Sayer Energy Advisors has been engaged to assist Hanna Oil & Gas Company – Canada ULC (“Hanna” or the “Company”) in divesting all of its working interest properties and royalty interest holdings, which are located in various areas throughout Alberta and northeastern British Columbia (the “Properties”).
The Properties have been grouped into nine packages for marketing purposes: Duvernay Royalty, Sunset Prairie Royalty, Glacier Royalty, Miscellaneous Royalties, Birch Hills East, Birch Hills West, Miscellaneous Operated Properties, Miscellaneous Non-Operated Properties and Undeveloped Land.
Hanna has a large portfolio of gross overriding royalty interests which are located throughout Alberta and northeastern British Columbia. Hanna’s royalty interests have been separated into four packages: Duvernay Royalty, Sunset Prairie Royalty, Glacier Royalty and Miscellaneous Royalties.
The Company has operated, non-operated working interests and minor royalty interests in the Birch Hills area, which have been divided into two packages; Birch Hills East and Birch Hills West.
Hanna has miscellaneous operated properties located in the Dawson and Progress areas of Alberta. The Company also has non-operated working interests in properties located in the Bow Island, Little Bow, Coyote/Watts, Carbon, Trochu, Fenn West/ Ewing Lake/Mikwan, Evi, Pouce Coupe, Gordondale and Fourth areas of Alberta.
Recent sales net to Hanna from the Properties have averaged approximately 1.96 MMcf/d of natural gas and 48 bbl/d of oil and natural gas liquids, or 375 boe/d. The royalty interest production consists of approximately 454 Mcf/d of natural gas and 23 barrels of oil and natural gas liquids or 98 boe/d. There is significant upside potential relating to the Duvernay Royalty, Sunset Prairie Royalty and Glacier Royaltypackages.
In addition to the producing properties, Hanna has operated and non-operated interests in a large base of undeveloped land in Alberta, totaling 46,492 gross (26,140 net) hectares.
Deloitte LLP (“Deloitte”) prepared an independent reserves evaluation of Hanna’s major working interest properties (the “Deloitte Report”). The Deloitte Report is effective December 31, 2014 using Deloitte’s December 31, 2014 forecast pricing. After taking into account subsequent material events as estimated by the Company), the adjusted Deloitte Report shows that the Company’s working interest properties contained remaining proved plus probable reserves of 249,000 barrels of oil and natural gas liquids and 8.5 Bcf of natural gas (1.7 million boe), with an estimated net present value of $13.5 million using forecast pricing at a 10% discount. An independent reserves evaluation has not been completed on Hanna’s royalty packages.
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).
The Company will consider offers for each of the royalty packages and for each of the individual operated and non-operated properties. Offers will also be considered to acquire all of the assets of the Company or to acquire the whole corporation; further corporate information can be made available to interested parties.
Cash offers relating to this divestiture will be accepted until 12:00 pm on Thursday, July 7, 2016.
For further information please feel free to contact: Ryan Ferguson Young, Tom Pavic, Ben Rye, 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 F: 403.266.4467