Sayer Energy Advisors has been engaged to assist Grant Thornton Limited, in its capacity as court-appointed receiver of WellStar Energy Corp. (“WellStar”) and its wholly-owned subsidiary, Nexxtep Resources Ltd. (“Nexxtep”) (collectively the “Companies”) with the sale of the oil and natural gas properties held by the Companies (the “Properties”) or a restructuring of the Companies.
The Properties are located in the McTaggart and Barthel areas of Saskatchewan and the Leduc North and Rosevear areas of Alberta.
At McTaggart, Nexxtep has working interests of 83.5%-87.9% in four quarter sections of land, and a 25% working interest in three offsetting quarter sections. Production capability from three oil wells on the property is approximately 40 barrels of oil per day net to Nexxtep from the Red River and Winnipeg formations. As of April 30, 2017, Nexxtep’s McTaggart property had a deemed net asset value of $968,443.85 (deemed assets of $1,254,147.50 and deemed liabilities of $285,703.65) with an LLR of 4.39.
Nexxtep has a 100% working interest in PNG rights to base Mannville on one section of land on which there is one well in the Barthel area of Saskatchewan. There is no production currently associated with the property.
At Leduc North, Nexxtep has a 3.9% non-convertible overriding royalty payable on 100% of production on one section of land on which there is one suspended oil well operated by Owl River Resources Ltd.
Nexxtep holds a 50% working interest in in three quarter sections of land at Rosevear, on which there are three non-operated wells. The Companies’ net production from this property has averaged approximately four barrels of oil per day.
WellStar also holds interests in undeveloped land acreage in the United States, specifically in the states of Montana and North Dakota.
Trimble Engineering Associates Ltd. (“Trimble”) prepared an independent reserves evaluation of Nexxtep’s properties specifically for this divestiture, effective January 31, 2017 using ATB Corporate Finance Services’ January 1, 2017 forecast pricing. Trimble estimates that the Properties contains remaining proved plus probable reserves of 230,000 barrels of oil and natural gas liquids and 170 MMcf of natural gas, with an estimated net present value of $2.8 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, July 6, 2017.
For further information please feel free to contact Ben Rye, Jill Switzer, Tom Pavic, 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