Sayer Energy Advisors has been engaged to assist Canamax Energy Ltd. with the sale of certain non-core oil and natural gas properties located in the Hardy area of Saskatchewan and in the Retlaw area of Alberta (the “Properties”).
Recent production net to Canamax from the Properties has averaged 236 boe/d, consisting of 860 Mcf/d of natural gas and 93 barrels of oil and natural gas liquids per day.
In the Hardy area of Saskatchewan, Canamax holds an average 98.5% operated working interest in 43.9 gross (43.35 net) sections of land on which there are two wells producing oil from the Bakken Formation. The Hardy property is located approximately 150 kilometres south of Regina and less than one kilometre north of the United States border.
Current production from Hardy is approximately 48 barrels per day of 40° API oil. The Hardy property is currently cash flow positive. As of September 28, 2016, the Hardy property had a deemed net asset value of $690,294.54 (deemed assets of $1,320,681.75 and deemed liabilities of $630,388.21), with an LLR rating of 2.10.
At Retlaw, Canamax holds an interest in 51 sections of land. The Company has identified six distinct upside areas at Retlaw which include drilling and recompletion upside in many zones, including the Glauconitic, Ostracod, Lower Mannville, Sunburst, Belly River, Second White Specks, and Ellerslie formations.
Current production from the Retlaw property is 188 boe/d, consisting of approximately 45 barrels of oil and natural gas liquids per day and 860 Mcf/d of natural gas. The Retlawproperty is currently cash flow positive. As of October 1, 2016, the Retlaw property had a deemed net asset value of $1,029,425.68 (deemed assets of $5,862,699.68 and deemed liabilities of $4,833,278.00), with an LLR rating of 1.21.
GLJ Petroleum Consultants Ltd. estimates that as of December 31, 2015, the Properties contained remaining proved plus probable reserves of 553,000 barrels of oil and natural gas liquids and 1.2 Bcf of natural gas (757,000 boe), with an estimated net present value of $6.9 million using forecast pricing at a 10% discount.
Summary information relating to this divestiture is attached to this correspondence. More specific information is available at www.sayeradvisors.com. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement (copy attached).
Cash offers relating to this divestiture will be accepted until 12:00 pm on Thursday, December 15, 2016.
For further information please feel free to contact: Ben Rye, Tom Pavic, Ryan Ferguson Young, Jill Switzer or myself at 403.266.6133.
Alan W. Tambosso, P.Eng. P.Geol.
SAYER ENERGY ADVISORS
1620, 540 – 5th Avenue SW
Calgary, Alberta T2P 0M2
P: 403.266.6133 C: 403.650.8061 F: 403.266.4467