Sayer Energy Advisors has been engaged to assist Jayhawk Resources Ltd. (“Jayhawk” or the “Company”) with a corporate sales process. The Company provides an attractive acquisition opportunity with existing low-decline, shallow natural gas production. Jayhawk currently has a high LLR rating, no debt, positive working capital and no severance obligations.
Operated production from its main property in the Minnehik area of Alberta includes ownership in all associated facilities, which provides the company with low operating costs and third party processing income. Minnehik accounts for over 80% of Jayhawk’s production, operating income and reserve value.
The Company also has minor producing properties located in the Provost, Craigmyle, Penhold, Sylvan Lake, Joffre, Homeglen-Rimbey, Carrot Creek, Bellis, Tony Creek, Mitsue, Nipisi and Clear River areas of Alberta.
Total production net to the Company from its properties has recently averaged approximately 330 boe/d (1.6 MMcf/d of natural gas and 56 barrels per day of oil and natural gas liquids).
As of August 5, 2017, Jayhawk’s properties had a positive deemed net asset value of $8.13 million (deemed assets of $11.65 million less liabilities of $3.52 million), with an LMR ratio of 3.31.
Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of Jayhawk’s properties as part of the Company’s year-end reporting (the “Sproule Report”). The Sproule Report is effective July 31, 2017 using Sproule’s May 31, 2017 forecast pricing.
Sproule estimates that, as of July 31, 2017, Jayhawk’s properties contained remaining proved plus probable reserves of 189,000 barrels of oil and natural gas liquids and 10.4 Bcf of natural gas (1.9 million boe), with an estimated net present value of $10.1 million using forecast pricing at a 10% discount.
In addition to its producing properties, Jayhawk also holds various interests in several minor non-producing properties located in the Carsland, Beauvallon, Duvernay, Leduc, Ferrier, Cynthia, Cherhill, Carnwood, Chisholm and Progress areas of Alberta.
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).
Proposals relating to this process 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, 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