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Under Review   /   PricewaterhouseCoopers Inc., LIT - SanLing Energy Ltd.



PricewaterhouseCoopers Inc., LIT - SanLing Energy Ltd.

Receivership Sale
Bid Deadline: June 24, 2021 12:00 PM
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OVERVIEW

PRICEWATERHOUSECOOPERS INC., LIT RECEIVED COURT APPROVAL ON SEPTEMBER 24, 2021, OCTOBER 27, 2021 AND NOVEMBER 22, 2021 FOR THE SALE OF CERTAIN OF SANLING'S OIL AND NATURAL GAS INTERESTS.  PLEASE REFER TO THE LINK BELOW FOR A LIST OF THE REMAINING SANLING WELLS WHICH ARE STILL AVAILABLE.

Updated Well List

Sayer Energy Advisors has been engaged to assist PricewaterhouseCoopers Inc., LIT (“PwC”) in its capacity as Court-appointed receiver (the “Receiver”) of SanLing Energy Ltd. (“SanLing” or the “Company”) with the sale of all of the Company’s oil and natural gas properties located in Alberta and British Columbia (the “Properties”).
 
On April 23, 2021, the Receiver was appointed by the Court pursuant to an application made by the Orphan Well Association (“OWA”) and the BC Oil and Gas Commission (“BCOGC”) and intends to divest the Properties, in whole or in part.
 
The Properties consist of both operated and non-operated interests which are located throughout Alberta and British Columbia. The Properties are separated into the following geographical packages for this offering: Southern Alberta Oil, Southern Alberta Gas, Matziwin, Drumheller, Provost, Pembina, North Oil, Peace River Arch, Rainbow Oil, and Rainbow Gas in Alberta, as well as Noel, Lagarde and Northeastern BC in British Columbia.
 
The package outlines shown on the maps within are based on reserve areas and additional wells may be found in the well list and lease operating statements for each area. Please note that in cases where only one well event is shown for a well with multiple legs, multiple UWIs or multiple well events under one license, all wells with the same license number are available.
 
On March 31, 2021, SanLing ceased its operations in Alberta and British Columbia.
 
Average production net to SanLing from the Properties in 2020 was 4,368 boe/d, consisting of 20.2 MMcf/d of natural gas and 1,000 barrels of oil and natural gas liquids per day.
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.

 

Overview Map Showing the Location of SanLing’s Properties


Production Overview

Average production net to SanLing from the Properties in 2020 was 4,368 boe/d, consisting of 20.2 MMcf/d of natural gas and 1,000 barrels of oil and natural gas liquids per day.
 


Gross Production Group Plot of SanLing's Wells


The decline shown in the group production plot since 2015 reflects no new drilling activity. Only well repairs were completed. The drop in production in 2020 was due to low commodity prices which triggered SanLing to shut in low-return operated facilities.

LMR Summary

Alberta 

As of March 6, 2021, SanLing’s net deemed asset value in Alberta was ($69.3 million) (deemed assets of $110.0 million and deemed liabilities of $179.3 million), with an LMR ratio of 0.61.



SanLing has $281,834 on deposit with the Alberta Energy Regulator (“AER”). The deposit held by the AER is not accounted for in the LMR numbers above. 
 
British Columbia
 
As of February 23, 2021, SanLing’s net deemed asset value in British Columbia was ($4.4 million) (deemed assets of $7.0 million and deemed liabilities of $11.4 million), with an LMR ratio of 0.62.



SanLing has $1,618,775 on deposit with the BCOGC. The deposit held by the BCOGC is not accounted for in the LMR numbers above.

Facilities Overview

SanLing holds various working interests in facilities associated with the Properties. Details on SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.

Seismic

Details on the Company’s seismic ownership are available in the virtual data room for parties that execute a confidentiality agreement.

Reserves Overview

GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”).

