Gear Energy Ltd. has retained CB Securities Inc. as its exclusive advisor for this sale.
Vermilion Property
- Current production is 127 Bbls/day, of which 87% is from five (5) 100% working interest wells
- Operating Results for 7 months in 2017
- $44.25/Bbl average price received ($4.80 less than WCS average)
- 144 Bbls/day average oil rate
- 4.8% royalties
- $29.50/Bbl operating costs
- Wet spring resulted in higher May/June 2017 costs
- $23.45/Bbl is expected going forward
- Includes costs for all the non-producing wells
- $12.65/Bbl netback (would have been $18.70/Bbl with go-forward operating costs)
- $664 thousand of annualized net operating income
- Only $3.15/Bbl of capital expenditures over past 3 years
- Mostly 100% working interests in 4,120 acres of land
- Upside includes:
- 10 identified recompletions in the Sparky, Dina, and General Petroleums ($28 thousand of capital each)
- 4 identified Sparky drilling locations ($440 thousand of capital each)
- Waterflood implementation in west side of Sparky pool (57 MMBbls of OOIP)
- Horizontal development of the Dina pool in Section 18-50-05 W4M (26 MMBbls of OOIP)
- Initial well rates of 100 Bbls/day are typical using current technology
Islay Property
- Current production is 69 Bbls/day from three (3) 100% working interest wells
- Operating Results for 7 months in 2017
- $44.25/Bbl average price received ($4.80 less than WCS average)
- 64 Bbls/day average oil rate
- 7.8% royalties
- $14.35/Bbl operating costs
- Includes costs for all the non-producing wells
- Costs are in $11 to $12/Bbl range for the producing wells
- $26.45/Bbl netback
- No capital required to date in 2017
- $622 thousand of annualized net operating income
- Shallow ~8% declining production
- Mostly 100% working interests in 3,040 acres of land
- Upside includes:
- Identified Sparky drilling location ($440 thousand of capital)
- Waterflood implementation in the Sparky pool (13.6 MMBbls of OOIP)
- Clean out of 1 identified interest well to resume Sparky production
- Horizontal development of the Lloydminster pool (30 MMBbls of OOIP)
- Initial well rates of 100 Bbls/day are typical using current technology
Lloydminster Property
- Current production is 26 Bbls/day from four (4) 100% working interest wells
- Operating Results for 7 months in 2017
- $43.20/Bbl average price received ($5.85 less than WCS average)
- 30 Bbls/day average oil rate
- 0.5% royalties
- $44.90/Bbl operating costs (includes significant fixed operating costs for all the non-producing wells)
- Operating costs are in the $20 to $22/Bbl range for the producing wells
- $-1.95/Bbl netback (producing wells ARE economic)
- Only $3 thousand of capital required to date in 2017
- Shallow ~8% declining production
- Gear is willing to entertain small or large offers on assets in this property that has a scattered land and well base
- Mostly scattered 100% working interests in 1,720 acres of land
- Upside includes:
- Six (6) identified vertical Sparky drilling locations ($300 thousand of capital each)
- Two (2) identified horizontal Sparky drilling locations
- Four (4) identified vertical General Petroleums drilling locations
- Five (5) identified Sparky recompletions (and likely more)
- One (1) identified Colony recompletion
- One (1) Cummings recompletion
BC Minors Property
The British Columbia Minors is comprised of land in 2 areas, specifically Cache and Ekwan, offered as single package. The Cache area is developed with a single long producing life well producing ~300 Mcf/day of net sales gas at a 65% working interest, and 100% working interests in the Ekwan exploration area.
Gear land holdings include 65% to 100% working interests in 5 sections within Cache, 100% working interests in 2 sections within Buick, 50% working interests in 2 sections within Bubbles, 100% working interests in 1 section within Medana, and 100% working interests in 8 exploratory sections of land centered on B/94-I-15 with 5 wellbores that are prospective for Jean Marie gas production.
Additional non-confidential information on the Properties is provided in the Offering Circular that is available for viewing on CB Securities website at or by emailing CB Securities at info@cbsecurities.com.
Interested parties are asked to submit a Non-Binding Bid by noon on Thursday, November 16, 2017.