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Battle River Energy Ltd.

Property Divestiture
Bid Deadline: November 18, 2021 12:00 PM
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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 oil and natural gas interests located in the Provost area of Alberta, specifically the Consort, Dalmer, Hansman Lake, Kirkpatrick Lake and Veteran areas (the “Properties”). Battle River is selling the Properties in order to focus its operations on its core assets.
 
Average daily production net to Battle River from the Properties for July 2021 was approximately 229 barrels of oil and natural gas liquids per day and 97 Mcf/d of natural gas (246 boe/d).
 
Net operating income from the Properties for July 2021 was approximately $77,000 or $925,000 on an annualized basis.
 
The Company has identified an additional 337 bbl/d of oil production which could be added through re-activations and repairs for a total cost of $1,540,000. Battle River has also identified 37 horizontal upside drilling locations on the Properties. The Consort, Hansman Lake and Kirkpatrick Lake properties are also under waterflood.

 

Overview Map Showing the Location of the Divestiture Properties


Provost Area

In the Provost area of Alberta, Battle River has interests in the Consort, Dalmer, Hansman Lake, Kirkpatrick Lake and Veteran areas. The following map shows the geographical breakdown of the Properties.
 


Production Overview
 
Average daily production net to Battle River from the Properties for July 2021 was approximately 229 barrels of oil and natural gas liquids per day and 97 Mcf/d of natural gas (246 boe/d) as outlined below.
 
Net operating income from the Properties for July 2021 was approximately $77,000 or $925,000 on an annualized basis.

 


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


LMR Summary

As of July 3, 2021, Battle River’s net deemed asset value for the Properties was ($7.7 million) (deemed assets of $9.7 million and deemed liabilities of $17.4 million), with an LMR ratio of 0.56.
 
The LMR for each of the Properties as of July 3, 2021 is summarized below.

 

Summary of LMR by Property


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 1.2 million barrels of oil and natural gas liquids and 129 MMcf of natural gas (1.2 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.

CONSORT

Township 35-39, Range 4-7 W4

At Consort, Battle River holds a 100% working interest in certain lands and wells with medium to light, oil production as well as a 21.78% working interest in the Provost Cummings “Y” Unit No. 1 operated by Prairie Provident Resources Canada Ltd. Oil production at Consort is from the Ellerslie, Dina and Cummings formations. The Consort property is located just outside the town of Consort and is easily accessible.
 
Average daily production net to Battle River from the operated interests at Consort for July 2021 was approximately 45 barrels of oil per day. Current daily production net to the Company from the non-operated interests at Consort was also approximately 45 barrels of oil per day.
 
Natural gas produced from Consort is currently flared. This presents an opportunity for potential power generation and reduction of operating expenses.
 
The Company has identified an additional 55 bbl/d of oil production which could be added through re-activations and repairs. Battle River has also identified eight horizontal upside drilling locations at Consort.
 
The Mannville oil pool at Consort is currently under waterflood. Oil density is approximately 889 kg/m3 with 1.53% sulphur.

 


Provost Cummings "Y" Unit No. 1

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


Consort Oil Re-activations
 
The Company has identified several opportunities to re-activate up to 55 bbl/d of oil production at Consort as detailed in the following chart.

 


Consort Facilities
 
Battle River has 100% working interest in the following facility at Consort:
 
Oil battery at 12-21-035-06W4

  • 2 x 1,000 bbl water tanks
  • 2 x 1,000 bbl emulsion and desand tanks
  • 2 x 1,000 bbl oil sales tank
  • Free water knockout and treater
  • 1 x 200 hp water injection pump

Battle River believes there is additional opportunity to generate processing income from third party volumes.
 
Oil from Consort is trucked to sales. Consort is currently Battle River’s main hub for trucked water from the Properties.
 
Consort 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 Consort property contained remaining proved plus probable reserves of 204,000 barrels of oil, with an estimated net present value of $2.8 million using forecast pricing at a 10% discount.

 


Consort LMR
 
As of July 3, 2021, Battle River’s net deemed asset value for Consort was ($469,796) (deemed assets of $1.7 million and deemed liabilities of $2.1 million), with an LMR ratio of 0.78.

 


Consort Well List


Click here to download the complete well list in Excel.

HANSMAN LAKE

Township 40-41, Range 3-5 W4

At Hansman Lake, Battle River holds primarily 100% working interests in certain lands and wells with oil production from the Ellerslie, Cummings, Glauconitic Sandstone and Lloydminster formations of the Mannville Group. The Hansman Lake property is located just outside the town of Provost and is easily accessible.

