Source Rock Royalties Ltd. announced that it has closed the acquisition of fee title mineral interests in two quarter sections of land (the "Fee Title") and a 2% gross overriding royalty (the "GORR") in approximately 5,800 gross acres (9 sections) of land in S.E. Saskatchewan (the "GORR Lands"). The combined purchase price for the transactions was $3.3 million and they have an effective date of May 1, 2023. The Fee Title is comprised of the following perpetual mineral interests: 20% interest in 160 gross acres that is leased at a 20% royalty rate; and 16.67% interest in 160 gross acres that is leased at a 20% royalties rate.

Both Fee Title interests recently had initial drilling completed by the respective operators. The purchase of the 20% Fee Title interest includes a commitment to drill two additional horizontal wells on or before October 31, 2023, however it is anticipated that both wells will be drilled in June 2023. Each Fee Title commitment well not satisfied will result in $200,000 in damages being due to Source Rock.

The GORR Lands. The GORR Lands: A portion of the GORR Lands are contiguous to or directly offsetting Source Rock's existing royalty lands that are actively and successfully being developed. The majority of the GORR lands are 100% working interest lands owned and operated by Anova Resources Inc., which provide Source Rock with exposure to multiple new areas that are highly prospective for future development of the Frobisher formation.

The Frobisher is a shallow, conventional light oil play that does not require hydraulic fracturing; it is one of the most economic light oil plays in Canada. Portions of the GORR Lands were also prospective for future development of the Midale and Bakken formations. Significant Drill Commitment.

As part of the purchase of the GORR, Source Rock has received a drill commitment for 12 additional horizontal wells (each a "Drill Commitment Well") to be drilled on Source Rock's royalty lands prior to May 31, 2025. Source Rock is entitled to $125,000 in damages for each Drill Commitment Well not drilled before the Drill Commitment Deadline. The Drill Commitment Deadline may be automatically extended as follows: Upon the first time that the price of the NYMEX West Texas Intermediate Light Sweet Crude Oil Futures Contract (in U.S. Dollars) settles below $60.00 for 30 consecutive days, it shall be extended by 90 days; and Every time thereafter that the price of WTI settles below $60.00 for 30 consecutive days, it shall be extended by an additional 30 days.