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Companies / Ribbon Creek Resources Inc.
Ribbon Creek Resources Inc.
Corporate DivestitureBid Deadline: March 17, 2022
12:00 PM
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OVERVIEW
Ribbon Creek Resources Inc. and its wholly owned subsidiary Mato Inc. (“Mato”) (collectively “Ribbon Creek” or the “Company”) has engaged Sayer Energy Advisors to assist it with a sale of the shares of the Company.Ribbon Creek is a highly focused junior oil and natural gas company producing clean light oil and solution natural gas from its operations in the Boundary Lake, Pembina and Sundre areas of Alberta (the “Properties”).
The Properties consist of predominantly operated interests in the Boundary Lake and Sundre areas as well as a 1.5249% working interest in the Pembina Keystone Cardium Unit No. 2 operated by Bonterra Energy Corp.
Over the first nine months of 2021, the Company’s average daily production consisted of approximately 76 barrels of oil and natural gas liquids per day and 327 Mcf/d of natural gas (131 boe/d).
The Company is forecasting net operating income on a proved developed producing basis to be $1,600,000 in 2022.
As at September 30, 2021, the Company’s proved developed producing reserves have an estimated net present value of $10.8 million and total proved reserves of $33.4 million based on the implementation of a waterflood at Boundary Lake, at a 10% discount.
As at September 30, 2021, Ribbon Creek had no bank debt, positive working capital of $1.2 million and total tax pools of approximately $2.0 million. Additional corporate information relating to Ribbon Creek will be provided to parties upon execution of a confidentiality agreement.
Overview Map Showing the Location of Ribbon Creek’s Properties
Corporate Overview
Production Overview
Over the first nine months of 2021, the Company’s average daily production consisted of approximately 76 barrels of oil and natural gas liquids per day and 327 Mcf/d of natural gas (131 boe/d).
Gross Production Group Plot of Ribbon Creek’s Oil and Natural Gas Wells
Reserves Overview
The Company prepared an internal reserves evaluation of the Properties (the “Reserve Report”). The Reserve Report is effective October 1, 2021 using GLJ Ltd. (“GLJ”) forecast pricing as at October 1, 2021.
The Company estimated that, as of October 1, 2021, the Properties contained remaining proved reserves of 3.8 million barrels of oil and natural gas liquids and 3.6 Bcf of natural gas (4.4 million boe), with an estimated net present value of $33.4 million using forecast pricing at a 10% discount.
The Reserve Report is based on total proved reserves.
Boundary Lake
Ribbon Creek markets its natural gas through Fulcrum Energy Management Inc. at the Boundary Lake South meter station #3001. Natural gas is transported on the NOVA Pipeline with firm service of 6.0 103m3/day expiring March 31, 2023.
Ribbon Creek markets its Boundary Lake oil through Secure Energy Services Inc. and typically ships five to six truck loads (200-240 m3) per month to the Secure LaGlace terminal.
Ribbon Creek has a contract in place with Canadian Natural Resources Limited for natural gas liquids delivered to the Boundary Lake Gas Plant at 01-14-085-13W6. The contract is in place until March 31, 2022.
Sundre
Mato has a 30-day evergreen marketing contract in place with Shell Trading Canada for oil at the Rangeland pipeline connected battery operated by Whitecap Resources Inc. at 01-24-033-05W5.
Whitecap markets Mato’s natural gas liquids and provides payment via monthly joint interest billings.
Mato markets its natural gas through Fulcrum Energy Management Inc. at the Harmattan-Elkton meter station #1166.
Pembina
Ribbon Creek is paid by the operator via a monthly joint interest billing.
LMR Overview as of January 1, 2022
The LMR for each of the Properties as of January 1, 2022 is summarized below.
Summary of LMR by Property
Note that the Sundre property is operated by Mato, Ribbon Creek’s wholly-owned subsidiary.
Seismic
The Company does not have ownership in any seismic data.
BOUNDARY LAKE
Township 84-87, Range 9-13 W6In the Boundary Lake area, Ribbon Creek holds various operated and non-operated interests including an average 97% working interest in the commingled Boundary Lake A & D Pool which produces from the Upper Triassic Boundary Lake member at a depth of 1,300 metres. The Company also holds a minor royalty interest in the Boundary Lake area.
Over the first nine months of 2021, average daily production net to the Company from Boundary Lake was approximately 51 barrels of oil and natural gas liquids per day and 167 Mcf/d of natural gas (79 boe/d).
At Boundary Lake, Ribbon Creek has identified significant upside through the implementation of a waterflood.
Boundary Lake, Alberta
Gross Production Group Plot of Ribbon Creek’s Oil and Natural Gas Wells
Boundary Lake Upside
The primary targets for oil and natural gas production at Boundary Lake are the Boundary Lake A & D zones. Production from the A & D zones is commingled in Ribbon Creek’s Section 29 wells.
Ribbon Creek BdyLks 100/14-29-085-12W6/0 – Boundary Lake Type Log
Boundary Lake A & D Pool Outline Map
Ribbon Creek has identified significant upside opportunities on the Boundary Lake property from a reservoir perspective. Baker Hughes RDS conducted a waterflood feasibility study for the Company in 2014. The study proved incremental recovery of approximately 20% or 3.2 million barrels if a waterflood was implemented in the Boundary Lake A&D Pool. Several waterflood analogies exist in the area, including the Boundary Lake Triassic E Unit as well as the Boundary Lake Units 1 & 2 operated by Whitecap Resources Inc.
