Vermilion Energy Inc. (“Vermilion” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its working interests located in the Alexander area of Alberta (the “Property”).
At Alexander, Vermilion holds primarily operated working interests in approximately 17.25 sections of land. Production from the Alexander property is primarily from the Wabamun, Detrital and Alexander formations. Additional targets include the Mannville Group.
Average daily sales production net to Vermilion from Alexander for the first quarter of 2023 was approximately 149 boe/d, consisting of 110 bbl/d of oil and natural gas liquids and 231 Mcf/d of natural gas.
Operating income net to Vermilion from Alexander for the first quarter of 2023 was approximately $127,500 per month, or $1.5 million on an annualized basis.
At Alexander, Vermilion has identified additional development targets in the Mannville Group which include recompletions and up to 20 potential new horizontal drilling locations.
As of October 7, 2023, the Alexander property had a deemed net asset value of ($2.1 million) (deemed assets of $5.7 million and deemed liabilities of $7.8 million), with an LMR ratio of 0.73.
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Property as part of the Company’s year-end reporting (the “GLJ Report”). The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing. GLJ estimated that, as of December 31, 2022, the Alexander property contained remaining proved plus probable reserves of 812,000 barrels of oil and natural gas liquids and 1.1 Bcf of natural gas (993,000 boe), with an estimated net present value of $17.8 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, November 23, 2023.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.