Close
Save

Offering Details


Back

Under Review   /   Battle River Energy Ltd.



Battle River Energy Ltd.

Property Divestiture
Bid Deadline: June 30, 2021 12:00 PM
Download Full PDF - Printable


OVERVIEW

Battle River Energy Ltd. (“Battle River” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain non-core natural gas interests located in the Provost area of Alberta, specifically the Sullivan Lake, Provost Viking Sand Gas Unit, Battle River Gas, North Provost Gas Unit and Kessler areas (the “Properties”). Battle River is selling the Properties in order to focus its operations on its core assets.

Current daily production net to Battle River from the Properties is approximately 7.8 MMcf/d of natural gas and 245 barrels of oil and natural gas liquids per day (1,543 boe/d).

Battle River’s forecast of net operating income from the Properties is approximately $4.6 million, or $380,000/month.

Overview Map Showing the Location of the Divestiture Properties

Provost Area

In the Provost area of Alberta, Battle River has interests in the Sullivan Lake, Provost Viking Sand Gas Unit, Battle River Gas, North Provost Gas Unit and Kessler areas.

The following map shows the geographical breakdown and the units associated with the Properties.



Wireline Swabbing

Battle River recently completed a swabbing program which added 1.1 MMcf/d of net raw natural gas production by re-activating 20 wells at a total cost of approximately $28,000 ($1,400 per well). According to Battle River, these re-activations pay out in one week based on current natural gas pricing.

 

Wirelined Wells 2021


The Properties have very reasonable processing fees with third parties and utilize an extensive pipeline network for future tie-ins and transportation.
 


In the Provost area numerous companies have been drilling in the Mannville and Viking including, Karve Energy Inc., Longshore Resources Ltd., Rockeast Energy Corp., Rolling Hills Energy Ltd., Surge Energy Inc., Tamarack Valley Energy Ltd. and West Lake Energy Corp. as shown on the map below.



Production Overview

Current daily production net to Battle River from the Properties is approximately 7.8 MMcf/d of natural gas and 245 barrels of oil and natural gas liquids per day (1,543 boe/d) as outlined below.



Due to the high heat content of the sales gas, Battle River receives a 10% premium to AECO pricing. In March 2021, Battle River received a sales price of $50.00/bbl for its natural gas liquids. The Provost Viking Sand Gas Unit produces 38 barrels of liquids per MMcf of natural gas production and the North Provost Viking Gas Unit produces 53 barrels of liquids per MMcf of natural gas production.
 

Gross Production Group Plot of Battle River's Oil and Natural Gas Wells


 

The Properties are low decline at approximately 5% annually. Battle River over the last several years has received performance based positive technical revisions on its reserves.

Marketing Overview

Battle River has a natural gas liquids contract in place with Gibson Energy Infrastructure Partnership until March 31, 2022 where volumes are trucked from Brownfield – 100/02-02-039-11W4/00, Provost - 100/03-30-037-02W4/00, Castor East - 100/05-03-038-13W4/00 and Provost - 100/08-19-036-05W4/00 to the Gibson Hardisty Terminal. Natural gas volumes are sold into the AECO market.

Power Generation

Battle River has also identified power generation sites at Sullivan Lake (~530 Mcf/d or 2 MW), Kessler (~900 Mcf/d or 3.6MW), North Provost Gas Unit (~1,100 Mcf/d or 4.4 MW) and numerous other in field opportunities ranging from 30-300 Mcf/d (120 kW to 1,200 kW).

LMR Summary

As of April 3, 2021, Battle River’s net deemed asset value for the Properties was ($22.7 million) (deemed assets of $37.1 million and deemed liabilities of $59.9 million), with an LMR ratio of 0.62.

The LMR for each of the Properties as of April 3, 2021 is summarized below.


Summary of LMR by Property

 

The Properties have low-cost abandonment and reclamation. To date, the cost of abandonments done by Battle River on the Properties have been roughly half of the liability amounts assigned by the Alberta Energy Regulator.

The Properties have low-cost reclamations due to minimal disturbance sites, equipment already removed from many sites, minimal liquid production on-site and no significant spills.

Seismic Overview

The Company does not have an interest in any seismic data relating to the Properties.

Reserves Overview

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the Properties contained remaining proved plus probable reserves of 35.6 Bcf of natural gas and 1.2 million barrels of oil and natural gas liquids (7.1 million boe), with an estimated net present value of $14.1 million using forecast pricing at a 10% discount.

 



 

Well List

Click here to download the complete well list in Excel.

SULLIVAN LAKE

Township 34-37, Range 11-16 W4

At Sullivan Lake, Battle River holds high working interests in certain lands and wells with low-decline natural gas production including a 98.034% working interest in the Sullivan Lake Gas Unit No. 1.

