Sayer Energy Advisors has been engaged to assist Longshore Resources Ltd. (“Longshore” or the “Company”) with the sale of its non-core oil and natural gas interests located in the Consort/Provost area of Alberta (the “Property”).
At Consort/Provost, Longshore holds high, primarily operated working interests including its 100% working interest in the Hamilton Lake Viking Sand B Pool Unit.
Production net to the Company from Consort/Provost for the last six months of 2021 averaged approximately 352 barrels of oil and natural gas liquids per day and 738 Mcf/d of natural gas (465 boe/d). Production is primarily from the Viking Formation.
Operating income net to Longshore for the last six months of 2021 averaged approximately $240,000 per month, or $2.9 million on an annualized basis.
The original oil in place (OOIP) at Consort/Provost is greater than 300 million barrels with the majority located in the Hamilton Lake Viking Sand B Pool Unit (>200 million barrels). Longshore has a 100% working interest in the Unit. To date, the Unit, which was under waterflood from the early 1970s to the early 1980s, has cumulative oil production of 16.7 million barrels, primarily from the Viking C sand with a current recovery factor of approximately 8% within the Unit. Further upside exists with additional locations in unswept areas across both the Hamilton Lake Viking Sand B Pool Unit and the larger Consort/Provost acreage.
As of December 4, 2021, Longshore’s net deemed asset value for Consort/Provost was $5.0 million (deemed assets of $16.9 million and deemed liabilities of $11.9 million), with an LMR ratio of 1.42.
McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared an independent reserves evaluation of Longshore’s properties as part of the Company’s year-end reporting (the “McDaniel Report”). The McDaniel Report is effective December 31, 2021 using an average of McDaniel, GLJ Ltd. and Sproule Associates Limited’s January 1, 2022 forecast pricing. The numbers quoted below are preliminary as the McDaniel Report has not been finalized. McDaniel estimates that, as of December 31, 2021, the Consort/Provost property contained remaining proved plus probable reserves of 557,000 barrels of oil and natural gas liquids and 1.7 Bcf of natural gas (848,000 boe), with an estimated net present value of $5.0 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 this divestiture will be accepted until 12:00 pm on Thursday, March 10, 2022.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.