 
The evaluation was initiated in May 2020 and completed by June 2020. Estimates of reserves and projections of production were generally prepared using well information and production data available from public sources to approximately December 31, 2019. The Company provided land, accounting data and other technical information not available in the public domain to approximately December 31, 2019. In certain instances, the Company also provided recent engineering, geological and other information up to December 31, 2019. The Company has confirmed that, to the best of its knowledge, all information provided to GLJ is correct and complete as of the effective date.
 
The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Properties contained remaining proved plus probable reserves of 8.0 million barrels of oil and natural gas liquids and 121.9 Bcf of natural gas (28.3 million boe), with an estimated net present value of approximately $99.8 million using forecast pricing at a 10% discount.

 


Well List

Click here to download the complete well list in Excel.

ALBERTA

The Properties are separated into the following geographical packages for this offering: Southern Alberta OilSouthern Alberta Gas, Matziwin, Drumheller, Provost, Pembina, North Oil, Peace River Arch, Rainbow Oil, and Rainbow Gas in Alberta.

Click here for more information on the individual packages.

Southern Alberta Oil Package

Township 1-17, Range 3-22 W4

In the Southern Alberta Oil Package, SanLing has various working interests including a 62.23% working interest in the Retlaw Glauconitic Unit No.1. SanLing also holds several other unit interests in the Southern Alberta Oil Package including a 100% working interest in the Badger Glauconitic Unit No.1, Retlaw Mannville V3V Pool Unit No. 1, Retlaw Unit No. 1, Retlaw Upper Mannville V Pool Unit and the Enchant Glauconite Agreement No.2 and No.3.

Average production net to SanLing from the Southern Alberta Oil Package for 2020 was approximately 532 barrels of oil and natural gas liquids per day and 4.0 MMcf/d of natural gas (1,198 boe/d).

 



Southern Alberta Oil
Gross Production Group Plot of SanLing's Wells


In the Southern Alberta Oil area, SanLing has an interest in several operated oil pools that are currently under waterflood that provide a mature, low decline production base including the Upper Mannville NNN and Mannville BBB pools. The pool outlines are shown on the following map.
 


At Retlaw, the Company believes there is a significant amount of horizontal drilling upside in the Mannville Lithic Glauconite.
 


At Retlaw, SanLing has identified potential in recompleting the Taber Sand (Lower Mannville) in the well 00/15-32-012-17W4/0 with a proposed perforation interval between 1057 – 1058 metres as shown on the following log.
 

SLE Retlaw 00/15-32-012-17W4/0
Lower Mannville Type Log

The Company has also identified a potential horizontal drilling location in the Glauconitic Channels at Retlaw at 100/16-08-013-18W4.
 
Southern Alberta Oil Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Southern Alberta Oil Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Southern Alberta Oil Package contained remaining proved plus probable reserves of 3.6 million barrels of oil and natural gas liquids and 8.8 Bcf of natural gas (5.1 million boe), with an estimated net present value of approximately $42.6 million using forecast pricing at a 10% discount.

 



Southern Alberta Oil LMR
 
As of March 6, 2021, SanLing’s deemed net asset value for the Southern Alberta Oil Package was ($34.3 million) (deemed assets of $23.9 million and deemed liabilities of $58.2 million), with an LMR ratio of 0.41
.
 

Southern Alberta Oil Well List

Click here to download the complete well list in Excel.

Southern Alberta Gas Package

Township 1-27, Range 1 W4 – 3 W5

In the Southern Alberta Gas Package, SanLing has various operated and non-operated working interests.
 
Average production net to SanLing from the Southern Alberta Gas Package for 2020 was approximately 592 Mcf/d of natural gas and 36 barrels of oil and natural gas liquids per day (134 boe/d).

 



Southern Alberta Gas
Gross Production Group Plot of SanLing's Wells

Southern Alberta Gas Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Southern Alberta Gas Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Southern Alberta Gas Package contained remaining proved plus probable reserves of 1.0 Bcf of natural gas and 421,000 barrels of oil and natural gas liquids (594,000 boe), with an estimated net present value of approximately $6.0 million using forecast pricing at a 10% discount.

