On March 23, 2018, pursuant to the Bankruptcy and Insolvency Act (“BIA”), Sequoia Resources Corporation (“Sequoia” or the “Company”), filed an assignment in Bankruptcy and PricewaterhouseCoopers Inc. LIT (“PwC”) was appointed as Licensed Insolvency Trustee (the “Trustee”).
Sayer Energy Advisors has been engaged to assist the Trustee with the sales process of certain of Sequoia’s oil and natural gas properties. At this time, we are marketing the Company’s Cabin Creek natural gas property (the “Property”). The Company operates the Property, holding working interests of 25%-55% in 14 sections of land.
Sequoia holds an average 45% working interest in and operates five natural gas wells which are capable of producing high rates of natural gas with minor volumes of natural gas liquids (5-6 barrels per MMcf of natural gas sales). The Property generated over $500,000 in operating income net to Sequoia in 2017.
As per an order from the Alberta Energy Regulator (“AER”), Sequoia’s licensed properties have been shut-in since March 2018. The natural gas and natural gas liquids sales net to Sequoia from the Property at that time averaged 448 boe/d, consisting of 2.6 MMcf/d of natural gas and 15 bbl/d of natural gas liquids.
McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared an independent reserves evaluation of the properties of the previous operator of the Property, Sequoia Operating Corp. (the “McDaniel Report”). The McDaniel Report is effective December 31, 2017 using McDaniel’s January 2018 forecast pricing.
McDaniel estimated that as of December 31, 2017, the Property contained remaining proved developed producing reserves of approximately 5.8 Bcf of natural gas and 21,800 barrels of natural gas liquids (992,500 boe), with an estimated net present value of approximately $3.3 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 Property will be accepted until 12:00 pm on Thursday, October 25, 2018.
For further information please feel free to contact: Ryan Ferguson Young, Ben Rye, Mark Zalucky, Grazina Palmer, Tom Pavic 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