated robust operating margins in most oil price environments.

For 2019, revenue received by Franco-Nevada from the Weyburn Unit was $33.8 million. Revenue for the NRI is recorded net of deductions for capital and operating costs, which results in increased leverage to the oil price. Oil production, including NGLs, net to Franco-Nevada was 1,867 Boe/d. Franco-Nevada takes product-in-kind for its WI and NRI share of this production and markets it through a third party marketer.

ASSET HIGHLIGHTS

  • CO2 EOR project commenced in 2000
  • CO2 EOR project continues to be rolled out with ~60% of the Weyburn Unit under CO2 flood
  • In 2014, added SaskPower’s Boundary Dam Power Station as second source of CO2

2019 2018 2017
Revenue to Franco-Nevada ($ million)1 $ 33.8 $ 35.5 $ 32.2

1 Revenue refers only to payments made to Franco-Nevada