CPE Pembina Lands Ltd. (“CPE” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale or farmout of its 100% interest in a Nisku prospect in the Pembina area of Alberta (the “Property”). The Property is prospective for oil and natural gas production from the Nisku Formation (the “Nisku Prospect”).
CPE holds a 100% working interests in the P&NG rights in the Nisku Formation in nine sections of Crown land in the Pembina area of Alberta. The rights include a four-year license in Sections 1 and 2-050-07W5 and Sections 34, 35 and 36-049-07W5 with a primary term expiring April 4, 2023 unless otherwise continued under section 8(1)(h) extensions.
The principal seismic anomalies of the Nisku Prospect are covered by this license. Additionally, the Company holds a 100% working interest in the P&NG rights in the Nisku Formation in Sections 20 and 29-049-7W5 with the primary term expiring in 2026. CPE also holds the P&NG rights in Sections 6 and 7-050-06W5, subject to a 2% gross overriding royalty payable to Teine Energy Ltd.
The Nisku Formation at Pembina was deposited as a reef complex within the Late Devonian resulting in a reservoir that is highly permeable with a net pay zone of approximately 15-25 metres in thickness. The Nisku trends southwest to northeast from Township 45 Range 23 W5 to Township 51 Range 4 W5.
The Nisku Prospect has been defined by seismic anomalies which have been identified by two 3D seismic programs shot during the period 2004-2005, one by West Energy Ltd. and one by Highpine Oil & Gas Limited. Both West Energy and Highpine are predecessor companies to Sinopec Energy Canada Ltd.
A copy of the 3D seismic which was acquired by Bashaw Oil Corporation from Sinopec was used for the basis of the exploration play, following which, Bashaw merged with Clearview Resources Ltd. Management presentations relating to the Property, including a review of the interpretations of the 3D seismic data will be made available to parties that execute a confidentiality agreement.
The Property includes drilling locations for three exploratory Nisku wells, (one of which will be converted to a Nisku water injection well) and one Wabamun water source well.
CPE prepared an internal reserves evaluation of the Nisku Prospect effective December 31, 2021 using GLJ Ltd.’s January 1, 2022 forecast pricing (the “Reserve Report”). CPE estimated that, as of December 31, 2021, the Property contained remaining proved plus probable reserves of 4.1 million barrels of oil and natural gas liquids and 3.4 Bcf of natural gas (4.7 million boe) with a net present value of $57.0 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).
Proposals relating to this divestiture will be accepted until 12:00 pm on Thursday, June 16, 2022.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.