Emerald Lake Energy Ltd. (“Emerald Lake” or the “Company”) has engaged Sayer Energy Advisors to assist it with a corporate sale process.
Emerald Lake is a private junior oil and natural gas company with long life working interests in located in the Cyn-Pem, Carson Creek North, Harmattan East, Homeglen Rimbey, Medicine River and Progress areas of Alberta (the “Properties”). The Properties consist primarily of non-operated working interests in several units. In addition, the Company holds certain interests in Fee Title lands and GORR interests (“GORR/Fee Title Royalties”).
Emerald Lake’s preference is a sale of the shares of the Company but it will also entertain separate offers for the GORR/Fee Title Royalties.
Average daily sales production net to Emerald Lake from the Properties for the fourth quarter of 2023 was approximately 233 boe/d, consisting of approximately 178 bbl/d of oil and natural gas liquids and 330 Mcf/d of natural gas.
Operating income net to Emerald Lake for the fourth quarter of 2023 was approximately $402,000 or approximately $1.6 million annualized. These numbers do not reflect the recent reduction in annual operating expenses estimated to be approximately $500,000 because of lower electrical costs and capital reductions.
As at December 31, 2023, Emerald Lake had total unused Canadian income tax pools of approximately $3.2 million.
The Properties consist largely of non-operated unit interests. The Company’s only operated interests are two wells located at Harmattan. As of February 3, 2024, the Harmattan property had a deemed net asset value of $1.4 million (deemed assets of $1.6 million and deemed liabilities of $210,710), with an LMR ratio of 7.67.
Emerald Lake’s reserve volumes have continuously realized positive annual revisions from GLJ Ltd. (“GLJ”), the Company’s third-party reserve evaluator. The RLI for the Properties on a proved developed producing basis is 9.3 years. GLJ prepared an independent reserves evaluation of the Properties as part of the Company’s year-end reporting (the “GLJ Report”). The GLJ Report is effective December 31, 2023 using GLJ’s January 1, 2024 forecast pricing. GLJ estimated that, as at December 31, 2023, the Properties contained remaining proved plus probable reserves of 924,000 barrels of oil and natural gas liquids and 1.5 Bcf of natural gas (1.2 million boe), with an estimated net present value of $18.2 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).
Offers relating to this process will be accepted until 12:00 pm on Thursday, May 30, 2024.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.