Coastal Resources Limited (“Coastal” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its non-operated working interests located in the Greater Farrow and Red Rock areas of Alberta (the “Properties”).
Preference will be given to offers to acquire all of the Properties in one transaction; however, offers may be considered for individual properties.
In the Greater Farrow area, Coastal has various non-operated working interests in the Arrowwood, Brant, Farrow, Lomond and Milo areas. The Greater Farrow area is productive from the Elkton, Glauconite, Sunburst, Belly River and Medicine Hat formations.
At Red Rock, Coastal holds non-operated working interests including a 5.52470830% working interest in the Red Rock Chinook Unit No. 1 operated by TAQA North Ltd. Production at Red Rock is from the Chinook Formation.
Average daily sales production net to Coastal from the Properties for the month of October 2022 was approximately 525 Mcf/d of natural gas and 75 barrels of light oil and natural gas liquids per day (163 boe/d).
Operating income net to Coastal from the Properties for the month of October 2022 was approximately $192,000 per month, or $2.3 million on an annualized basis.
S&P Global (“S&P”) prepared an independent reserves evaluation of the Properties specifically for this divestiture (the “S&P Report”). The S&P Report is effective January 1, 2023 using Sproule Associates Limited’s October 31, 2022 forecast pricing. S&P estimated that, as of January 1, 2023, the Properties contained remaining proved plus probable reserves of 197,000 barrels of oil and natural gas liquids and 866 MMcf of natural gas (341,000 boe), with an estimated net present value of $7.0 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 process will be accepted until 12:00 pm on Thursday, March 16, 2023.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.