Sayer Energy Advisors has been engaged to assist AlphaBow Energy Ltd. (“AlphaBow” or the “Company”) with the sale of its non-core oil and natural gas properties located in the Aerial, Michichi and Greater Michichi areas of Alberta (the “Properties”).
Recent total oil and natural gas sales net to AlphaBow from the Properties has averaged approximately 653 boe/d (260 barrels of oil and natural gas liquids per day and 2.4 MMcf/d of natural gas).
The majority of the production is from the Banff Formation, with minor natural gas production from the Mannville Group and Horseshoe Canyon Formation.
Total net operating income from the Properties has recently averaged approximately $235,000 per month or $2.8 million annualized.
A total of 49 horizontal wells targeting the Banff Formation have been identified on AlphaBow’s land in the Michichi and Greater Michichi areas. In addition to the horizontal drilling potential, the Company has identified 17 gross (15.6 net) re-completion and optimization opportunities. The re-completion and optimization opportunities are expected to yield additional production of approximately 528 boe/d.
The LLR from the Properties as of July 7, 2018 is 3.33, with a net deemed asset value of $23.8 million (net deemed assets of $34.0 million and net deemed liabilities of $10.2 million).
McDaniel & Associates Consultants Ltd. (“McDaniel”) has prepared an independent reserves evaluation of AlphaBow’s Michichi property as of December 31, 2017. McDaniel estimates that the Michichi property contained remaining proved plus probable reserves of 4.3 million barrels of oil and natural gas liquids and 20.4 Bcf of natural gas (7.7 million boe), with an estimated net present value of $75.5 million using McDaniel’s January 1, 2018 forecast pricing at a 10% discount.
AlphaBow, formerly Sequoia Operating Corp., prepared an internal reserves evaluation of its Aerial and Greater Michichi properties. AlphaBow estimates that, as of January 1, 2018, the Aerial and Greater Michichi properties contained remaining proved developed producing reserves of 104,000 barrels of oil and natural gas liquids and 3.0 Bcf of natural gas (598,000 boe), with an estimated net present value of $2.9 million using Sproule’s May 31, 2018 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, September 20, 2018.
For further information please feel free to contact Ryan Ferguson Young, Ben Rye, Tom Pavic, Mark Zalucky, Grazina Palmer or myself at 403.266.6133.
Ryan Ferguson Young, B.Comm.
SAYER ENERGY ADVISORS
1620, 540 – 5th Avenue SW
Calgary, Alberta T2P 0M2
P: 403.266.6133 F: 403.266.4467