Coastal Resources Limited (“Coastal” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of certain of its oil and natural gas interests located in Alberta (the “Properties”).
The Properties consist of operated and non-operated working interests in the Central AB, Northern AB and Southern AB packages.
Preference will be given to offers to acquire all of the Properties in one transaction; however, offers may be considered for individual properties.
Operating income net to Coastal from the Properties for the six months ended June 30, 2024 was approximately $105,000 per month, or $1.3 million on an annualized basis.
InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties specifically for this divestiture (the “InSite Report”). The InSite Report is a sensitivity evaluation of a report dated April 30, 2023 which was mechanically updated to April 30, 2024 using Sproule Associates Limited’s April 30, 2024 forecast pricing. InSite estimated that, as of April 30, 2024, the Properties contained remaining proved plus probable reserves of 2.0 million barrels of oil and natural gas liquids and 5.8 Bcf of natural gas (3.0 million boe), with an estimated net present value of $20.3 million using forecast pricing at a 10% discount.
The Company has identified 26 drilling opportunities, 15 well reactivations, two optimizations and one recompletion opportunity on the Properties. The majority of the drilling locations and reactivation opportunities are identified in the InSite Report as either proven or probable reserves. In addition to the InSite Report, other projects have also been identified. On a risked-basis, the Company believes there is potential to add over 1,000 boe/d net production (85% medium to light oil).
As of October 5, 2024, the Properties had a deemed net asset value of ($1.5 million) (deemed assets of $9.6 million less liabilities of $11.1 million), with an LMR ratio of 0.86.
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, December 12, 2024. Preference will be given to offers to acquire all of the Properties in one transaction.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.