Sayer Energy Advisors has been engaged to assist Ernst & Young Inc., in its capacity as receiver (the “Receiver”) of Northpoint Resources Ltd. (“Northpoint” or the “Company”) in divesting the oil and natural gas properties held by Northpoint.
The Receiver is offering for sale Northpoint’s working interests in its shut-in natural gas property in the Altares area of British Columbia and a non-producing property in the Strachan area of Alberta. The Company operates both of the properties, holding a high working interest in each.
The Altares property provides roughly 98% of the Company’s production capability, reserves and value. Prior to being shut-in at the end of May 2016, production net to Northpoint from Altares averaged 1,075 boe/d, consisting of 6.3 MMcf/d of natural gas sales and 25 barrels of natural gas liquids per day.
The majority of the Company’s recent production capability at Altares comes from the middle Gething Formation. Additional natural gas producing reservoirs are found in the Upper and Lower Altares Dolomite members of the Halfway Formation, the Coplin Member of the Charlie Lake Formation and from the Bluesky Formation.
The Company has identified a number of upside opportunities at Altares, which it estimates could add a total of 18.5 Bcf of natural gas and over 12 MMcf/d of production capability for a total capital expenditure of less than $6 million.
There is potential to utilize the middle Gething reservoir at Altares as a significant natural gas storage project.
As of April 29, 2016, Northpoint’s Altares, B.C. property had a positive deemed net asset value of $11.89 million (assets of $16.33 million less liabilities of $4.44 million), with an LMR ratio of 3.68.
The Company estimated that, as of April 1, 2016, the Altares property contained remaining proved plus probable reserves of 50 Bcf of natural gas and 217,000 barrels of natural gas liquids (8.6 million boe), with an estimated net present value of $39.9 million using May 6, 2016 strip 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, July 28, 2016.
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