Average daily production net to Battle River from Hansman Lake for July 2021 was approximately 78 barrels of oil per day and 46 Mcf/d of natural gas (86 boe/d).  Natural gas produced from Hansman Lake is conserved and sent to Repsol Canada Energy Partnership for processing and compression.

The Company has identified an additional 117 bbl/d of oil production which could be added through re-activations and repairs. Battle River has also identified nine horizontal upside drilling locations at Hansman Lake.

The Mannville oil pool at Hansman Lake is currently under waterflood. Oil density is approximately 926 kg/m3 with 2.18% sulphur.

 



Hansman Lake, Alberta
Gross Production Group Plot of Battle River's Oil & Natural Gas Wells


Hansman Lake Oil Re-activations
 
The Company has identified several opportunities to re-activate up to 117 bbl/d of oil production at Hansman Lake as detailed in the following chart.

 


Hansman Lake Facilities
 
Battle River has 100% working interest in the following facility at Hansman Lake:
 
Oil battery at 01-08-040-03W4

  • 2 x 2,000 bbl water tanks
  • 1 x 2,000 bbl emulsion tank
  • 1 x 1,000 bbl desand emulsion tank
  • 1 x 1,000 bbl prod tank
  • 1 x 1,000 bbl desand tank
  • Free water knockout and treater
  • 3 x 300 hp water injection pumps (National 300Q-5L’s)
Hansman Lake is pipeline connected to the Bow River North system (Gibson Energy Inc.) to Hardisty. In the summer of 2021 Battle River took over operatorship of the saltwater battery at 11-26-44-04W4 where it holds a 75% working interest. The Company recently installed a tank treating system and oil is now hauled directly to sales at Gibson Hardisty.
 
Natural gas is conserved and sent to Repsol Canada Energy Partnership for processing and compression.
 
Hansman 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 Hansman Lake property contained remaining proved plus probable reserves of 529,000 barrels of oil, with an estimated net present value of $4.9 million using forecast pricing at a 10% discount.


Hansman Lake LMR
 
As of July 3, 2021, Battle River’s net deemed asset value for Hansman Lake was ($355,041) (deemed assets of $3.9 million and deemed liabilities of $4.2 million), with an LMR ratio of 0.92.

 


Hansman Lake Well List

Click here to download the complete well list in Excel.

KIRKPATRICK LAKE

Township 30-34, Range 6-11 W4

At Kirkpatrick Lake, Battle River holds a 100% working interest in certain lands and wells with light oil production from the Ellerslie and Dina formations of the Mannville Group.
 
Average daily production net to Battle River from Kirkpatrick Lake for July 2021 was approximately 61 barrels of oil and 51 Mcf/d of natural gas (70 boe/d).
 
Natural gas produced from the Kirkpatrick Lake battery is currently flared, which presents an opportunity for potential power generation and reduction of operating expenses.
 
The Company has identified an additional 60 bbl/d of oil production which could be added through re-activations and repairs. Battle River has also identified eight horizontal upside drilling locations at Kirkpatrick Lake.
 
The Mannville oil pool at Kirkpatrick Lake is currently under waterflood. Oil density is approximately 866 kg/m3 with 1.25% sulphur.

 



Kirkpatrick Lake, Alberta
Gross Production Group Plot of Battle River's Oil & Natural Gas Wells


Kirkpatrick Lake Oil Re-activations
 
The Company has identified several opportunities to re-activate up to 60 bbl/d of oil production at Kirkpatrick Lake as detailed in the following chart.

 


Kirkpatrick Lake Facilities
 
Battle River has 100% working interest in the following facility at Kirkpatrick Lake:
 
Oil battery at 01-15-034-09W4

  • 2 x 1,000 bbl water tanks
  • 1 x 1,000 bbl emulsion tank
  • 2 x 1,000 bbl oil sales tanks
  • Free water knockout and treater
  • 3 x 300 hp water injection pumps (1 x National 300Q and 1 x Union SWD QD200)

 
Battle River believes there is additional opportunity to generate processing income from third party volumes.
 
Kirkpatrick Lake is pipeline connected to the Central Alberta Light Sour System (Inter Pipeline Ltd.) to Edmonton via Throne and Stettler. IPL constructed the connector pipeline from Throne to Stettler in 2020. This pipeline connection provides for strong differentials on sales oil and good apportionment protection.
 
