Birchcliff Energy Ltd. (“Birchcliff” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its working interest oil and natural gas properties in the Valhalla and Progress areas of Alberta (the “Properties”).
Birchcliff has a significant acreage position in each area that is highly prospective for horizontal unconventional oil and liquids-rich natural gas production from the Montney/Doig resource play. The Company holds a 100% working interest in 20.75 contiguous sections of land at Valhalla, and it holds a high working interest in a significant land position at Progress, including 23.1 net sections of land where it holds the rights to the Montney Formation.
Completed and/or producing wells offsetting the company’s land in the Progress and Valhalla areas show significant unconventional horizontal hydrocarbon production potential, with significant liquids production (40-50O API oil and condensate) as shown by offset producing wells.
There is significant natural gas production from the Middle and Upper Montney formations surrounding the Company’s land atValhalla, where the Company has drilled one vertical exploration well which encountered multiple natural gas shows in the Montney, Basal Doig and Upper Charlie Lake formations. Birchcliff has identified the potential to drill over 40 horizontal Montney wells and over 20 horizontal Basal Doig wells on its land to develop the Montney/Doig resource, which it estimates to be approximately 2.4 Tcf of OGIP.
At Progress, Birchcliff has drilled two horizontal exploration natural gas wells on its lands, evaluating the Montney/Doig resource play. The Company has identified the potential to drill over 30 horizontal Montney wells and over 50 horizontal Basal Doig wells on its land to develop the Montney/Doig resource, which it estimates to be approximately 82 million barrels of OOIP and 3.3 Tcf of OGIP.
The Company currently produces approximately 265 boe/d from its 33.6 net working interest wells at Progress (1.14 MMcf/d of natural gas sales, 59 barrels of oil per day and 16 barrels of natural gas liquids per day).
McDaniel & Associates Consultants Ltd. estimates that, as of December 31, 2016, the Progress property contained remaining proved plus probable reserves of 715,000 barrels of oil and natural gas liquids and 17.7 Bcf of natural gas (3.7 million boe), with an estimated net present value of $13.2 million using Deloitte LLP’s January 1, 2017 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 6, 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