Sayer Energy Advisors has been engaged to assist C Group Energy Inc. (“C Group” or the “Company”) with the divestiture of its oil and natural gas property located in the Niton/McLeod area of Alberta (the “Property”).
Recent production (three months ended October 31, 2016) net to C Group from the Property has averaged 195 boe/d, consisting of 88 barrels of oil and natural gas liquids per day and 645 Mcf/d of natural gas sales.
C Group holds working interests ranging from 45-100%, mainly 100%, in 47.25 sections of land at Niton/McLeod. The land is productive for oil and natural gas from the Cardium, Wilrich and Lower Mannville formations.
Based on extensive core data, petrographic analysis and geological mapping, the Company has identified 11 horizontal Cardium locations at McLeod. These locations have been assigned undeveloped reserves, and include seven proven undeveloped and four probable locations.
At Niton, the Company has identified two horizontal Cardium drilling locations which have been assigned undeveloped reserves and which are each estimated to cost less than $2.2 million to drill, complete and equip.
Liquids-rich natural gas bearing shoreface sands and cross-cutting channels of the Wilrich Formation have recently been exploited by numerous operators with horizontal wells in the Niton/McLeod area.
Ten Wilrich locations have been identified by C Group, none of which have been booked in the reserve report.
As of November 5, 2016, C Group’s Niton/McLeod property has a positive deemed net asset value of $3.5 million, with an LMR ratio of 3.53.
Recent monthly net operating income from the Property has averaged approximately $90,000.
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 Niton/McLeod property contained remaining proved plus probable reserves of 2.0 million barrels of oil and natural gas liquids and 19.4 Bcf of natural gas (5.2 million boe), with an estimated net present value of $26.2 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, January 12, 2017.
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