Grandview Exploration Inc. (“Grandview” or the “Company”) has engaged Sayer Energy Advisors to assist it with a strategic alternatives process. Grandview would entertain offers for its working interests in the Rich area of Alberta (the “Property”) or offers for the shares of the Company. Grandview is a privately-held company with a small number of shareholders.
Grandview had approximately $9.2 million in unused Canadian income tax pools as of December 31, 2020, with no conventional bank debt. Grandview has an LMR ratio of 2.29 with a net deemed asset value of $1.3 million (deemed assets of $2.3 million and deemed liabilities of $1.0 million) as at February 5, 2022.
The Rich property consists of a 100% owned and operated, sweet, medium gravity oil pool which is defined by long-life, low-decline production. The Property has low operating costs, strong netbacks, year-round access, various P&NG rights held by production to basement, no competitive drainage and multiple zone potential.
Current production from the Property is approximately 70 barrels of oil per day. The Company has an extensive reservoir simulation including a water/surfactant polymer flood which would increase the recovery factor in the pool to 23%-46% of the 33 million barrels of oil originally in place. As of January 31, 2022, Grandview has remaining C* royalty reductions of $5.9 million associated with the well Grandview Xp Hz 103 Rich 02/09-25-034-21W4/0.
Grandview is forecasting net operating income on a proved developed producing basis to be $1,600,000 in 2022.
Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Rich property as part of Grandview’s year-end reporting (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. The numbers quoted below are preliminary as the Sproule Report has not been finalized. Sproule estimates that, as of December 31, 2021, the Rich property contained remaining proved plus probable reserves of 910,000 barrels of oil with an estimated net present value of $18.1 million using forecast pricing at a 10% discount.
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).
Proposals relating to this process will be accepted until 12:00 pm on Thursday, April 14, 2022.
For further information please feel free to contact: Ben Rye, Grazina Palmer or Tom Pavic at 403.266.6133.