 


Southern Alberta Gas LMR
 
As of March 6, 2021, SanLing’s deemed net asset value for the Southern Alberta Gas Package was ($12.6 million) (deemed assets of $19.3 million and deemed liabilities of $31.9 million), with an LMR ratio of 0.61.

 

Southern Alberta Gas Well List

Click here to download the complete well list in Excel.

Matziwin Package

Township 22-27, Range 10-14 W4

At Matziwin, SanLing holds various working interests including several SanLing operated Pekisko and Glauconitic oil wells.
 
Average production net to SanLing from the Matziwin Package for 2020 was approximately 360 Mcf/d of natural gas and 64 barrels of oil per day (124 boe/d).

 



Matziwin, Alberta
Gross Production Group Plot of SanLing's Wells


At Matziwin, the Company believes there is missed pay in the Glauconitic Sandstone Formation as well as potential for 14 Glauconitic Shoreface horizontal locations.

SLE 102 Hz Cess 02/04-21-023-13W4/0
Glauconitic Sandstone Well Path


Offsetting industry activity has significantly de-risked SanLing’s land position and Glauconitic Shoreface and Upper Mannville channel trends are present on SanLing’s lands. Most prospective acreage at Matziwin is held indefinitely. The Company also has proprietary seismic coverage over a bulk of lands in the focus area.
 
The following cross section shows the Glauconitic channel versus Glauconitic shoreface.

 


At Matziwin, the Company believes there is potential for 14 horizontal locations in the Pekisko Formation. The Pekisko Formation is a fossiliferous calcite reservoir with thickness of up to 20 metres. The porosity of the limestone ranges from 2% - 9% and resistivity of more than 100 Ohms. Permeability from core is between .001 – 20 mD (K Max).
 

SLE Matz 00/14-12-023-14W4/0
Pekisko Formation Well Path


SanLing also believes there is potential for a waterflood at Matziwin, as Journey Energy Inc.’s interests to the north are currently under waterflood.
 

Matziwin Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Matziwin Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Matziwin Package contained remaining proved plus probable reserves of 759,000 barrels of oil and natural gas liquids and 1.1 Bcf of natural gas (949,000 boe), with an estimated net present value of approximately $7.8 million using forecast pricing at a 10% discount.

 


 
Matziwin LMR
 
As of March 6, 2021, SanLing’s deemed net asset value for the Matziwin Package was ($1.9 million) (deemed assets of $3.3 million and deemed liabilities of $5.2 million), with an LMR ratio of 0.63.

 

Matziwin Well List

Click here to download the complete well list in Excel.

Drumheller Package

Township 27-31, Range 18-21 W4

At Drumheller, SanLing holds various operated and non-operated working interests with a low-decline production base primarily from the Mannville, Viking and Nisku formations.
 
Average production net to SanLing from the Drumheller Package for 2020 was approximately 816 Mcf/d of natural gas and 16 barrels of oil and natural gas liquids per day (151 boe/d).

 



Drumheller, Alberta
Gross Production Group Plot of SanLing's Wells


At Drumheller, the Belly River Formation is a medium to fine-grained sandstone and siltstone with minor mudstone and coal from the fluvial/coastal plain. The following well logs show the Belly River Formation.
 

Pine Cliff GPine 00/01-11-031-21W4/0
Belly River Formation Type Log

 


The Viking Formation at Drumheller is relatively well washed and variably shady fine to coarse-grained sandstone, with subordinate conglomerate and pebbly sandstone from a prograding shelf to shoreface facies.
 

TxnE Wayne 00/10-17-028-19W4/0
Viking Formation Type Log

 


 

The Nisku Formation at Drumheller consists of light brown to light grey crystalline dolomite, with lesser amounts of brownish grey dolomitic siltstones, green shales and anhydrite.
 

SLE GPine 00/10-35-029-21W4/0
Nisku Formation Type Log


 


 

The Company also believes there is missed pay in the Ellerslie and Glauconitic formations at Drumheller as shown at depths of 1,380 meters and 1,340 metres on the following logs.
 

