Sayer Energy Advisors has been engaged to assist Tangle Creek Energy Ltd. (“Tangle Creek” or the “Company”) with the marketing of its non-core producing oil and natural gas properties in the Chip Lake, Leaman, McLeod, Pine Creek and Sinclair areas of Alberta, as well as its non-producing oil and natural gas properties in the Doe/Pouce Coupe, Grimshaw, Kakut, Pembina, Ricinus, Rycroft, Spirit River and Valhalla areas of Alberta (the “Properties”).
Most of the Properties were acquired by Tangle Creek as part of its recently announced acquisition of assets from RMP Energy Inc. (“RMP”). Recent sales net to Tangle Creek from the Properties have averaged approximately 430 boe/d (2.1 MMcf/d of natural gas, 26 barrels of oil per day and 51 barrels of natural gas liquids per day).
At Chip Lake, Tangle Creek has various working interests in seven producing oil wells and five producing natural gas wells. Recent sales net to Tangle Creek from the property have averaged approximately 190 boe/d. The Company has identified numerous locations to drill horizontal wells to further develop the Rock Creek reserves on its land and additional upside has been identified in the Wilrich Formation.
Tangle Creek holds non-operated working interests in 11 Mannville natural gas wells in the Pine Creek area, from which the Company’s net sales have recently averaged approximately 200 boe/d. The Company’s properties at Leaman, McLeod and Sinclair produce a combined net total of 40 boe/d.
Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of Tangle Creek’s properties, including the Chip Lake property as part of the Company’s year-end reporting (the “Sproule Report”). The Sproule Report is effective December 31, 2016 using Sproule’s December 31, 2016 forecast pricing. Sproule estimates that, as of December 31, 2016, the Chip Lake property contained remaining proved plus probable reserves of 3.3 Bcf of natural gas and 196,000 barrels of oil and natural gas liquids (748,000 boe), with an estimated net present value of $5.9 million using forecast pricing at a 10% discount.
The balance of the Properties were evaluated by InSite Petroleum Consultants Ltd. (“InSite”) as part of InSite’s reserves evaluation of RMP’s properties as part of RMP’s year-end reporting (the “InSite Report”). The InSite Report is effective December 31, 2016 using InSite’s December 31, 2016 forecast pricing. InSite estimates that, as of December 31, 2016, the McLeod, Pine Creek and Sinclair properties contained remaining proved plus probable reserves of 7.5 MMcf of natural gas and 84,000 barrels of natural gas liquids (1.33 million boe), with an estimated net present value of $7.5 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 to acquire the Property will be accepted until 12:00 pm on Thursday, December 14, 2017.
For further information please feel free to contact Ben Rye, Tom Pavic, Grazina Palmer, 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