Sayer Energy Advisors has been engaged to assist C Group Energy Inc. (“C Group” or the “Company”) with the divestiture of several oil and natural gas properties which are located in various areas of Alberta.
C Group is offering for sale its working interests in producing oil and natural gas properties in the Garrington, Viking, Buck Lake, Pembina, Skaro and Meyer Lake areas of Alberta (the “Properties”). The Company operates the majority of the Properties, generally holding a high working interest.
Recent production (three months ended October 31, 2016) net to C Group from the Properties has averaged 440 boe/d, consisting of 278 barrels of oil and natural gas liquids per day and 970 Mcf/d of natural gas sales.
As of November 5, 2016, C Group’s Properties collectively have a positive deemed net asset value of $5.6 million, with an LMR ratio of 2.15.
Recent monthly net operating income from the Properties has averaged approximately $250,000.
At Garrington, C Group’s recent net sales production has averaged approximately 268 boe/d (64 barrels of oil per day, 78 barrels of natural gas liquids per day and 759 Mcf/d of natural gas).
The Company’s wells at Garrington produce from the Cardium, Glauconitic, Ellerslie and Elkton formations. There is potential to increase this production significantly by drilling up to seven horizontal wells, either as new wells or as re-entries of existing wells. Three of the upside locations which have been identified are targeting the Cardium Formation, with two additional locations identified in each of the Glauconitic and Elkton formations.
At Skaro, located northeast of Edmonton, C Group owns 100% of a Cooking Lake oil pool which was discovered in 1951. Eight oil wells produce 38o API, high-netback oil at a combined rate of approximately 103 bbl/d. Production from this long-life oil property is very predictable and stable.
There is potential for further development at Skaro through well optimization as well as through drilling several infill and step out locations. The Company’s Cooking Lake oil wells atSkaro generally produce with high but steady water cuts. C Group believes that as many as three infill wells could be drilled.
McDaniel & Associates Consultants Ltd. prepared an independent reserves evaluation of C Group’s properties as part of the Company’s year-end reporting. The McDaniel Report is effective June 30, 2016 using McDaniel’s July 1, 2016 forecast pricing.
McDaniel estimates that, as of June 30, 2016, the Properties contained remaining proved plus probable reserves of 2.2 million barrels of oil and natural gas liquids and 10.7 Bcf of natural gas (4.0 million boe), with an estimated net present value of $33.2 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, December 22, 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