SLE GPine 00/06-07-030-20W4/0
Glauconitic & Ellerslie Missed Pay

Drumheller Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Drumheller Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Drumheller Package contained remaining proved plus probable reserves of 1.2 Bcf of natural gas and 80,000 barrels of oil and natural gas liquids (282,000 boe), with an estimated net present value of approximately $520,000 using forecast pricing at a 10% discount.

 


Drumheller LMR
 
As of March 6, 2021, SanLing’s deemed net asset value for the Drumheller Package was ($1.0 million) (deemed assets of $3.4 million and deemed liabilities of $4.4 million), with an LMR ratio of 0.77.

 

Drumheller Well List

Click here to download the complete well list in Excel.

Provost Package

Township 34-47, Range 6-15 W4

At Provost, SanLing holds mainly a 100% working interest including the Provost Viking Agreement No. 2 and No. 3.
 
Average production net to SanLing from the Provost Package for 2020 was approximately 563 Mcf/d of natural gas and 81 barrels of oil and natural gas liquids per day (175 boe/d).

 



Provost, Alberta
Gross Production Group Plot of SanLing's Wells


The well SLE Provost 00/05-18-040-08W4/3 is the only oil well that SanLing recompleted in 2016. There is no offset drainage and the well is in a sand lens in the Colony Formation which is not present in other wells.
 


In the Provost area the Viking Formation is comprised of sandstone or conglomerate and pebbly sandstone. The Company has identified the Viking Formation as a potential horizontal oil resource play with 50 potential drilling locations.
 

PEOC Killam 00/04-33-041-13W4/0
Viking Formation Type Log


 


At Provost, the shoreface and channel facies of Lower Upper Mannville (Glauconitic Sandstone) have potential for vertical upside drilling locations.
 

Crescent Point Killam 00/03-23-042-14W4/0
Mannville (Glauconitic Sandstone) Type Log


 

Provost Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Provost Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Provost Package contained remaining proved plus probable reserves of 1.5 million barrels of oil and natural gas liquids and 3.0 Bcf of natural gas (2.0 million boe), with an estimated net present value of approximately $8.2 million using forecast pricing at a 10% discount.

 


Provost LMR
 
As of March 6, 2021, SanLing’s deemed net asset value for the Provost Package was ($11.2 million) (deemed assets of $5.2 million and deemed liabilities of $16.4 million), with an LMR ratio of 0.32.

 

Provost Well List

Click here to download the complete well list in Excel.

Pembina Package

Township 31-57, Range 1-22 W5

At Pembina, SanLing holds various working interests with production primarily from the Cardium and Nisku formations.
 
Average production net to SanLing from the Pembina Package for 2020 was approximately 33 barrels of oil per day and 116 Mcf/d of natural gas (52 boe/d).

 



Pembina, Alberta
Gross Production Group Plot of SanLing's Wells


 

The Cardium Formation at Pembina is comprised of marine sandstones and conglomerates of the shoreface and shallow shelf.
 

ARC MTPA Pembina 00/11-09-048-08W5/0
Cardium Formation Type Log


 

Pembina Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Pembina Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Pembina Package contained remaining proved plus probable reserves of 355,000 barrels of oil and natural gas liquids and 854 MMcf of natural gas (477,000 boe), with an estimated net present value of approximately $3.7 million using forecast pricing at a 10% discount.

 


Pembina LMR
 
As of March 6, 2021, SanLing’s deemed net asset value for the Pembina Package was ($1.1 million) (deemed assets of $600,631 and deemed liabilities of $1.7 million), with an LMR ratio of 0.35.

 

Pembina Well List

Click here to download the complete well list in Excel.

North Oil Package

Township 58-95, Range 15 W4 - 2 W6

In the North Oil Package, SanLing holds various operated and non-operated working interests.
 
Average production net to SanLing from the North Oil Package for 2020 was approximately 25 Mcf/d of natural gas and one barrel of oil per day (five boe/d).

