Sayer Energy Advisors has been engaged to assist Wolf Coulee Resources Inc. (“Wolf Coulee” or the “Company”) with the sale of the shares of the Company. The Company has long life reserves, less than 50 shareholders and no bank debt.
The offering presents an opportunity to acquire a focused company with operated, high working interest, concentrated assets located in a focused area which is comprised of Retlaw, Badger, Hector and Little Bow (the “Retlaw Focus Area”).
Total production at the end of November exceeded 1,000 boe/d (5.2 MMcf/d, 110 barrels of oil per day and 45 barrels of natural gas liquids per day). As natural gas prices became unstable last summer, the Company shut-in up to 80% of its natural gas production in September through to early November. With stronger prices into November, production was brought back on-stream and during the third week of November a new well was also added. Re-instated shut-ins and strong flush production from the new well increased the Company’s production in November from 375 boe/d at the start to over 1,000 boe/d at the end, providing an average of 672 boe/d.
Field receipts in December were hampered by freeze offs due to extreme cold late in the month resulting in an average reported field level production rate of 835 boe/d. January production is averaging 800 boe/d in spite of freeze offs early in the month.
Wolf Coulee has mapped, partially developed and produces oil, natural gas and natural gas liquids from a series of lithic channels in the Upper Mannville throughout the Retlaw/Badger/Hector areas. These channels contain very large hydrocarbons ‘in-place’ and provide a significant number of proven low-risk development drilling locations. Most of these are horizontal development locations de-risked by offset production and seismic. These PUD locations will significantly increase current low recovery factors as well as the Company’s oil and natural gas production. Initial development utilized vertical wells followed by several horizontal multi-stage frac’d development wells.
InSite Petroleum Consultants Ltd prepared an independent reserves evaluation of Wolf Coulee’s properties (the “InSite Report”). The InSite Report is effective July 1, 2017 using InSite’s June 30, 2017 forecast pricing.
InSite estimates that, as of July 1, 2017, Wolf Coulee’s properties contained remaining proved plus probable reserves of 1.7 million barrels of oil and natural gas liquids and 43.2 Bcf of natural gas (8.9 million boe), with an estimated net present value of $40.6 million using forecast pricing at a 10% discount.
The Company’s net operating income for November 2017 is estimated to be approximately $145,000, with December’s net operating income estimated to be approximately $190,000.
As of January 6, 2018, Wolf Coulee had a positive deemed net asset value of $3.7 million (deemed assets of $22.0 million less liabilities of $18.3 million), with an LMR ratio of 1.20. The twelve month average corporate LMR prior to shut-ins was 1.34. The Company expects the LMR ratio to increase as production which was shut-in has recently been reactivated.
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).
Offers relating to this divestiture will be accepted until 12:00 pm on Thursday, February 22, 2018.
For further information please feel free to contact: Tom Pavic, Ben Rye, Mark Zalucky, Grazina Palmer, 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