Current daily production net to Battle River from Sullivan Lake is approximately 757 Mcf/d of natural gas and two barrels of natural gas liquids per day (128 boe/d).

At Sullivan Lake, the Company receives third party processing revenue of approximately $40,000 per month. This is up from approximately $15,000 per month in 2019. Additionally, third parties have indicated plans for future drilling which could increase future third-party processing revenue. Furthermore, there is approximately 1.5 MMcf/d of stranded third-party natural gas that could be tied-in for additional processing revenue of approximately $500,000 per year.




Sullivan Lake, Alberta
Gross Production Group Plot of Battle River's Natural Gas Wells



 

Sullivan Lake Facilities

The Company has TCPL connected sites at Sullivan Lake with compression and refrigeration. Battle River has working interests in the following facilities at Sullivan Lake.
 


Sullivan Lake Reserves

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the Sullivan Lake property contained remaining proved plus probable reserves of 3.4 Bcf of natural gas and 11,000 barrels of oil and natural gas liquids (572,000 boe), with an estimated net present value of $3.1 million using forecast pricing at a 10% discount.

The values presented herein do not capture the recent increase in third-party processing revenue which Battle River estimates would be an increase of $1.0 million at a 10% discount rate.
 




 

Sullivan Lake LMR

As of April 3, 2021, Battle River’s net deemed asset value for Sullivan Lake was ($2.1 million) (deemed assets of $3.7 million and deemed liabilities of $5.8 million), with an LMR ratio of 0.64.



Sullivan Lake Well List

Click here to download the complete well list in Excel.

PROVOST VIKING SAND GAS UNIT

Township 35-38, Range 2-7 W4

In the Provost Viking Sand Gas Unit area, the Company holds a 100% working interest in the Provost Viking Sand Gas Unit as well as non-unit interests in the Monitor area which are grouped with the Provost Viking Sand Gas Unit as shown on the following map.

Current daily production net to Battle River from the Provost Viking Sand Gas Unit is approximately 5.2 MMcf/d of natural gas and 204 barrels per day of oil and natural gas liquids (1,066 boe/d).



Provost Viking Sand Gas Unit, Alberta
Gross Production Group Plot of Battle River's Viking Natural Gas Wells


 

Provost Viking Sand Gas Unit Facilities

Battle River has working interests in the following facilities at Provost Viking Sand Gas Unit.
 


 

Provost Viking Sand Gas Unit Reserves

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the Provost Viking Sand Gas Unit contained remaining proved plus probable reserves of 24.7 Bcf of natural gas and 959,000 barrels of natural gas liquids (5.1 million boe), with an estimated net present value of $9.2 million using forecast pricing at a 10% discount.




Monitor Reserves

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the Monitor property contained remaining proved plus probable reserves of 2.3 Bcf of natural gas and 65,000 barrels of natural gas liquids (449,000 boe), with an estimated net present value of $1.6 million using forecast pricing at a 10% discount.





 

Provost Viking Sand Gas Unit LMR

As of April 3, 2021, Battle River’s net deemed asset value for the Provost Viking Sand Gas Unit was ($6.3 million) (deemed assets of $21.8 million and deemed liabilities of $28.1 million), with an LMR ratio of 0.78.
 

Monitor LMR

As of April 3, 2021, Battle River’s net deemed asset value for Monitor was $478,875 (deemed assets of $1.8 million and deemed liabilities of $1.3 million), with an LMR ratio of 1.37.
 


Provost Viking Sand Gas Unit Well List
Monitor Well List

Click here to download the complete well list in Excel.

NORTH PROVOST GAS UNIT


Township 37-39, Range 4-7 W4

The Company holds a 100% working interest in the North Provost Gas Unit which produces natural gas from the Viking Formation.

Current daily production net to Battle River from the North Provost Gas Unit is approximately 600 Mcf/d of natural gas and 31 barrels of natural gas liquids per day (131 boe/d).

Natural gas liquids are currently being delivered to Karve. Battle River has identified an opportunity to install liquid recovery at the 05-18-038-05W4 compressor site.

 


North Provost Gas Unit, Alberta
Gross Production Group Plot of Battle River's Natural Gas Wells


North Provost Gas Unit Facilities

Battle River has working interests in the following facilities at North Provost Gas Unit.
 


North Provost Gas Unit Reserves
 

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the North Provost Gas Unit contained remaining proved plus probable reserves of 3.6 Bcf of natural gas and 166,000 barrels of natural gas liquids (771,000 boe), with an estimated net present value of $937,000 using forecast pricing at a 10% discount.
 



North Provost Gas Unit LMR

As of April 3, 2021, Battle River’s net deemed asset value for the North Provost Gas Unit was ($2.0 million) (deemed assets of $3.9 million and deemed liabilities of $5.9 million), with an LMR ratio of 0.66.
 