 


North Oil, Alberta
Gross Production Group Plot of SanLing's Wells

North Oil Facilities
 
The Company does not have ownership in any facilities associated with the North Oil Package.
 
North Oil Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the North Oil Package contained remaining proved plus probable reserves of 13,000 barrels of oil and 71 MMcf of natural gas (25,000 boe), with an estimated net present value of approximately $170,000 using forecast pricing at a 10% discount.

 


North Oil LMR
 
As of March 6, 2021, SanLing’s deemed net asset value from the North Oil Package was ($2.1 million) (deemed assets of $0 and deemed liabilities of $2.1 million), with an LMR ratio of 0.00.

 

North Oil Well List

Click here to download the complete well list in Excel.

Peace River Arch Package

Township 71-89, Range 1-13 W6

In the Peace River Arch Package, SanLing holds various working interests in several areas including Dixonville and Valhalla/Sexsmith.

 
Average production net to SanLing from the Peace River Arch Package for 2020 was approximately 8.2 MMcf/d of natural gas and 70 barrels of oil and natural gas liquids (1,432 boe/d).

 


Peace River Arch, Alberta
Gross Production Group Plot of SanLing's Wells


In the Valhalla/Sexsmith area on the Peace River Arch, the Company has identified the Bluesky and Gething formations as targets for additional drilling. The Bluesky is a shallow-marine progradational facies within the overall Glauconitic/Bluesky transgression capped by open-marine Wilrich shales. Production from the Bluesky is low decline. The Bluesky reservoir is shown in the following well logs.


COP Valhalla 00/06-20-076-07W6/0
Bluesky Formation Type Log

 


SanLing also believes there is extensive horizontal inventory of over 90 potential locations in the Granite Wash Formation on the Peace River Arch. The Devonian-aged Granite Wash in the Valhalla/Sexsmith area unconformably overlies the Precambrian igneous and metamorphic rocks.


SLE Valhalla 02/16-04-076-08W6/0
Granite Wash Formation Type Log

 

Peace River Arch Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Peace River Arch Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Peace River Arch Package contained remaining proved plus probable reserves of 93.1 Bcf of natural gas and 690,000 barrels of oil and natural gas liquids (16.2 million boe), with an estimated net present value of approximately $29.1 million using forecast pricing at a 10% discount.

 


Dixonville Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Dixonville property contained remaining proved plus probable reserves of 513 MMcf of natural gas (86,000 boe), with an estimated net present value of approximately $221,000 using forecast pricing at a 10% discount.

 


Peace River Arch LMR
 
As of March 6, 2021, SanLing’s deemed net asset value from the Peace River Arch Package was $17.2 million (deemed assets of $32.3 million and deemed liabilities of $15.2 million), with an LMR ratio of 2.13.

 

Dixonville LMR
 
As of March 6, 2021, SanLing’s deemed net asset value from Dixonville was ($369,878) (deemed assets of $154,571 and deemed liabilities of $524,449), with an LMR ratio of 0.29.

 


Peace River Arch Well List

Click here to download the complete well list in Excel.

Rainbow Oil Package

Township 107-117, Range 4-9 W6

In the Rainbow Oil Package, the Company holds various working interests with Keg River oil production.
 
Average production net to SanLing from the Rainbow Oil Package for 2020 was approximately 105 barrels of oil and natural gas liquids and 40 Mcf/d of natural gas (112 boe/d).

 



Rainbow Oil, Alberta
Gross Production Group Plot of SanLing's Wells


The Company believes the fossiliferous carbonates of the Keg River Formation and the nearshore clastics of the alluvial fan deposits in the Granite Wash Formation to be prospective. 
 

SLE Rainbow 00/15-24-108-07W6/0
Keg River Formation Type Log

 


SanLing believes there is potential to drill a horizontal Keg River oil well at 10-07-110-04W6. This would be optimal to drill horizontally toward the abandoned 11-07 well which was drilled in 1998. The 11-07 well produced approximately 65,000 barrels of oil and only 3,000 barrels of water.
 

