On March 23, 2018, pursuant to the Bankruptcy and Insolvency Act (“BIA”), Sequoia Resources Corporation (“Sequoia” or the “Company”), filed an assignment in Bankruptcy and PricewaterhouseCoopers Inc. LIT was appointed as Licensed Insolvency Trustee (the “Trustee”).
Sayer Energy Advisors has been engaged to assist the Trustee with the sale of Sequoia’s remaining oil and natural gas properties (the “Properties”).
Further to a closure order from the Alberta Energy Regulator, Sequoia’s licensed properties have been shut-in since March 2018. As a result, all production numbers stated herein reflect the production capability of the various wells or properties prior to the shut-in.
The Properties consist of both operated and non-operated interests located throughout Alberta. For this offering, the Properties are separated into five geographical packages.
Prior to the closure order, average production net to Sequoia from the Properties was approximately 5,150 boe/d consisting of 29.9 MMcf/d of natural gas and 165 barrels of oil and natural gas liquids per day.
Since the shut-in of its licensed properties, the Company has continued to collect significant revenue from third-party road use. Sequoia has received approximately $7.2 million in gross third-party road use revenue since March 2018. Additional revenue potential exists in go-forward maintenance fees pertaining to the roads which have not been charged since the shut-in order. Over 95% of all the revenue has been generated though 14 road use dispositions. The majority of these roads are located in the Marten Hills area of Alberta which has seen significant activity in the Clearwater horizontal oil play. The companies which have been paying the majority of the road use fees are Headwater Exploration Inc., Spur Petroleum Ltd. and Tamarack Valley Energy Ltd.
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).
Offers relating to this process will be accepted until 12:00 pm on Thursday, July 4, 2024.
For further information please feel free to contact: Ben Rye, Sydney Birkett or Tom Pavic at 403.266.6133.