Seek Energy Ltd. (“Seek” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of its non-operated Fee Title and working interests located in the Lougheed area of southeastern Saskatchewan (the “Property”).
In the Lougheed area of southeastern Saskatchewan, Seek holds a 1.37503% working interest as well as a 0.348975% royalty interest in the Lougheed Midale Beds Voluntary Unit # 1 (the “Unit”) operated by Vermilion Energy Inc. Seek also holds a non-operated 13.2% working interest and a 5.61% royalty interest in one non-unit well 191/03-23-006-15W2/00 (Hummingbird Et Al Lougheed 2Hz 2A11-23-3A3-23-6-15).
The royalty interest held by Seek is derived from its ownership of the Fee Title in a portion of Section 23-006-15W2.
The Property produces $88,000/year in processing income as further described below.
Average daily royalty and working interest production net to Seek from the Unit in February 2021 was approximately nine barrels of oil per day. Average daily royalty and working interest production net to Seek from the non-unit 191/03-23 well in February 2021 was approximately one barrel of oil per day.
Net operating income from the Property for the first two months of 2021 on an annualized basis was approximately $180,000, or $15,000 per month. This includes approximately $7,300 per month in emulsion processing and saltwater disposal income and approximately $2,600 per month in royalty income.
Acipenser Resources Ltd. (“Acipenser”) prepared an independent reserves evaluation of the Property (the “Acipenser Report”). The Acipenser Report is effective March 1, 2021 using average pricing from three independent consultant evaluators, including, GLJ Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Limited (“3 Consultants’ Average”) January 1, 2021 forecast pricing. Acipenser estimates that, as of March 1, 2021, the Property contained remaining proved plus probable reserves of 36,400 barrels of oil (28,700 barrels of working interest reserves and 7,700 barrels of royalty interest reserves), with an estimated net present value of $1.0 million ($738,000 working interest and $266,000 royalty interest) 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.
Offers relating to this divestiture will be accepted until 12:00 pm on Thursday June 17, 2021.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.