Sayer Energy Advisors has been engaged to assist a senior oil and natural gas exploration and production company (the “Company”) with the sale of its non-core natural gas property located in the Dunvegan area of Alberta (the “Property”).
In the Dunvegan area of Alberta, the Company holds a 4.29% working interest in the Dunvegan Gas Unit No. 1 (the “Unit”), which is operated by Canadian Natural Resources Limited, as well as various other interests surrounding the Unit. A large portion of the production and cash flow from the Property is from the Company’s interest the Unit.
First quarter 2019 average production net to the Company from the Property averaged approximately 1.8 MMcf/d of natural gas and 98 barrels of oil and natural gas liquids per day (412 boe/d). This includes approximately 1.4 MMcf/d of natural gas and 14 barrels of oil and natural gas liquids per day (315 boe/d) from the Unit.
Net operating income from the Property totaled approximately $787,000 in 2018. This includes approximately $704,000 of net operating income from the Company’s interest in the Unit.
The Company prepared an internal reserves evaluation of the Property specifically for this divestiture (the “Reserve Report”). The Reserve Report was audited by Sproule Associates Limited (“Sproule”). The Reserve Report is effective March 31, 2019 using Sproule’s March 31, 2019 forecast pricing. The Company estimates that, as of March 31, 2019, the Property contained remaining proved plus probable reserves of 4.6 Bcf of natural gas and 293,000 barrels of oil and natural gas liquids (1.1 million boe), with an estimated net present value of $5.1 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 relating to acquire the Property will be accepted until 12:00 pm on Thursday, September 19, 2019.
For further information please feel free to contact: Ben Rye, 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