West Lake Energy Corp. (“West Lake” or the “Company”) has engaged Sayer Energy Advisors to assist with the sale of all its oil and natural gas interests in the Province of Saskatchewan. The producing properties are located in the Battle River, Cactus Lake, Celtic, Epping, Furness, Lashburn, Mervin, Pikes Peak, Silverdale and Tangleflags areas of Saskatchewan and the non-producing properties are located in the Ear Lake, Freemont, Macklin, Maidstone, Manitou, Marsden, Primate and Rush Lake areas of Saskatchewan (the “Properties”).
The Properties are generally located near Lloydminster, Saskatchewan and have minimal impending expiries.
West Lake operates all of the Properties, generally holding a 100% working interest including associated facilities. The Company has ownership in significant seismic data coverage relating to the Properties.
Total production net to West Lake from the Properties in the first quarter of 2022 averaged approximately 1,152 boe/d, consisting of 1,134 barrels of heavy oil per day and 108 Mcf/d of natural gas.
West Lake has identified drill ready, booked locations which are available to increase production to 2,500 barrels of oil per day.
West Lake has mapped significant upside on the Properties which resulted in 33 proven plus probable horizontal and vertical drilling locations. Drilling opportunities include horizontal multi-lateral, single leg horizontal, and vertical drilling locations. An additional 104 unbooked locations have been identified. A total of 73 proven plus probable reactivation candidates have been identified.
Net operating income from the Properties averaged approximately $1.9 million in March 2022, or $22.5 million on an annualized basis.
As of April 28, 2022, the Properties had a positive deemed net asset value of $1.6 million (deemed assets of $31.0 million less liabilities of $29.4 million), with an LMR ratio of 1.06.
West Lake has $0.8 million of Accelerated Site Closure Program funding remaining. In addition, West Lake plans to spend an additional $1.5 million prior to the end of the second quarter of 2022 on abandonments, reclamation, and remediation.
McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared an independent reserves evaluation of West Lake’s properties effective December 31, 2021 as part of the Company’s year-end reporting (the “McDaniel Report”). The McDaniel Report was then mechanically updated by McDaniel to an effective date of March 31, 2022 using an average of GLJ Ltd., McDaniel and Sproule Associates Limited’s April 1, 2022 forecast pricing. McDaniel estimates that, as of March 31, 2022, the Properties contained remaining proven plus probable reserves of approximately 5.6 million barrels of oil, with an estimated net present value of $75.1 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, June 23, 2022.
Preference will be given to offers to acquire all of the Properties on a white map basis; however, offers may be considered for individual properties.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.