Lycos Energy Inc. (“Lycos” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain non-core oil and natural gas interests located in the Mikwan/Elnora area of Alberta (the “Property”).
The Property consists of operated, 100% working interest oil production from the Duvernay Formation and extensive prospective Duvernay acreage. Lycos is selling the Property in order to focus its operations in its core areas.
Average daily production net to Lycos from the Property for the first four months of 2023 was approximately 48 barrels of oil per day.
Operating income net to Lycos from the Property for the first four months of 2023 averaged approximately $33,400 per month, or approximately $400,000 on an annualized basis.
The Company has identified 230 million barrels of recoverable oil in place in the Lower and Upper Duvernay shales on its lands.
As of June 3, 2023, the Property had a deemed net asset value of $1.6 million (deemed assets of $2.7 million and deemed liabilities of $1.1 million), with an LMR ratio of 2.49.
Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Property (the “Sproule Report”). The Sproule Report is effective March 1, 2023 using Sproule’s February 28, 2023 forecast pricing. Sproule estimates that, as at March 1, 2023, the Mikwan property contained remaining proved plus probable reserves of 8,000 barrels of oil, with an estimated net present value of $41,000 using forecast pricing at a 10% discount and the Elnora property contained remaining proved plus probable reserves of 45,000 barrels of oil, with an estimated net present value of $967,000 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).
Cash offers relating to this process will be accepted until 12:00 pm on Thursday, August 10, 2023.
For further information please feel free to contact: Ben Rye, Sydney Birkett, or Tom Pavic at 403.266.6133.