Sayer Energy Advisors has been engaged to assist Athabasca Oil Corporation (“Athabasca” or the “Company”) with the farmout or sale of its oil and natural gas interests located in the Karr area of Alberta (the “Property”).
The Property consists of a 100% working interest in approximately 51,000 acres of land which was acquired by Athabasca as four-year Crown mineral rights licenses. These lands were acquired because of their position within the up-dip oil prone leg of the Montney Formation within the Deep Basin.
There is no production from the Property. The Property is prospective for oil and natural gas drilling in the Montney Formation.
The Company has identified approximately 585 million barrels of oil originally in place in the Lower Middle Montney interval at Karr.
At Karr, the Company has identified approximately 100 1.5-mile lateral drilling locations in the Montney Formation using 400 metre well spacing.
In addition to the Montney Formation, the Company also believes the Cardium, Dunvegan, Duvernay and Beaverhill Lake formations to be prospective for oil and natural gas at Karr.
Recent Montney development at Karr has been very active. Several operators in the region have been developing the reservoir, with over 410 wells drilled in the Montney since 2018. The Company’s lands at Karr lie between the low-pressure Deep Basin oil deposits to the north and east at Ante Creek and the high-pressure Deep Basin natural gas liquids trend to the southwest at Kakwa.
Athabasca has surveyed and is in the process of acquiring a surface location at 16-11-065-27W5 which can be utilized for a stratigraphic or lateral well. This location is also controlled by regional trade 2D seismic line(s). The economics of the 1.5-mile horizontal wells indicate a net present value at a 10% discount of approximately $10.6 million using a flat oil price of $85.00 WTI and a flat natural gas price of $4.00 AECO.
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 opportunity will be accepted until 12:00 pm on Thursday, October 27, 2022.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.