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Agreement to Sell Oil and Gas Royalties - Maple Leaf 2011 Energy Income LP

November 20, 2014



Further to the announcement of June 17, 2014 Maple Leaf 2011 Energy Income Limited Partnership (“Maple Leaf 2011 LP”) is pleased to announce that it has entered into a definitive purchase agreement with Maple Leaf Royalties Corp. (“ML Royalties Corp”)  a TSX Venture listed company (symbol MPL), pursuant to which it has agreed to sell its royalty interests in 14 oil and gas wells located in west central Alberta and royalty payments in respect of such royalties received and accrued since September 1, 2014 (the “Oil & Gas Royalties”) in consideration of the issuance and delivery of 15,151,515 common shares (the “Purchase Price Shares”) of ML Royalties Corp  at the deemed price of $0.66 per share, representing a total deemed consideration of $10 million.

This transaction will constitute the Liquidity Event of Maple Leaf 2011 LP. The Purchase Price Shares will be distributed to investors once all closing adjustments have been satisfied but in any event prior to 60 days following the divestiture and the Maple Leaf 2011 LP will be wound-up.

The transaction is expected to close on or about December 5, 2014.  The closing of the transaction is subject to the satisfaction of conditions customary for transactions of this nature and the receipt of all required regulatory approvals, including the acceptance of the TSX Venture Exchange.

Maple Leaf 2011 LP will issue a subsequent news release once all regulatory approvals have been received.

Asset Details

The following tables summarize the evaluation by Sproule Associates Limited (“Sproule”) of the petroleum and natural gas reserves of the Oil & Gas Royalties.  The net present values of the reserves are presented on a before income tax basis and are based on annual projections of net revenue, which were discounted at various rates. Calculated net present values are not necessarily representative of fair market value.  The pricing assumptions that formed the basis for the revenue projections were based on Sproule’s August 31, 2014 commodity price forecast. The reserve estimates were made in accordance with NI 51-101 and COGE Handbook reserve definitions.



Estimated net production from the assets for the month of August 2014 was approximately 99 boe per day, consisting of about 22 bbl per day oil, 12 bbl per day natural gas liquids, and 390 Mcf per day. Estimated field cash flow for the same month is $120,000.

The Transaction
The general partner of Maple Leaf LP engaged Sayer Energy Advisors to market the Oil & Gas Royalties to several qualified potential purchasers.

Due to the declared conflicts of interest of certain board members of the board of the general partner of the Maple Leaf 2011 LP and the board of ML Royalties Corp, the bids received from Sayer’s marketing process were provided to two financial advisory firms for independent review and recommendation to the board of the general partner of Maple Leaf LP which bid should be accepted.

Both independent financial advisory firms recommended the acceptance of the ML Royalties Corp bid.

As well, the Board of Directors of ML Royalties Corp, due to certain declared conflicts of interest, formed an independent special committee to review and approve the transaction on its behalf.  

The Purchase Price Shares will be subject to a statutory four month restricted period under National Instrument 45-102.  The Purchase Price Shares will also be subject to a contractual restricted resale period, with one-third being released from such restriction on each of the four, eight and 12 month anniversaries of the closing date of the transaction. Holders of the Purchase Price Shares will receive any cash distributions paid during the restricted resale period.

“We are very pleased with the value received,” commented Maple Leaf 2011 LP CEO Shane Doyle. “We see a solid and experienced management team, significant growth opportunities and strong income distribution potential from ML Royalties Corp”

About Maple Leaf Royalties Corp.

ML Royalties Corp is a publicly traded (TSX Venture, Symbol MPL) company focused on acquiring high quality, professionally selected oil & gas royalty interests on existing producing properties or properties considered prospective for oil & gas development. The mandate of ML Royalties Corp is to provide investors with reliable and sustainable monthly cash distributions and to provide growth through re-investment thereby providing investors with a yield oriented growth investment. ML Royalties currently has approximately $2.5mm of cash or cash equivalents on hand.

ML Royalties Corp aims to make disciplined acquisitions of existing producing oil & gas royalty interests which have long reserves lives, reliable and predictable cash flow and have upside development potential. ML Royalties does not intend to undertake any exploration activities.

Reader Advisory

Forward-Looking Statements:  Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to the timing for completion of the acquisition of the Royalties and the anticipated benefits resulting from the acquisition described in this press release.

Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Maple Leaf 2011 LP believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because Maple Leaf 2011 LP can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: field production rates and decline rates; the ability of Maple Leaf 2011 LP to complete the transaction described in this news release and, once completed, to realize the anticipated benefits of the transaction; the timely receipt of any required regulatory approvals; the ability of Maple Leaf 2011 LP to obtain qualified staff in a timely and cost efficient manner to develop its business; future oil and natural gas prices; currency, exchange and interest rates; and the regulatory framework regarding royalties, taxes and environmental matters. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Maple Leaf 2011 LP undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change, unless required by law.  

Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Maple Leaf 2011 LP and described in the forward-looking information.  

Barrel of Oil Equivalent: Where amounts are expressed on a barrel of oil equivalent (“boe”) basis, natural gas volumes have been converted to boe at a ratio of 6,000 cubic feet of natural gas to one barrel of oil equivalent.  This conversion ratio is based upon an energy equivalent conversion method primarily applicable at the burner tip and does not represent value equivalence at the wellhead.  Boe figures may be misleading, particularly if used in isolation.


Please contact Shane Doyle, CEO


609 Granville Street, Suite 808 Vancouver BC   V7Y 1G5
Tel:  604.684.5742    |   Toll Free:  866.688.5750   |   Fax:  604.684.5748 
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