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Under Review   /   Burgess Creek Exploration Inc.



Burgess Creek Exploration Inc.

Property Divestiture
Bid Deadline: April 7, 2022
12:00 PM
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OVERVIEW

BURGESS CREEK HAS SOLD ITS INTERESTS IN THE ROSEBANK AREA OF SASKATCHEWAN.

Burgess Creek Exploration Inc. (“Burgess Creek” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of certain non-core operated oil and associated natural gas interests located in the Sherwood, Elcott, Rosebank, Queensdale, Manor and Redvers areas of southeastern Saskatchewan and the Dollard area of southwestern Saskatchewan as well as certain non-operated interests in the Queensdale East and Northgate areas of southeastern Saskatchewan (the “Properties”).  The Properties consist of primarily low-decline, light oil production with associated natural gas.
 
Average daily production net to Burgess Creek from the Properties for the month of December 2021 was approximately 150 barrels of oil and natural gas liquids per day and 62 Mcf/d of associated natural gas (160 boe/d).
 
Consolidated net operating income derived from the Properties in December 2021 was approximately $182,000, or $2.2 million on an annualized basis.
 
Burgess Creek has regularly maintained the Properties and is in compliance with all regulatory requirements.

 
Overview Map Showing the Location of the Divestiture Properties

 
Production Overview

Average daily production net to Burgess Creek from the Properties for the month of December 2021 was approximately 150 barrels of oil and natural gas liquids per day and 62 Mcf/d of associated natural gas (160 boe/d) as outlined below.
 
Consolidated net operating income derived from the Properties in December 2021 was approximately $182,000, or $2.2 million on an annualized basis.

 

Gross Production Group Plot of Burgess Creek's Oil Wells

 
LMR Summary

The LMR for each of the Properties as of December 31, 2021 is summarized below.

 
Summary of LMR by Property

1Areas contain non-operated wells/facilities. Associated deemed liabilities have been excluded from this analysis.
 
2The Dollard and Redvers properties were shut-in in March 2020 due to low commodity prices. Upon re-activation, the Company projects the LMR ratio for Dollard to be 1.65 with a net deemed asset value of $422,718 (deemed assets of $1,073,388 and deemed liabilities of $650,670).

 
The Company has recently completed four well abandonments at Redvers which has decreased the deemed liabilities. There is approximately $89,000 in outstanding reclamation work required. The following chart shows the near-term liability for the Properties.

 

SEISMIC OVERVIEW

The Company does not have ownership in any proprietary seismic data and has limited interest in trade data relating to the Properties.
 
MARKETING OVERVIEW

Oil is sold on a 30-day evergreen contract to either Tidal Energy Marketing Inc. or Kingston Midstream.
 
Most of the Company’s batteries are pipeline connected, which is advantageous for producing during breakup.
 
The Company’s non-operated oil and associated natural gas production from the Northgate property is sold alongside Vermilion Energy Inc.’s production into the North Portal Gas Processing Plant and Gas Gathering System which is owned and operated by Steel Reef Infrastructure Corp.
 
Burgess Creek sells its solution natural gas to Whitecap Resources Inc. from the Rosebank property at the 01-15-005-32W1 battery where it is sold into the Nottingham Gas Gathering System.
 
At Queensdale, the 08-32 battery is tied in to the Alida toll area. The product is classified as Cromer LSB (light sour blend).  The Company sells its associated natural gas to Whitecap and ATCO Midstream Ltd. from the 08-32-006-01W2 battery.

RESERVES OVERVIEW


GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Properties contained remaining proved plus probable reserves of 2.6 million barrels of oil and natural gas liquids and 720 MMcf of natural gas (2.7 million boe), with an estimated net present value of $38.8 million using forecast pricing at a 10% discount.


QUEENSDALE

Township 6, Range 1 W2
 
At Queensdale, Burgess Creek holds mainly operated working interests as well as minor non-operated working interests in approximately two sections of land on which there are several wells with low-decline, light oil production primarily from the Alida Beds.
 
The Queensdale Pool was discovered in 1959 and has produced 9.1 million barrels of oil. The original oil in place of the defined pool is between 43 and 48 million barrels with a 16.9% recovery factor to date. The offsetting area analogue predicts a pool recovery factor of 25% is achievable in a solution gas drive reservoir with underlying aquifer support.
 
The pool now has three operators, Burgess Creek, Saturn Oil & Gas Inc. and Vermilion Energy Inc. All three operators own infrastructure in the area including batteries and producing wells.
 
Average daily production net to Burgess Creek from Queensdale for the month of December 2021 was approximately 71 barrels of oil per day and 27 Mcf/d of natural gas (76 boe/d).
 
Burgess Creek has completed seven workovers in the last year. Required pump workover frequency is approximately three years.

 


Queensdale, Saskatchewan
Gross Production Group Plot of Burgess Creek's Oil Wells


The proved developed producing decline rate at Queensdale is 8% per year.


Queensdale Geology

The reservoir at Queensdale is an upper Alida stratigraphic unit of the Alida Beds. This upper stratigraphic unit was deposited in a late Alida paleo-erosional valley where the upper Alida Glenburn stratigraphic unit was removed by erosion and infilled with detrital limestone sediments and lesser sandstone and siltstone. These detrital sediments are the reservoir interval in the Queensdale property.
 
The Glenburn interval of the Alida is preserved on either side of the paleo-erosional valley. Analogues to the Burgess Creek Queensdale property are the Cantal and Alida West pools.

 
The Frobisher-Alida in Queensdale consists of beds of detrital carbonate grainstone, silty-sandy lime and dolowackestones and quartz sandstone units with porosity ranging between 12% to 25% and permeability of 10 to 30 mD in the productive intervals.

