Primrose Drilling Ventures Ltd. (“Primrose” or the “Company”) has engaged Sayer Energy Advisors to assist it with a sale of the shares of the Company.
Primrose is a private junior oil and natural gas company with operated working interests located in the Fenn West and Bon Accord areas of Alberta and additional working interests in certain non-producing wells located in the Peco, Provost, Sunnynook, Red Willow and Wildwood areas of Alberta (the “Properties”).
The Company currently has positive working capital of approximately $1,700,000.
The Company also holds an operator’s license in Saskatchewan but currently does not own any oil and natural gas interests in Saskatchewan. Primrose is a tightly-held private company with only one shareholder and no debt or severance obligations. The shares of Primrose are held by 1280417 Alberta Ltd.
Average daily sales production net to Primrose from the Properties for the fourth quarter of 2022 was approximately 93 Mcf/d of natural gas and 10 barrels of oil per day (26 boe/d).
Operating income net to Primrose from the Properties in the fourth quarter of 2022 averaged approximately $6,400 per month, or $76,800 on an annualized basis.
As of April 1, 2023, Primrose had total deemed assets of $1.0 million, deemed liabilities of ($939,416) (net deemed assets of $85,695) with an LMR of 1.09. These numbers include Primrose’s security deposit with the Alberta Energy Regulator of approximately $263,916.
The Company prepared an internal reserves evaluation of the Properties (the “Reserve Report”) as part of the Company’s year end reporting. The Reserve Report is effective January 1, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s March 31, 2023 forecast pricing (“3C Average”). Primrose estimated that, as at January 1, 2023, the Properties contained remaining proved developed producing reserves of 69,000 barrels of oil and natural gas liquids and 493 MMcf of natural gas (151,000 boe), with an estimated net present value of $1.4 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 process will be accepted until 12:00 pm on Thursday, June 29, 2023.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.