Sayer Energy Advisors has been engaged to assist Canstone Energy Ltd. (“Canstone” or the “Company”) with the sale of all of its oil and natural gas properties, which are generally located in the greater Twining area, including the Equity, Ghost Pine, Huxley, Keivers Lake, Lone Pine, North Twining, Stewart Lake, Swalwell, Trochuand Twining areas of Alberta (the “Properties”).
The long-life, shallow natural gas production from the Properties in the greater Twining area is mostly non-operated.
Production from the Properties net to Canstone for the first five months of 2018 averaged approximately 10.7 MMcf/d of natural gas and 44 barrels of oil and natural gas liquid per day (1,836 boe/d). This includes 142 Mcf/d of natural gas royalty production.
The LLR from the Properties as of August 4, 2018 is 2.14, with a net deemed asset value of $11.0 million (net deemed assets of $20.6 million and net deemed liabilities of $9.6 million).
Ryder Scott Company Petroleum Consultants (“Ryder Scott”) prepared an independent reserves evaluation of Canstone’s properties as part of the Company’s year-end reporting (the “Ryder Scott Report”). The Ryder Scott Report is effective December 31, 2017 using Ryder Scott’s December 31, 2017 forecast pricing.
Ryder Scott estimates that, as of December 31, 2017, Canstone’s Properties contained remaining proved plus probable reserves of 60.6 Bcf of natural gas and 325,000 barrels of oil and natural gas liquids (10.4 million boe), with an estimated net present value of $41.1 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, October 4, 2018. Canstone will entertain offers for the individual Properties.
For further information please feel free to contact Ben Rye, Ryan Ferguson Young, 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