Gain Energy Ltd. (“Gain” or the “Company”) has engaged Sayer Energy Advisors to assist with the sale of its non-core properties in central Alberta, northern Alberta and northeastern British Columbia (the “Properties”).
Gain’s estimated recent oil and natural gas sales from the Properties have averaged approximately 2,515 barrels of oil equivalent per day, consisting of approximately 10.7 MMcf/d of natural gas, 376 barrels of oil per day and 358 barrels of natural gas liquids per day.
Gain has varying working interests in a large acreage position in the Edson area. Along with a long-life, low decline production base from which Gain’s recent sales have averaged approximately 1,400 barrels of oil equivalent per day (7.5 MMcf/d of natural gas and 155 barrels of oil and natural gas liquids per day), this land has significant potential to further increase production by developing liquids-rich natural gas reserves from multiple formations, including the Bluesky, Upper Notikewin, Lower Notikewin and the Wilrich formations.
There is potential to increase production from Gain’s various working interests in the Gilby/Medicine River/Sylvan Lake areas by further developing the Cardium, Viking, Glauconitic, Ostracod/Ellerslie/Basal Quartz and Nordegg formations with horizontal wells. Charlie Lake upside has been identified at Worsley, and there is Montney drilling potential on Gain’s land at Berland River. At Muskrat, B.C., there is Dunlevy (Gething) and Boundary Lake oil and natural gas potential.
The Properties also include various operated and non-operated working interests in 16 units in the Gilby/Medicine River/Sylvan Lake area, as well as the Cynthia East Unit, the Edson Gas Unit No. 1, the Nipisi Gilwood Unit No.1 and the Zama Keg River “H” Pool Unit No. 1.
GLJ Petroleum Consultants Ltd. (“GLJ”) prepared an independent reserves evaluation of Gain’s properties in aggregate (the “GLJ Report”). The GLJ Report is effective December 31, 2017 using GLJ’s 2018-01 forecast pricing.
GLJ estimates that as of December 31, 2017, the Properties contained remaining proved plus probable reserves of 2.9 million barrels of oil and natural gas liquids and 38.4 Bcf of natural gas (9.3 million boe), with an estimated net present value of $53.3 million using forecast pricing at a 10% discount.
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).
Cash offers to acquire the Properties will be accepted until 12:00 pm on Thursday, May 31, 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