North Provost Gas Unit Well List

Click here to download the complete well list in Excel.

KESSLER

Township 38-41, Range 6-10 W4

At Kessler, Battle River holds high working interests in several wells and a 78.7261% working interest in the Kessler Viking Gas Unit and a 96.92308% working interest in the Choice Viking Gas Unit No. 1.

Current daily production net to Battle River from Kessler is approximately 813 Mcf/d of natural gas and four barrels of natural gas liquids per day (140 boe/d).

 


Kessler, Alberta
Gross Production Group Plot of Battle River's Natural Gas Wells


Kessler Facilities

The Company has TCPL connected sites at Kessler with compression and liquids recovery. Battle River has working interests in the following facilities at Kessler.

 


Kessler Reserves

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the Kessler property contained remaining proved plus probable reserves of 467 MMcf of natural gas and 3,000 barrels of natural gas liquids (80,000 boe), with an estimated net present value of ($406,000) using forecast pricing at a 10% discount.

 



Kessler LMR

As of April 3, 2021, Battle River’s net deemed asset value for Kessler was ($10.9 million) (deemed assets of $4.0 million and deemed liabilities of $14.9 million), with an LMR ratio of 0.27.

 


Kessler Well List

Click here to download the complete well list in Excel.

BATTLE RIVER GAS

Township 36-41, Range 10-16 W4

The Company has high working interests in several wells producing natural gas mainly from the Mannville Group in the Battle River Gas area.

Current daily production net to the Company from the Battle River Gas area is approximately 442 Mcf/d of natural gas and four barrels of natural gas liquids per day (78 boe/d).
 


Battle River Gas, Alberta
Gross Production Group Plot of Battle River's Natural Gas Wells


Battle River Gas Facilities

Battle River has working interests in the following facilities at Battle River Gas.
 

Battle River Gas Reserves

InSite Petroleum Consultants Ltd. (“InSite”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “InSite Report”). The InSite Report is effective December 31, 2019 using Sproule Associates Limited’s December 31, 2019 forecast pricing.

InSite estimates that, as of December 31, 2019, the Battle River Gas property contained remaining proved plus probable reserves of 1.1 Bcf of natural gas and 12,000 barrels of natural gas liquids (199,000 boe), with an estimated net present value of ($254,000) using forecast pricing at a 10% discount.
 



Battle River Gas LMR

As of April 3, 2021, Battle River’s net deemed asset value for Battle River Gas was ($1.9 million) (deemed assets of $1.9 million and deemed liabilities of $3.9 million), with an LMR ratio of 0.50.
 


Battle River Gas Well List

Click here to download the complete well list in Excel.

PROCESS & TIMELINE

Sayer Energy Advisors is accepting offers relating to the process until 12:00 pm on Wednesday June 30, 2021.
 

Sayer Energy Advisors does not conduct a "second-round" bidding process; the intention is to attempt to conclude a
transaction with the party submitting the most acceptable proposal at the conclusion of the process.

Sayer Energy Advisors is accepting offers from interested parties
until noon on Wednesday June 30, 2021.


NOTE REGARDING A SAYER PROCESS

On each and every offering brochure generated by Sayer, you will note the sentence “Sayer Energy Advisors does not conduct a “second-round” bidding process; the intention is to attempt to conclude a sale of the Property with the party submitting the most acceptable proposal at the conclusion of the process.”  What this means is that Sayer will not go back to multiple parties at the same time after bids are received, asking them all for a second bid.  We determine which party submitted the most acceptable proposal and then we attempt to negotiate acceptable terms with that party in a “one-off” situation.

If the process involves a cash sale of a property or company and the party which submitted the most acceptable proposal has met our client’s threshold value, that offer will be accepted.  If this proposal does not meet our client’s threshold value, then we will advise that party that the offer is not quite what our client was expecting, and we will ask them to increase the offer.  If that offer is not acceptable to our client, we will then move down to the party which submitted the next most acceptable proposal and we will then work with that party to attempt to meet our client’s threshold value.

In the extremely rare circumstance where two or more parties submit virtually identical proposals, we will contact all  parties, we will advise them of this situation and we will ask them to submit a revised proposal.  Once these are received, we will work with the party which has submitted the most acceptable proposal.

CONFIDENTIALITY AGREEMENT

Parties wishing to receive access to the confidential information with detailed technical information relating to this opportunity should execute the Confidentiality Agreement and return one copy to Sayer Energy Advisors by courier, email (brye@sayeradvisors.com) or fax (403.266.4467).  

Included in the confidential information is the following: summary land information, the InSite Report, LMR information, most recent net operations summary, detailed facilities information and other relevant technical information.  

Download Confidentiality Agreement 

To receive further information on the Properties please contact Ben Rye, Tom Pavic or Grazina Palmer at 403.266.6133.

Top