Vermilion Energy Inc. (“Vermilion” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its operated working interests located in the Greater Kindersley area of West Central Saskatchewan (the “Property”).
In the Greater Kindersley area, Vermilion has various operated working interests in the Dodsland, Kerrobert, Lucky Hills, Plato North, Superb and Whiteside areas.
The Greater Kindersley area is productive primarily from the Viking Formation.
Forecasted average daily sales production net to Vermilion from the Greater Kindersley area on a proved developed producing basis for the four months ended December 31, 2023 is approximately 188 barrels of oil and natural gas liquids per day and 19 Mcf/d of natural gas (191 boe/d).
Forecasted operating income net to Vermilion from the Greater Kindersley area on a proved developed producing basis for the four months ended December 31, 2023 is approximately $1.0 million, or $3.0 million on an annualized basis.
Vermilion has identified additional horizontal infill drilling locations with as many as 10 horizontal wells per section on its lands in the Greater Kindersley area. The Company believes that developing the Property at a pace of approximately nine horizontal wells per year would result in net production of up to 1,000 bbl/d of oil.
As of August 28, 2023, the Greater Kindersley property had a deemed net asset value of $4.1 million (deemed assets of $15.4 million and deemed liabilities of $11.3 million), with an LMR ratio of 1.36.
McDaniel & Associates Consultants Ltd. (“McDaniel”) prepared an independent reserves evaluation of the Property (the “McDaniel Report”). The McDaniel Report is effective August 31, 2023 using an average of McDaniel, GLJ Ltd. and Sproule Associates Limited (“Three Consultant Average”) forecast pricing at July 1, 2023. McDaniel estimated that, as at August 31, 2023, the Property contained remaining proved plus probable reserves of 3.2 million barrels of oil and natural gas liquids and 23 MMcf of natural gas (3.2 million boe), with an estimated net present value of $49.1 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 process will be accepted until 12:00 pm on Thursday, October 26, 2023.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.