Sayer Energy Advisors has been engaged to assist Response Energy Corporation (“Response” or the “Company”) with the sale of certain of its non-core properties (the “Properties”). The Properties include producing properties in the Blackfoot, Lone Pine Creek, Ewing Lake and Wildmere areas West of the 4th Meridian and in the Garrington, Lanaway, Ferrier, Willesden Green, Pembina, Crystal, Brazeau, Highvale and Kaybob areas West of the 5th Meridian.
Non-producing properties in this offering include properties in the Medicine Hat, Milo, Davey, Huxley, Chigwell, Ferrybank, Nelson, Wainwright, Leduc/Woodbend, Athabasca and Atmore areas West of the 4th Meridian, in the Sylvan Lake, Wilson Creek, Cherhill and Waskahigan areas West of the 5th Meridian and in the Chicken and Hamelin Creek areas West of the 6th Meridian.
Response holds a 100% working interest in many of the Properties and it operates most of the Properties. Recent production (Q1 2017 sales) net to the Company from the Properties has averaged approximately 412 boe/d, consisting of 1.7 MMcf/d of natural gas sales and 133 barrels of oil and natural gas liquids per day.
As of May 6, 2017, the Response-operated Properties collectively have a deemed net asset value of $10.1 million (deemed assets of $16.2 million, deemed liabilities of $6.1 million), with an LMR ratio of 2.66.
Some of the Properties were previously held by GAMET Resources Ltd. (“GAMET”), a private company which was acquired by Response in September 2016. The balance of the Properties are Response-owned properties.
Prior to the September 2016 acquisition of GAMET by Response, Trimble Engineering Associates Ltd. (“Trimble”) prepared an independent reserves evaluation of GAMET’s properties as part of GAMET’s year-end reporting (the “Trimble Report”). The Trimble Report is effective September 30, 2015 using Trimble’s October 1, 2015 forecast pricing.
Response prepared an internal reserves evaluation of certain of its properties specifically for this divestiture (the “Response Report”). The Response Report is effective June 1, 2017 using GLJ’s 2017-01 forecast pricing.
Trimble and Response estimate that, as of the dates of the evaluations, the Properties contained remaining proved plus probable reserves of 3.6 million barrels of oil and natural gas liquids and 18.7 Bcf of natural gas (6.7 million boe), with an estimated net present value of $65.6 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, June 29, 2017.
For further information please feel free to contact: Tom Pavic, Ben Rye, Jill Switzer, Ryan Ferguson Young 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