Sayer Energy Advisors has been engaged to assist Sojourn Energy Inc. (“Sojourn” or the “Company”) with the sale of two of its non-core heavy oil properties, which are located in the Lloydminster area of Alberta and the Silverdale area of Saskatchewan (the “Properties”). Recent production net to Sojourn from the Properties has averaged 210 barrels of heavy oil per day. The Company is selling the Properties in order to direct capital to its other core properties.
In the fourth quarter of 2015, net production from the Company’s 100% working interest Lloydminster property averaged approximately 134 barrels of oil per day. Production was 141 barrels of oil per day in January 2016. Operating cash flow for the Lloydminster property during the fourth quarter of 2015 averaged approximately $63,000 per month. As of February 6, 2016, the Lloydminster property has a positive deemed net asset value of $5.8 million, with an LLR ratio of 5.67.
At Silverdale, Sojourn holds non-operated working interests from 13.8%-30% in approximately two sections of land. The Silverdale property contains three distinct Sparky oil pools (30% WI) and a GP channel oil pool (13.8% WI). In the fourth quarter of 2015, net production from the Silverdale property averaged approximately 76 barrels of oil per day. Production was 69 barrels of oil per day in January 2016. Operating cash flow for the Silverdale property during the fourth quarter of 2015 averaged approximately $31,000 per month.
Trimble Engineering Associates Ltd. estimates that the Properties contained remaining proved plus probable reserves of approximately 982,000 barrels of oil as of August 31, 2015, with an estimated net present value of $21.8 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, April 7, 2016.
For further information please feel free to contact: Ben Rye, Ryan Ferguson Young, Jill Switzer, Tom Pavic or myself at 403.266.6133.
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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