On January 28, 2020, the Alberta Court of Queen’s Bench (the “Court”) made an order (the “Receivership Order”) appointing Alvarez & Marsal Canada Inc. (“A&M”) as receiver and manager (“the Receiver”) over all of Strategic Oil & Gas Ltd.’s and Strategic Transmission Ltd.’s (together “Strategic” or the “Company”) current and future assets, undertakings and properties of every nature and kind whatsoever situated in the Northwest Territories, including all proceeds thereof and including, without limiting the generality of the foregoing, any letters of credit issued in respect of assets situated in the Northwest Territories (the “NWT Property”).
Additionally, Strategic holds legal title to, and is the licensee of, a pipeline which crosses the border between Alberta and the Northwest Territories (the “Interprovincial Pipeline”). While the Receiver does not have possession of this Interprovincial Pipeline, nor is it in care and custody of such pipeline, on July 19, 2021, the Receiver obtained an order from the Court (the “Sales Process Order”), permitting the Receiver to conduct a sale solicitation process (“SSP”) respecting the NWT Property and the Interprovincial Pipeline. For the purposes of this SSP, all references to NWT Property shall include reference to the Interprovincial Pipeline.
The Receiver has engaged Sayer Energy Advisors to assist with the sale of Strategic’s interests in the Cameron Hills area of the Northwest Territories as well as Strategic’s Interprovincial Pipeline.
Under the SSP, all qualified interested parties will be provided with an opportunity to participate in the SSP. The SSP is intended to solicit interest in a sale of the NWT Property. Any agreement arising from the SSP will be subject to approval by the Court in Strategic’s receivership proceedings. A copy of the SSP is found on our website at www.sayeradvisors.com. All capitalized terms used but not otherwise defined herein shall have the meaning given to them in the SSP. In the event of any conflict between the marketing information and the terms of the SSP, the terms of the SSP shall prevail.
Strategic holds an average 86% working interest in 86,223 acres (74,207 net acres) in the Cameron Hills area of the Northwest Territories just north of the border with Alberta. Strategic also holds a 100% interest in an Interprovincial Pipeline which connects the gathering system at the central battery in Cameron Hills to a natural gas plant located in the Bistcho Lake area of Alberta at 06-32-122-02W6 owned by Tallahassee Exploration Inc.
Production has been shut-in since 2015 due to commodity prices. Production consisted primarily of oil and natural gas from the Keg River and Sulphur Point formations, and natural gas from the Slave Point Formation.
Prior to being shut-in, average daily production for calendar 2014 net to Strategic from Cameron Hills was approximately 571 boe/d consisting of 2.2 MMcf/d of natural gas and 200 barrels of oil and natural gas liquids per day. Natural gas from Cameron Hills was processed at the Bistcho Lake facility in Alberta.
The main compressor facility at Cameron Hills at H-03 60-10 117-30 is connected via pipeline to the sour natural gas plant and oil battery in the Bistcho area of Alberta at 06-32-122-02W6. There is also a water injection well at 300/A03 60-10 117-30/0.
Strategic owns a 12” Interprovincial Pipeline which ties the gathering system at the H-03 central battery at grid area 60° 10’ N, 117° 30’ W at Cameron Hills to the Bistcho Lake natural gas plant 06-32-122-02W6 located in Alberta. The pipeline runs approximately 75 kilometres south of Cameron Hills through a pipeline header at 05-24-126-22W5M.
McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared an independent reserves evaluation of Strategic’s properties as part of the Company’s year-end reporting in 2015 (the “McDaniel Report”). The McDaniel Report is effective December 31, 2015 using McDaniel’s January 1, 2016 forecast pricing. McDaniel estimates that, as of December 31, 2015, the Cameron Hills property contained remaining proved plus probable reserves of 498,000 barrels of oil (498,000 boe), with an estimated net present value of $6.1 million using forecast pricing at a 10% discount. Note that all natural gas from Cameron Hills was previously processed at the Bitscho Lake facility in Alberta, which was shut-in. As a result, no natural gas reserves have been assigned to the NWT Property.
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).
Offers relating to this divestiture will be accepted until 12:00 pm on Thursday, September 23, 2021.
For further information please feel free to contact: Ben Rye, Grazina Palmer or Tom Pavic at 403.266.6133.