Rainbow Oil Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Rainbow Oil Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Rainbow Oil Package contained remaining proved plus probable reserves of 403,000 barrels of oil and 152 MMcf of natural gas (429,000 boe), with an estimated net present value of approximately $3.8 million using forecast pricing at a 10% discount.

 


Rainbow Oil LMR
 
As of March 6, 2021, SanLing’s deemed net asset value from the Rainbow Oil Package was $169,205 (deemed assets of $5.4 million and deemed liabilities of $5.2 million), with an LMR ratio of 1.03.

 

Rainbow Oil Well List

Click here to download the complete well list in Excel.

Rainbow Gas Package

Township 94-119, Range 23 W5 – 11 W6

In the Rainbow Gas Package, SanLing holds various working interests with predominantly Bluesky/Gething natural gas production.
 
Average production net to SanLing from the Rainbow Gas Package for 2020 was approximately 3.2 MMcf/d of natural gas and 16 barrels of natural gas liquids per day (552 boe/d).

 


Rainbow Gas, Alberta
Gross Production Group Plot of SanLing's Natural Gas Wells


The Company has identified potential for development in the Bluesky and Gething formations in the Rainbow Oil Package. The Bluesky Formation is comprised of sandstone, usually containing glauconite. The Gething is comprised of fluvial/deltaic sediments that accumulated in the subsiding foredeep.
 

SLE Rainbow 00/10-33-107-06W6/0
Bluesky/Gething Type Log

 


Rainbow Gas Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Rainbow Gas Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Rainbow Gas Package contained remaining proved plus probable reserves of 5.8 Bcf of natural gas and 34,000 barrels of natural gas liquids (997,000 boe), with an estimated net present value of approximately ($3.5 million) using forecast pricing at a 10% discount.

 


Rainbow Gas LMR
 
As of March 6, 2021, SanLing’s deemed net asset value from the Rainbow Gas Package was ($22.1 million) (deemed assets of $16.5 million and deemed liabilities of $38.5 million), with an LMR ratio of 0.43.

 

Rainbow Gas Well List

Click here to download the complete well list in Excel.

BRITISH COLUMBIA

The Properties are separated into the following geographical packages for this offering: Noel, Lagarde and Northeastern BC in British Columbia.

Click here for more information on the individual packages.

Noel Package

NTS 93-P-01 – 93-P-08

In the Noel Package, SanLing holds various working interests in lands with multiple natural gas producing zones. The Noel Package is offset by significant natural gas production from the Cadomin Formation with ample infrastructure capacity. The majority of SanLing’s production is from the Cadotte, Falher and Cadomin formations.
 
Average production net to SanLing from the Noel Package for 2020 was approximately 1.7 MMcf/d of natural gas and 54 barrels of natural gas liquids per day (344 boe/d).

 


Noel, BC
Gross Production Group Plot of SanLing's Natural Gas Wells


The Company believes there are 14 horizontal Cadomin/Cadotte drilling locations on its lands at Noel.  The Cadomin play is based on horizontal wells drilled into a conglomerate with 10-25 metres of net pay as shown on the following well log.
 

OVV Kelly 00/C-003-J/093-P-01/0
Cadomin Formation Type Log

 


Noel Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Noel Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Noel Package contained remaining proved plus probable reserves of 5.0 Bcf of natural gas and 106,000 barrels of natural gas liquids (946,000 boe), with an estimated net present value of approximately $1.0 million using forecast pricing at a 10% discount.

 


Noel LMR
 
As of February 23, 2021, SanLing’s deemed net asset value for the Noel Package was $401,224 (deemed assets of $4.2 million and deemed liabilities of $3.1 million), with an LMR ratio of 1.33.

 

Noel Well List

Click here to download the complete well list in Excel.

Lagarde Package

Township 87, Range 15 W6

At Lagarde, the Company operates and holds a 75% working interest in one Halfway oil well at 102/16-20-087-15W6/0 (SLE Et Al Lagarde A16-20-087-15). The 102/16-20 well was shut-in in April 2020.
 



