Superb Operating Company Ltd. (“Superb” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain of its non-core oil interests located in the Superb area of Saskatchewan (the “Property”). Superb’s parent company is an alternative energy producer and is divesting the Property to focus on its hydrogen production assets.
The Company believes the Property would support 15 additional multi-lateral horizontal development wells with 70 million barrels of OOIP in the Waseca reservoir. Estimated capital costs to drill, complete and equip are $1.6 million per well.
Superb also believes the Property could be developed with 20-30 vertical CHOPS wells at 40-acre spacing. There are proven historical horizontal wells offsetting the Property on the same geological trend and the Property is on trend with established steam projects and presents an opportunity to drill SAGD well pairs for steam development.
Current production net to the Company from the Property is approximately 27 barrels of heavy oil per day. Operating income net to the Company from the Property for the twelve months ended February 29, 2024 was approximately ($380,000) due to several workovers.
As of April 28, 2024, the Property had a deemed net asset value of $9,910 (deemed assets of $306,010 and deemed liabilities of $296,100), with an LMR ratio of 1.03.
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the North Block (the “GLJ Report”). The GLJ Report is effective December 31, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Limited and Sproule Associates Limited’s April 1, 2024 forecast pricing (“3C Average April 1, 2024”). GLJ estimated that, as of December 31, 2023, the North Block contained remaining proved plus probable reserves of 945,000 barrels of heavy oil (945,000 boe), with an estimated net present value of $14.0 million using forecast pricing at a 10% discount.
Superb prepared an internal reserves evaluation of the South Block (the “Internal Report”). The Internal Report is effective December 31, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Limited and Sproule Associates Limited’s January 1, 2024 forecast pricing (“3C Average”). Superb estimated that, as of December 31, 2023, the South Block contained remaining proved plus probable reserves of 1.1 million barrels of heavy oil (1.1 million boe), with an estimated net present value of $24.3 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.