Avalon Energy Ltd (“Avalon” or the “Company”) has engaged Sayer Energy Advisors (“Sayer”) to assist it with the sale of the Company’s Alberta oil and natural gas assets (the “Properties”). Avalon is a private company with a 28 year history of operating oil and natural gas properties in western Canada. The Company has recently decided to focus its activities in Saskatchewan, and as a result, its Alberta properties are being sold at this time.
The Properties, which are all Avalon-operated oil properties, are located in the Murray Lake, Knappen, Long Coulee, Pageant and Majorvilleareas of southern Alberta.
Avalon has a 100% working interest in a Lower Mannville (Sunburst) oil pool in the Murray Lake area of southern Alberta. Avalon’s recent production from the property has averaged approximately 75 barrels of 20o API oil per day. Avalon’s net operating income from Murray Lake for the first six months of 2017 was $425,000.
The Company’s minor properties at Knappen, Long Coulee, Pageant and Majorville are currently producing a total of approximately eight barrels of oil per day and 55 Mcf/d of natural gas.
McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared an independent reserves evaluation of Avalon’s Murray Lake property specifically for this divestiture (the “McDaniel Report”). The McDaniel Report is effective July 1, 2017, using McDaniel’s July 1, 2017 forecast pricing.
McDaniel estimates that as of July 1, 2017 the Murray Lake property contained remaining proved plus probable reserves of 219,200 barrels of oil, with an estimated net present value of approximately $4.0 million using forecast pricing at a 10% discount. The rest of the Properties were not evaluated by McDaniel.
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 property divestiture will be accepted until 12:00 pm on Thursday, October 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