Ernst & Young Inc. in its capacity as Court-appointed receiver and manager (the “Receiver”) of Traverse Energy Ltd. (“Traverse” or the “Company”) has engaged Sayer Energy Advisors to assist with the sale of all of the Company’s remaining oil and natural gas properties which are located primarily in southern and central Alberta.
The Court of Queen’s Bench of Alberta approved the sales and investment solicitation process (“SISP”) on February 14, 2020, along with the Receiver entering into a purchase and sale agreement (the “Stalking Horse APA”) to sell all of the oil and natural gas assets (the “Properties”) of Traverse to Barrel Oil Corp for approximately $3.25 million. The purpose of the SISP is to determine whether a higher and better offer than the Stalking Horse APA may be obtained.
The Company’s core assets are located in the Carbon, Turin and Greater Coyote areas of Alberta as well as a substantial prospective Duvernay land base located in the Buffalo Lake, Chigwell and Pigeon Lake areas of Alberta. The Greater Coyote area includes properties in the Chain Lakes, Coyote, Hanna, Michichi, and Watts areas of Alberta. The Company also has additional Minor Properties which include working interests and gross overriding royalty (“GORR”) interests in various areas of Alberta.
Further details regarding the SISP and Stalking Horse APA and the marketing process can be found on our website at www.sayeradvisors.com. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement.
As of February 1, 2020, Traverse had net deemed asset value of $9,440,778 (deemed assets of $14,675,866 and deemed liabilities of ($5,235,088)) with an LMR of 2.80.
Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of Traverse’s Properties as part of the Company’s year-end reporting (the “Sproule Report”). The Sproule Report is effective December 31, 2018 using Sproule’s January 1, 2019 forecast pricing. Sproule estimates that, as of December 31, 2018, the Properties contained remaining proved plus probable reserves of 1.1 million barrels of oil and natural gas liquids and 4.7 Bcf of natural gas (1.9 million boe), with an estimated net present value of $27.7 million using forecast pricing at a 10% discount.
Binding offers as outlined in the SISP relating to this divestiture will be accepted until 12:00 pm on Thursday, March 26, 2020.
For further information please feel free to contact: Ben Rye, Grazina Palmer or myself at 403.266.6133.
Tom Pavic, CFA
SAYER ENERGY ADVISORS
1620, 540 – 5th Avenue SW
Calgary, Alberta T2P 0M2
P: 403.266.6133 F: 403.266.4467