Offering Details
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Under Review / Superb Operating Company Ltd.
Superb Operating Company Ltd.
Property DivestitureBid Deadline: June 27, 2024
12:00 PM
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OVERVIEW
Superb Operating Company Ltd. (“Superb” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain of its non-core oil interests located in the Superb area of Saskatchewan (the “Property”). Superb’s parent company is an alternative energy producer and is divesting the Property to focus on its hydrogen production assets.
The Company believes the Property would support 15 additional multi-lateral horizontal development wells with 70 million barrels of OOIP in the Waseca reservoir. Estimated capital costs to drill, complete and equip are $1.6 million per well.
Superb also believes the Property could be developed with 20-30 vertical CHOPS wells at 40-acre spacing.
Current production net to the Company from the Property is approximately 27 barrels of heavy oil per day.
Operating income net to the Company from the Property for the twelve months ended February 29, 2024 was approximately ($380,000) due to several workovers.
As of April 28, 2024, the Property had a deemed net asset value of $9,910 (deemed assets of $306,010 and deemed liabilities of $296,100), with an LMR ratio of 1.03.
The Company believes the Property would support 15 additional multi-lateral horizontal development wells with 70 million barrels of OOIP in the Waseca reservoir. Estimated capital costs to drill, complete and equip are $1.6 million per well.
Superb also believes the Property could be developed with 20-30 vertical CHOPS wells at 40-acre spacing.
Current production net to the Company from the Property is approximately 27 barrels of heavy oil per day.
Operating income net to the Company from the Property for the twelve months ended February 29, 2024 was approximately ($380,000) due to several workovers.
As of April 28, 2024, the Property had a deemed net asset value of $9,910 (deemed assets of $306,010 and deemed liabilities of $296,100), with an LMR ratio of 1.03.
Overview Map Showing the Location of the Divestiture Property
SUPERB
Township 32-33, Range 23-24 W3
In the Superb area, the Company has working interests in approximately four sections of land. The Property is located near Kerrobert, Saskatchewan. The Property is separated into the North Block and South Block.
In the North Block, the Company holds a 100% working interest in 1.5 sections of land. Production is from the two oil wells Superb Kerrobert 102/10-12-033-24W3/0 and Superb Kerrobert 191/08-12-033-24W3/0.
Current production from the 102/10-12-033-24W3/0 well is approximately 23 barrels of heavy oil per day.
In the South Block, Superb holds a 100% working interest in approximately three sections of land as well as a 30% working interest in the northwest quarter of Section 29-032-23W3, on which there is one five-leg multilateral horizontal well operated by Sonoro Energy Ltd. Current production net to Superb from the well Sonoro HZ 102/14-29-032-23W3/0 is approximately 4 bbl/d of oil.
In the Superb area, the Company has working interests in approximately four sections of land. The Property is located near Kerrobert, Saskatchewan. The Property is separated into the North Block and South Block.
In the North Block, the Company holds a 100% working interest in 1.5 sections of land. Production is from the two oil wells Superb Kerrobert 102/10-12-033-24W3/0 and Superb Kerrobert 191/08-12-033-24W3/0.
Current production from the 102/10-12-033-24W3/0 well is approximately 23 barrels of heavy oil per day.
In the South Block, Superb holds a 100% working interest in approximately three sections of land as well as a 30% working interest in the northwest quarter of Section 29-032-23W3, on which there is one five-leg multilateral horizontal well operated by Sonoro Energy Ltd. Current production net to Superb from the well Sonoro HZ 102/14-29-032-23W3/0 is approximately 4 bbl/d of oil.
Superb, Saskatchewan
Gross Production Group Plot
Waseca Formation
At Superb, the target reservoir is a Waseca heavy oil channel sand which contains 11-16.5⁰ API gravity oil.
The Property is adjacent to, and in the same Waseca channel trend, as the Company’s core property at Kerrobert. Superb’s Kerrobert property is the focus of the Company and was acquired in 2017 for the commercialization of large-scale clear hydrogen production. The development of Superb’s core Waseca pool at Kerrobert serves as an analogue to the development potential of the Waseca channel at Superb.
At Superb, the target reservoir is a Waseca heavy oil channel sand which contains 11-16.5⁰ API gravity oil.
The Property is adjacent to, and in the same Waseca channel trend, as the Company’s core property at Kerrobert. Superb’s Kerrobert property is the focus of the Company and was acquired in 2017 for the commercialization of large-scale clear hydrogen production. The development of Superb’s core Waseca pool at Kerrobert serves as an analogue to the development potential of the Waseca channel at Superb.
The Company believes the Property would support 15 additional multi-lateral horizontal development wells with 70 million barrels of OOIP in the Waseca reservoir. Estimated capital costs to drill, complete and equip are $1.6 million per well.
Superb also believes the Property could be developed with 20-30 vertical CHOPS wells at 40-acre spacing.
