Fallon Energy Inc. (“Fallon” or the “Company”) has engaged Sayer Energy Advisors to assist with the sale of its oil and natural gas interests located in the Greater Lloydminster areas of Saskatchewan (the “Properties”).
Fallon operates all of the Properties, generally holding a 100% working interest including associated facilities. The Properties are generally located near Lloydminster, Saskatchewan in the Battle River, Big Gully, Forest Bank, Furness, Lashburn, Lone Rock, Maidstone, Marshall, Neilburg, Tangleflags and Unwin areas.
Fallon has recently optimized, reactivated and recompleted several wells on the Properties which resulted in increased production rates. The Company is in the process of optimizing several additional wells.
The Company also converted one well to water injection, with one more conversion in progress. The conversions are expected to significantly reduce the expenses and trucking costs associated with the Properties.
Current production net to Fallon is estimated to be approximately 500 bbl/d of heavy oil. Total sales production net to Fallon from the Properties for July-August 2025 averaged approximately 355 bbl/d of heavy oil (355 boe/d).
The Company anticipates net operating income for 2026 to be approximately $5.3 million. Net operating income from the Properties averaged approximately $78,000 per month for July-August 2025, or $936,000 on an annualized basis.
Fallon successfully completed an oil/water conversion in an existing oil well at Unwin. After setup and commissioning of the water disposal well, it is currently on vacuum and disposing of approximately 400 m3 of water per day. This conversion has significantly reduced the operating expenses and trucking costs associated with the Properties. Fallon estimates that the netback will improve by $9/bbl, saving approximately $85,000 per month. A second water disposal well is expected to be brought on by December 2025, which is estimated to improve the netback by $20/bbl at Marshall which would result in savings of approximately $100,000 per month in trucking and associated expenses.
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”). The GLJ Report is effective February 28, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Ltd. and Sproule ERCE’s January 1, 2023 forecast pricing. GLJ estimates that, as at February 28, 2023, the Properties contained remaining proved plus probable reserves of 5.6 million barrels of heavy oil (5.6 million boe), with an estimated net present value of $92.9 million using forecast pricing at a 10% discount.
As of October 21, 2025, the Properties had a positive deemed net asset value of $4.2 million (deemed assets of $10.9 million less deemed liabilities of $6.7 million), with an LMR ratio of 1.62.
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, December 11, 2025.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.