Lagarde, BC
Gross Production Plot
SLE Et Al Lagarde A16-20-087-15 (SanLing W.I. 75%)


The Company believes there is potential for oil development in the sandstone reservoirs of the Halfway Formation as shown in the following well logs and core analysis.
 

Enercapita N Boundary 00/06-31-087-14W6/0
Halfway Formation Type Log


 

In addition to production from the Halfway Formation, the Company has identified missed pay in the Cadomin Formation at Lagarde as shown in the following well logs.
 


 

SanLing had also used 3D seismic to identify a Boundary Lake vertical location on its 100% working interest lands at Lagarde at 07-20-087-15W6.
 
Lagarde Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Lagarde Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Lagarde Package contained remaining proved plus probable reserves of 4,000 barrels of oil, with an estimated net present value of approximately $43,000 using forecast pricing at a 10% discount.


Lagarde LMR
 
As of February 23, 2021, SanLing’s deemed net asset value from the Lagarde Package was ($91,398) (deemed assets of $79,992 and deemed liabilities of $171,390), with an LMR ratio of 0.47.

 

Lagarde Well List

Click here to download the complete well list in Excel.

Northeastern BC Package

TWP 77-87 RGE 14-17 W6 and NTS 094-A – 094-P

In the Northeastern BC Package, the Company holds various operated and non-operated working interests.
 
Average production net to SanLing from the Northeastern BC Package for 2020 was approximately 528 Mcf/d of natural gas and one barrel of natural gas liquids per day (88 boe/d).

 


Northeastern BC
Gross Production Group Plot of SanLing's Natural Gas Wells

 

The Company has identified several missed pay opportunities in the Bullhead Group, Debolt, Jean Marie, Keg River and Pine Point formations in its wells in the Northeastern BC Package.
 
The following well logs and core analysis show the Keg River Formation.


SLE Et Al Klua 00/A-076-J/094-J-08/0
Keg River Formation Type Log

 


Additionally, SanLing has identified missed pay in the Falher A and Cadotte formations as shown in the following well logs for the well SLE Kelly 00/D-069-G/093-P-01/0.


SLE Kelly 00/D-069-G/093-P-01/0
Recompletion Opportunity


Northeastern BC Facilities
 
Details of all SanLing’s facilities are available in the virtual data room for parties that execute a confidentiality agreement.
 
Northeastern BC Reserves
 
GLJ Ltd. (“GLJ”) was commissioned by SanLing to prepare a mechanical update of its oil and natural gas reserves effective December 31, 2019 (the “GLJ Report”). The GLJ Report is effective December 31, 2019, using Sproule Associates Limited’s December 31, 2019 forecast pricing.
 
GLJ estimated that as of December 31, 2019 the Northeastern BC Package contained remaining proved plus probable reserves of 1.3 Bcf of natural gas and 2,000 barrels of natural gas liquids (210,000 boe), with an estimated net present value of approximately $168,000 using forecast pricing at a 10% discount.

 


Northeastern BC LMR
 
As of February 23, 2021, SanLing’s deemed net asset value from the Northeastern BC Package was ($5.3 million) (deemed assets of $2.8 million and deemed liabilities of $8.1 million), with an LMR ratio of 0.34.

 

Northeastern BC Well List

Click here to download the complete well list in Excel.

PROCESS & TIMELINE

Sayer Energy Advisors is accepting offers to acquire the Properties until 12:00 pm on Thursday June 24, 2021.

 

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

 

Sayer Energy Advisors is accepting offers from interested parties until
noon on Thursday June 24, 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 (tpavic@sayeradvisors.com) or fax (403.266.4467).
 
Included in the confidential information is the following: summary land information, the GLJ Report, LMR information, most recent net operations summary and other relevant technical information.
 
Download Confidentiality Agreement
 
To receive further information on the Properties please contact Tom Pavic, Ben Rye or Grazina Palmer at 403.266.6133.
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