Sayer Energy Advisors has been engaged to assist 1280417 Alberta Ltd. (“1280417”) with a corporate sales process. 1280417 is the sole shareholder of Primrose Drilling Ventures Ltd. (“Primrose” or the “Company”), which is a private oil and natural gas company. 1280417’s sole asset is its ownership of Primrose. Primrose has income tax pools totaling approximately $5.8 million; it will have no working capital deficiency or surplus at closing.
Primrose currently produces approximately 354 boe/d (301 barrels of oil and natural gas liquids per day and 315 Mcf/d of natural gas) from its operated and non-operated working interests (315 boe/d) and royalty interests (39 boe/d) in Saskatchewan and Alberta.
The Company’s net operating income has recently averaged approximately $330,000 per month ($270,000 from working interests, $60,000 per month from royalty interests).
The majority of the Company’s production, upside and value is in the Workman area of southeastern Saskatchewan, where it holds various working interests and royalty interests in a number of producing wells and drilling prospects. Recent production net to Primrose from its working interest wells at Workman has averaged approximately 239 barrels of oil equivalent per day (235 barrels of oil per day, 21 Mcf/d of natural gas) with these interests generating approximately $270,000 of net operating income per month. The Company’s recent revenue from 17 barrels of oil equivalent per day of royalty production in the Workman area has averaged approximately $31,000 per month.
Primrose has additional working interest and royalty interest properties located in southeastern Saskatchewan and in Alberta.
As of May 2018, the operated properties of Primrose had a net deemed liability of $201,939 but had an aggregate of $202,733 on deposit resulting in an LLR of 1.00.
Trimble Engineering Associates Ltd. (“Trimble”) prepared an independent reserves evaluation of Primrose’s properties as part of the Company’s year-end reporting (the “Trimble Report”). The Trimble Report is effective December 31, 2017 using Trimble’s January 1, 2018 forecast pricing.
Trimble estimates that as of December 31, 2017, Primrose’s properties contained remaining proved plus probable reserves of 839,000 barrels of oil and natural gas liquids and 1.4 Bcf of natural gas (1.1 million boe), with an estimated net present value of $18.8 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).
Proposals relating to this divestiture will be accepted until 12:00 pm on Thursday, June 28, 2018.
For further information please feel free to contact: Ryan Ferguson Young, Ben Rye, Mark Zalucky, Tom Pavic, Grazina Palmer 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