Sayer Energy Advisors has been engaged to assist Grant Thornton Limited, in its capacity as court-appointed receiver (the “Receiver”) of Lexin Resources Ltd., 0989 Resource Partnership, 1051393 BC Ltd., LR Processing Ltd. and the LR Processing Partnership (collectively the “Lexin Group” or “Lexin”) with the sale of the oil and natural gas properties held by the Lexin Group (the “Properties”).
The Properties include approximately 1,380 Lexin-licensed wells, 81 Lexin-licensed facilities, 236 Lexin-licensed pipelines and 260 non-operated wells operated by approximately 50 partners. In certain cases, Lexin-licensed wells are being operated by other parties on a contractual basis.
Lexin’s major operated properties are mainly concentrated in an area south and east of Calgary, ranging south from the southern limits of the City of Calgary to Claresholm, and bounded to the east by Bow Island and to the west by High River.
Considering that most of Lexin’s operated wells have been shut-in for some time, recent and reliable production figures are not available. It is estimated that Lexin’s net raw production capability from its operated and non-operated wells totals approximately 7,272 boe/d (39.2 MMcf/d of natural gas, 521 barrels of natural gas liquids per day and 215 barrels of oil per day).
All of Lexin’s licensed wells, facilities and pipelines are currently in the care and custody of the Orphan Well Association or Lexin’s working interest partners.
GLJ Petroleum Consultants Ltd. (“GLJ”) prepared an independent reserves evaluation of Lexin’s properties specifically for this divestiture (the “GLJ Report”). The GLJ Report, which is a mechanical update of Lexin’s December 31, 2014 year-end report, is effective March 31, 2017 using GLJ’s April 2017 forecast pricing.
GLJ estimates that, as of March 31, 2017, the Properties contained remaining proved plus probable reserves of 323,000 barrels of oil, 100 Bcf of natural gas and 1.7 million barrels of natural gas liquids (18.7 million barrels of oil equivalent), with an estimated net present value of $66.8 million using forecast pricing at a 10% discount.
Summary information relating to this divestiture is attached to this correspondence. More specific information, including the Alberta Energy Regulator’s detailed set of criteria for purchasers which are attempting to acquire Lexin assets from the Receiver, is available atwww.sayeradvisors.com. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement (copy attached).
Cash offers to acquire the Properties will be accepted until 12:00 pm on Thursday, October 5, 2017.
For further information please feel free to contact Tom Pavic, Ben Rye, Jill Switzer 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