There are proven historical horizontal wells offsetting the Property on the same geological trend and the Property is on trend with established steam projects and presents an opportunity to drill SAGD well pairs for steam development.
The following cross section shows the presence of the Waseca channel reservoir on the Company’s lands in the South Block.
Superb also believes the Property could be developed with 20-30 vertical CHOPS wells at 40-acre spacing.
There are proven historical horizontal wells offsetting the Property on the same geological trend and the Property is on trend with established steam projects and presents an opportunity to drill SAGD well pairs for steam development.
The following cross section shows the presence of the Waseca channel reservoir on the Company’s lands in the South Block.
South Block
Structural Cross Section
Structural Cross Section
The Company has an eight well horizontal development plan for the North Block and has identified seven horizontal locations in the South Block.
Seismic Overview
The Company does not have ownership in any 3D seismic data relating to the Property but there is significant seismic available in the area.
Seismic Overview
The Company does not have ownership in any 3D seismic data relating to the Property but there is significant seismic available in the area.
North Block
Seismic Plat
South Block
Seismic Plat
Seismic Plat
South Block
Seismic Plat
Superb Facilities
The Company does not have ownership in any facilities at Superb. Details on the Company’s equipment will be made available in the data room to parties that execute a confidentiality agreement.
Superb Marketing
Oil from Superb is trucked to the Inter Pipeline Ltd. clean heavy oil terminal at 02-34-033-22W3 and sold to Inter Pipeline on a 30-day contract.
Superb Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the North Block (the “GLJ Report”). The GLJ Report is effective December 31, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Limited and Sproule Associates Limited’s April 1, 2024 forecast pricing (“3C Average April 1, 2024”).
GLJ estimated that, as of December 31, 2023, the North Block contained remaining proved plus probable reserves of 945,000 barrels of heavy oil (945,000 boe), with an estimated net present value of $14.0 million using forecast pricing at a 10% discount.
The Company does not have ownership in any facilities at Superb. Details on the Company’s equipment will be made available in the data room to parties that execute a confidentiality agreement.
Superb Marketing
Oil from Superb is trucked to the Inter Pipeline Ltd. clean heavy oil terminal at 02-34-033-22W3 and sold to Inter Pipeline on a 30-day contract.
Superb Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the North Block (the “GLJ Report”). The GLJ Report is effective December 31, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Limited and Sproule Associates Limited’s April 1, 2024 forecast pricing (“3C Average April 1, 2024”).
GLJ estimated that, as of December 31, 2023, the North Block contained remaining proved plus probable reserves of 945,000 barrels of heavy oil (945,000 boe), with an estimated net present value of $14.0 million using forecast pricing at a 10% discount.
Superb prepared an internal reserves evaluation of the South Block (the “Internal Report”). The Internal Report is effective December 31, 2023 using an average of GLJ Ltd., McDaniel & Associates Consultants Limited and Sproule Associates Limited’s January 1, 2024 forecast pricing (“3C Average”).
Superb estimated that, as of December 31, 2023, the South Block contained remaining proved plus probable reserves of 1.1 million barrels of heavy oil (1.1 million boe), with an estimated net present value of $24.3 million using forecast pricing at a 10% discount.
Superb estimated that, as of December 31, 2023, the South Block contained remaining proved plus probable reserves of 1.1 million barrels of heavy oil (1.1 million boe), with an estimated net present value of $24.3 million using forecast pricing at a 10% discount.
Superb LMR as of April 28, 2024
As of April 28, 2024, the Property had a deemed net asset value of $9,910 (deemed assets of $306,010 and deemed liabilities of $296,100), with an LMR ratio of 1.03.
As of April 28, 2024, the Property had a deemed net asset value of $9,910 (deemed assets of $306,010 and deemed liabilities of $296,100), with an LMR ratio of 1.03.
Superb Well List
Click here to download the complete well list in Excel.
Click here to download the complete well list in Excel.
PROCESS & TIMELINE
Sayer Energy Advisors is accepting cash offers to acquire the Property until 12:00 pm on Thursday June 27, 2024.
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.
transaction with the party submitting the most acceptable proposal at the conclusion of the process.
Sayer Energy Advisors is accepting cash offers from interested parties until
noon on Thursday June 27, 2024.
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.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.
CONFIDENTIALITY AGREEMENT
Parties wishing to receive access to the confidential information with detailed information relating to this opportunity should execute the Confidentiality Agreement and return one copy to Sayer Energy Advisors by courier, mail (brye@sayeradvisors.com) or fax (403.266.4467).
Included in the confidential information is the following: summary land information, the GLJ Report, the Internal Report, LMR information, most recent net operations summary and other relevant technical information.
Download Confidentiality Agreement
To receive further information on the Property please contact Ben Rye, Tom Pavic or Sydney Birkett at 403.266.6133.