Calgary-based junior producer New Star Energy has announced through Macquarie Tristone that it has entered strategic alternatives.
The company, producing between 4,000 – 5,000 boe/d, holds nearly 80,000 acres of land west of Edmonton. The company reports 2p reserves of approximately 20 MMboe (60% liquids).
Read the full release below from Macquarie Tristone’s website:
New Star Energy Ltd. (“New Star”) has undertaken a process to identify strategic alternatives and has retained Macquarie Tristone as its exclusive financial advisor. New Star is a private, Calgary based oil and gas producer with assets concentrated in the Highvale area of Central Alberta. Highlights of New Star are:
Expansive Oil Resource
- Large OOIP in excess of 350 MMbbl with less than 3% recovered to date
- Improvement in completion technology continues to deliver higher production and reserves per well resulting in higher capital efficiencies
- 2P reserves of approximately 20 MMboe (60% oil and NGLs)
- H1/2014 production of 4,200 boe/d (43% oil and NGLs) and forecasted H2/2014 production of 4,500 to 5,000 boe/d (45% oil and NGLs)
- Large inventory of primary drilling locations and extensive waterflood projects provide unique and compelling flexibility with respect to go-forward development (High Growth or Free Cashflow model)
Concentrated, High Working Interest, Operated Asset Base
- Majority of production and reserves are associated with the Banff/Nordegg reservoir with additional volumes from the Ostracod Formation
- Production at Highvale is 100% New Star operated
- 79,309 net acres of land with a 94% working interest in the Banff. Similar interests in the Cardium, Ostracod and Duvernay plays
Significant Development Drilling & Waterflood Upside
- Expansive, scalable inventory of highly economic and repeatable development drilling locations supported by extensive 3-D seismic coverage
- First year average production of 150 boe/d generating a quick payout period of less than 15 months and recycle ratio of greater than 2X based on a total capital cost of $2.2 million
- Significant waterflood upside as demonstrated by the strong performance of existing floods
Control of Major Facilities
- Owned and operated facilities and infrastructure allow full control of future development and maintain a low operating cost of $12/boe
Clean Balance Sheet
- New Star has actively maintained a conservative capital structure with net debt to annualized operating cash flow of less than 1X at the end of Q2
Corporate Structure
- New Star is a tightly held private company; management, directors, and major shareholders own or control greater than 60% of the outstanding common shares
Click here to see the full information package on Macquarie Tristone’s website