Kirkpatrick Lake is currently Battle River’s main trucking hub for oil production from the Properties.
 
Kirkpatrick 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 Kirkpatrick Lake property contained remaining proved plus probable reserves of 334,000 barrels of oil, with an estimated net present value of $4.5 million using forecast pricing at a 10% discount.

 


Kirkpatrick Lake LMR
 
As of July 3, 2021, Battle River’s net deemed asset value for Kirkpatrick Lake was ($2.0 million) (deemed assets of $3.0 million and deemed liabilities of $5.1 million), with an LMR ratio of 0.60.

 


Kirkpatrick Lake Well List


Click here to download the complete well list in Excel.

DALMER

Township 39, Range 4 W4

At Dalmer, Battle River holds primarily 100% working interests in certain lands and wells with oil production from the Ellerslie, Cummings, Glauconitic Sandstone and Lloydminster formations of the Mannville Group. The Dalmer property is located just outside the town of Provost and is easily accessible.
 
The Dalmer property was shut-in during the second quarter of 2020 due to weak commodity pricing. Battle River believes that re-activating the field now would be economic with the recent increase in commodity prices.
 
Natural gas produced from Dalmer was flared. This presents an opportunity for potential power generation and reduction of operating expenses.
 
Battle River also receives minor oil treating income from the Dalmer property.
 
The Company has identified 52 bbl/d of oil production which could be added through re-activations and repairs. Battle River has also identified eight horizontal upside drilling locations at Dalmer.

 


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


Dalmer Oil Re-activations
 
The Company has identified several opportunities to re-activate up to 52 bbl/d of oil production at Dalmer as detailed in the following chart.

 


Dalmer Facilities
 
Battle River has 100% working interest in the following facility at Dalmer:
 
Oil battery at 05-36-039-04W4

  • 2 x 2,500 bbl water tanks
  • 1 x 1,600 bbl oil production tank
  • 1 x 1,000 bbl oil sales tank
  • 1 x 1,600 bbl condensate tank
  • 1 x 2,000 bbl oil emulsion tank
  • 1 x Free water knockout and 1 treater
  • 2 x 200 hp water injection pumps
    • 25,000 bbl/day injection capacity; opportunity for additional third-party disposal
  • Electric 200 hp gas compressor
  • Condensate blending skid

Dalmer Reseves
 
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 Dalmer property contained remaining proved plus probable reserves of 56,000 barrels of oil, with an estimated net present value of $467,000 using forecast pricing at a 10% discount.

 


Dalmer LMR
 
As of July 3, 2021, Battle River’s net deemed asset value for Dalmer was ($1.1 million) (deemed assets of $38,748 and deemed liabilities of $1.1 million), with an LMR ratio of 0.03.

 


Dalmer Well List

Click here to download the complete well list in Excel.

VETERAN

Township 35-37, Range 7-9 W4

At Veteran, the Company has high working interests ranging from 44%-100% in several light oil and natural gas wells in the Dina and Cummings formations of the Mannville Group.
 
The Veteran property was shut-in during the first quarter of 2021.
 
The Company has identified an additional 53 bbl/d of oil production which could be added through re-activations and repairs. Battle River has also identified four horizontal upside drilling locations at Veteran.
 
Oil density at Veteran is approximately 879 kg/m3 with 1.58% sulphur.

 



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


Veteran Oil Re-activations
 
The Company has identified several opportunities to re-activate up to 53 bbl/d of oil production at Veteran as detailed in the following chart.

 


Veteran Facilities
 
Battle River has a 100% working interest in the following facility at Veteran:
 
Oil battery at 09-14-037-08W4

  • 2 x 1,000 bbl water tanks
  • 2 x 1,000 bbl emulsion tanks
  • 2 x 750 bbl oil sales tanks
  • 1 x Free water knockout and 1 treater
  • 2 x 100 hp water injection pumps

Veteran 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 Veteran property contained remaining proved plus probable reserves of 93,000 barrels of natural gas liquids and 129 MMcf of natural gas (114,000 boe), with an estimated net present value of $1.5 million using forecast pricing at a 10% discount.

 


Veteran LMR
 
As of April 3, 2021, Battle River’s net deemed asset value for Veteran was ($3.8 million) (deemed assets of $1.1 million and deemed liabilities of $4.8 million), with an LMR ratio of 0.22.

 


Veteran 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 Thursday November 18, 2021.
 

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

Sayer Energy Advisors is accepting offers from interested parties until
noon on Thursday November 18, 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 binder 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 binder 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.
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