Turm Oil & Gas Ltd. (“Turm” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with a strategic alternatives process. Turm is open to reviewing all alternatives, with potential outcomes to this process including, but not limited to, a sale of some or all of the assets, a recapitalization of the Company or a sale or merger of the Company.
Turm is a privately-held oil and natural gas company incorporated in Saskatchewan in 2019 with a small number of shareholders, no severance obligations, with most services being provided by contractors and no office lease obligation. The Company’s heavy oil properties are located near the town of Lloydminster in the Neilburg, Lashburn-Maidstone, Edam, Aberfeldy and Gully Lake areas of Saskatchewan (the “Properties”).
Current production net to Turm from the Properties consists of approximately 150 barrels of 12-16° API oil per day from ten producing oil wells at Neilburg. Maidstone-Lashburn and Gully Lake. Earlier this year, the Company shut-in production with the onset of the COVID-19 pandemic. Prior to the shut-in, Turm’s net average daily production from the Properties in January 2020 was approximately 638 barrels of oil per day from 27 wells.
The Company has identified approximately 12 vertical and 13 multilateral horizontal drilling locations along with approximately 192 existing reactivation candidates. Of these reactivation candidates, 93 are fully equipped and 64 are equipped with SCADA.
Turm has received over $360,000 Phase 1 Accelerated Site Closure Program funding from the government of Saskatchewan and intends to use this funding in the fourth quarter of 2020 on seven locations which it has identified. Turm also expects to receive further funding through the three additional phases of funding remaining in this program. Additional funding would be used to improve the Company’s LMR by reducing its outstanding liabilities.
As of August 28, 2020, Turm’s net deemed asset value was $2.84 million (deemed assets of $12.26 million and deemed liabilities of $9.42 million), with an LMR ratio of 1.30.
Turm currently has total tax pools of approximately $14 million. Additional corporate information relating to Turm will be provided to parties upon execution of a confidentiality agreement.
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).
Proposals relating to this process will be accepted until 12:00 pm on Thursday, December 3, 2020.
For further information please feel free to contact: Ben Rye, Grazina Palmer or Tom Pavic at 403.266.6133.