The study is available for review by parties that execute a confidentiality agreement.
The Boundary Lake pool was discovered and started producing in January 1983. The pool contains light oil with average 36.2° API and has only been under primary recovery to date.
The Company believes development of the pool can take place by drilling six infill wells on the property in 2022 and converting four historical wells to injection wells. Following this, in 2024 the next step would be to convert infill wells to injection wells. Injection water will be sourced from the Bluesky Formation in the 08-20-085-12W6 well.
The total capital costs associated with development of the Boundary Lake A & D Pool waterflood are estimated to be approximately $9.6 million. This project would result in an estimated incremental net present value of $22.6 million, increasing the Company’s net present value to $33.4 million at a 10% discount.
Boundary Lake A Pool Net Oil Pay Map
Boundary Lake D Pool kmax h Map
Boundary Lake FacilitiesBoundary Lake D Pool kmax h Map
At Boundary Lake, the Company holds interests in the following facilities.
Boundary Lake Reserves
The Company prepared an internal reserves evaluation of the Properties (the “Reserve Report”). The Reserve Report is effective October 1, 2021 using GLJ Ltd. (“GLJ”) forecast pricing as at October 1, 2021.
The Company estimated that, as of October 1, 2021, the Boundary Lake property contained remaining proved reserves of 3.5 million barrels of oil and natural gas liquids and 2.2 Bcf of natural gas (3.9 million boe), with an estimated net present value of $29.0 million using forecast pricing at a 10% discount.
Boundary Lake LMR as of January 1, 2022
Boundary Lake Well List
Click here to download the entire well list in Excel.
SUNDRE
Township 32-34, Range 5 W5At Sundre, Ribbon Creek’s wholly owned subsidiary, Mato holds various operated and non-operated working interests in approximately 3.25 sections of land. The Sundre property produces 42° API oil and solution natural gas from the Viking Formation at a depth of 2,500 metres.
Over the first nine months of 2021, average daily production net to the Company from Sundre was approximately 19 barrels of oil and natural gas liquids per day and 130 Mcf/d of natural gas (41 boe/d).
Sundre, Alberta
Gross Production Group Plot of Ribbon Creek’s Oil & Natural Gas Wells
Sundre Facilities
At Sundre, the Company holds interests in the following facilities.
Sundre Reserves
The Company prepared an internal reserves evaluation of the Properties (the “Reserve Report”). The Reserve Report is effective October 1, 2021 using GLJ Ltd. (“GLJ”) forecast pricing as at October 1, 2021.
The Company estimated that, as of October 1, 2021, the Sundre property contained remaining proved reserves of 1.1 Bcf of natural gas and 173,000 barrels of oil and natural gas liquids (361,000 boe), with an estimated net present value of $3.4 million using forecast pricing at a 10% discount.
Sundre LMR as of January 1, 2022
Note that the Sundre property is operated by Mato, Ribbon Creek’s wholly-owned subsidiary.
Sundre Well List
Click here to download the entire well list in Excel.
PEMBINA
Township 48-49, Range 3-4 W5At Pembina, the Company holds a 1.5249% working interest in the Pembina Keystone Cardium Unit No. 2 operated by Bonterra Energy Corp.
Over the first nine months of 2021, average daily production net to the Company from Pembina was approximately six barrels of oil and natural gas liquids per day and 30 Mcf/d of natural gas (11 boe/d). Production from the Unit is from the Cardium Formation which is found at a depth of approximately 1,300 metres.
There is significant upside identified through a large inventory of low-risk, highly economic undrilled horizontal locations at Pembina.
Bonterra has budgeted four wells to be drilled in 2022. The capital costs net to Ribbon Creek associated with these four wells are estimated to be approximately $104,000.
Pembina, Alberta
Gross Production Group Plot of Pembina Keystone Cardium Unit No. 2
Pembina FacilitiesGross Production Group Plot of Pembina Keystone Cardium Unit No. 2
The Company is a 1.5249% working interest owner in all facilities owned by the Pembina Keystone Cardium Unit No. 2.
Pembina Reserves
The Company prepared an internal reserves evaluation of the Properties (the “Reserve Report”). The Reserve Report is effective October 1, 2021 using GLJ Ltd. (“GLJ”) forecast pricing as at October 1, 2021.
The Company estimated that, as of October 1, 2021, the Pembina property contained remaining proved reserves of 68,000 barrels of oil and natural gas liquids and 315 MMcf of natural gas (120,000 boe), with an estimated net present value of $915,000 using forecast pricing at a 10% discount.
Pembina LMR as of January 1, 2022
The Company does not operate any wells or facilities at Pembina.
Pembina Well List
Click here to download the entire well list in Excel.
PROCESS & TIMELINE
Sayer Energy Advisors is accepting proposals relating to the process until 12:00 pm on Thursday, March 17, 2022.
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.
transaction(s) with the party(ies) submitting the most acceptable proposal(s) at the conclusion of the process.
Sayer Energy Advisors is accepting proposals from interested parties until
noon on Thursday March 17, 2022.
noon on Thursday March 17, 2022.
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 Company 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 a 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 Binder is the following: summary land information, the Reserve Report, LMR information, most recent net operations summary, detailed facilities information and other relevant corporate, financial and technical information.
Download Confidentiality Agreement
To receive further information on the Company please contact Ben Rye, Tom Pavic or Sydney Birkett at 403.266.6133.