Sprott Global Resource Investments Private Equity. Real Assets.
 

Waseca Energy Inc.

In 2008, Sprott Resource Corp. partnered with a top technical team to form Waseca Energy Inc. (“Waseca”). Waseca was a heavy oil exploration and production company operating on 19,103 hectares of leased land in the Lloydminster area bordering central Alberta and Saskatchewan. Land was acquired at a steep discount during the financial crisis. As land prices normalized, Waseca switched its focus to operations, quickly ramping up production to over 4,000 boe/d by mid-2012. In November 2012, Twin Butte Energy Ltd. acquired Waseca for a combination of cash and shares valued at $135 million. Sprott Resource Corp. realized total proceeds from the transaction of $112 million, representing a gain of $68 million and an IRR of 29%.

 

Strong Production Growth

Graph -waseca

 

Waseca Energy Inc. Case Study

Investment $44.2 MM
Realized proceeds: $111.7 MM
Unrealized value: $nil
Timeline: 49 Months
IRR: 29%1
  • Partnered with a top technical team with over 33 years of experience with a major producer
  • Identified economical nature of production in the Lloydminster area
  • Acquired land at a deep discount during financial crisis
  • Ramped up production to over 4,000 boe/d
  • Sold to Twin Butte Energy Ltd. ("Twin Butte") for cash and shares
  • Sold Twin Butte shares in market

1. Internal rate of return (“IRR”) is a non-IFRS performance measure and should not be considered in isolation or as a substitute for any other financial information prepared in accordance with IFRS.  IRR does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers.