CLEO Energy Corp. (“CLEO” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain of its non-core oil and natural gas interests located in the Alliance, Atlee and Fabyan areas of Alberta (the “Properties”).
Average daily sales production net to CLEO from the Properties for the fourth quarter of 2023 was approximately 409 boe/d, consisting of approximately 2.2 MMcf/d of natural gas and 47 bbl/d of oil and natural gas liquids. Current production from the Properties is approximately 506 boe/d, consisting of 2.5 MMcf/d of natural gas and 87 bbl/d of oil and natural gas liquids after recent re-activations done by CLEO at Atlee.
Operating income net to CLEO from the Properties for the fourth quarter of 2023 was approximately $118,000. Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
At Fabyan, CLEO controls all of the pipeline infrastructure in the area necessary for both oil development and associated natural gas egress. The area has significant offsetting potential including the Viking and Upper Mannville Sparky oil reservoirs, which would require use of the Company’s pipeline infrastructure.
As of April 3, 2024, the Properties had a deemed net asset value of $1.1 million (deemed assets of $14.2 million and deemed liabilities of $13.1 million), with an LMR ratio of 1.08.
Deloitte LLP (“Deloitte”) prepared an independent reserves evaluation of CLEO’s Properties (the “Deloitte Report”) as part of the Company’s year-end reporting. The Deloitte Report is effective December 31, 2022 using Deloitte’s January 1, 2023 forecast pricing. The Company does not have a current third-party reserve report reflecting the recent disposition of certain of its interests at Fabyan. Deloitte estimated that, as at December 31, 2022 the Properties excluding CLEO’s interests at Fabyan contained remaining proved plus probable reserves of 646 MMcf of natural gas and 194,000 barrels of oil and natural gas liquids (302,000 boe), with an estimated net present value of $3.2 million using forecast pricing at a 10% discount.
Summary information relating to this divestiture is attached to this correspondence. 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, June 27, 2024.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.