 
The reservoir drive mechanism is a down dip water drive, with the regional oil/water contact at 598 metres subsea.
 
SouthRoy Queensdale 101/08-29-006-01W2/0
Queensdale Type Log


The following map shows the productive Frobisher-equivalent detrital fill at Queensdale.
 
Queensdale, Saskatchewan
Frobisher Beds Map– C.I.: 2 m



Structural cross-section from south to north through Queensdale


Queensdale, Saskatchewan
Spearfish Isopach Map - C.I.: 2 m


 
Upside
 
The Company has one proven undeveloped Alida drilling location booked in Queensdale, and four additional re-drill or step-out locations identified in Sections 28 and 29-006-01W2.
 
Burgess Creek estimates the cost to drill, complete and equip a horizontal well from an existing wellsite that is tied-in to be $825,000. The Company’s proven undeveloped location has total proven reserve potential of 75,000 barrels and total proven plus probable reserve potential of 90,000 barrels of oil.
 
The green curve on the following chart represents the average result from the last 15 wells drilled at Queensdale.

 

Re-entry Potential

The Company has identified the potential to utilize existing wellbores at Queensdale to re-enter and drill at 100 metre downspacing. The P50 economics were run using 45,000 barrels and resulted in payout of less than one year.


Burgess Creek estimates the cost to re-enter a horizontal well, abandon the existing legs and drill a new lateral leg to be $575,000.
 
The Company has one proven undeveloped re-entry with total proven reserve potential of 45,000 barrels and total proven plus probable reserve potential of 55,000 barrels of oil. Burgess Creek has identified 2 to 8 potential re-entry candidates.


Queensdale Facilities
 
Burgess Creek operates a multi-well oil battery at 08-32-006-01W2 and has working interest in five active salt water disposal wells. The 08-32 battery is in ideal location and could be expanded to accommodate the additional fluid. The 08-32 battery is tied in to the Alida toll area. The product is classified as Cromer LSB (light sour blend).
 
Burgess Creek has oil treating capacity of 450 m3 of oil per day and 4,600 m3 of water per day.
 
Details of the facilities and equipment at Queensdale are as follows:
 
One group treater: Fre-Flo 6 x 28 Hz (50 psi).
Two Test Treaters: Presson 7 x 27 vertical (50 psi) and Pitt Demoine 6 x 24 (50 psi).
 
Disposal pump (National J165) and one saltwater disposal well with 400 m3/d capacity. The Company also has free water knockout (375 psi) and four salt water disposal wells with 2,250 m3/d capacity.
 
Vapor recovery unit system.
 
Excess natural gas production from Queensdale is conserved and processed at the Nottingham Gas plant at 08-17-005-32W1.

Queensdale Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Queensdale property contained remaining proved plus probable reserves of 463,000 barrels of oil and natural gas liquids and 393 MMcf of natural gas (529,000 boe), with an estimated net present value of $8.7 million using forecast pricing at a 10% discount.



Queensdale LMR
 
As of December 31, 2021, Burgess Creek’s net deemed asset value for Queensdale was $421,529 (deemed assets of $1.6 million and deemed liabilities of $1.2 million), with an LMR ratio of 1.35.

 

Queensdale Well List
 
Click here to download the complete well list in Excel.

SHERWOOD

Township 1, Range 32 W1
 
At Sherwood, Burgess Creek holds a 100% working interest in one half section of land with light oil production from the Sherwood/Griffin beds within the Frobisher Formation. The Company has a water disposal well at Silver Bay Sherwood 131/05-01-01-32W1/2.
 
Average daily production net to Burgess Creek from Sherwood for the month of December 2021 was approximately 22 barrels of oil per day. The Sherwood property has minimal flaring as solution natural gas is utilized in the treater burners.



Sherwood, Saskatchewan
Gross Production Group Plot of Burgess Creek’s Oil Wells

The proved developed producing decline rate at Sherwood is 4% per year. The Company does not have any drilling locations booked at Sherwood.
 
The Company’s battery at 05-01-001-32W1 has the ability to accept third party fluids.

Sherwood Geology

The following map shows the pool outline for the Sherwood pool on Burgess Creek's lands at Sherwood.


Sherwood Facilities
 
At Sherwood, Burgess Creek holds an 100% working interest and operates a multi-well oil battery at 05-01-001-32W1. Burgess Creek has oil treating capacity of 130 m3 of oil per day and 560 m3 of water per day.
 
Details of the facilities and equipment at Sherwood are as follows:
 
One group treater: National 6 x 27 Vertical (25 psi).
Test treater: National 4 x 20 Vertical (25 psi).
 
Disposal pump and one saltwater disposal well with 400 m3/d capacity.
 
Vapor recovery unit system.
 
Excess natural gas from Sherwood is consumed in the treaters.
  
Sherwood Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Sherwood property contained remaining proved plus probable reserves of 163,000 barrels of oil, with an estimated net present value of $2.1 million using forecast pricing at a 10% discount.



Sherwood LMR
 
As of December 31, 2021, Burgess Creek’s net deemed asset value for Sherwood was $131,836 (deemed assets of $498,374 and deemed liabilities of $366,538), with an LMR ratio of 1.36.


Sherwood Well List
 
Click here to download the complete well list in Excel.

 

ELCOTT

Township 1, Range 1-2 W2

At Elcott, Burgess Creek holds a 100% working interest in certain lands and wells with low decline rate (6%), light oil (37° API) production from the Midale Formation.
 
Average daily production net to Burgess Creek from Elcott for the month of December 2021 was approximately 11 barrels of oil per day.
 
The on-trend 101/11-03-001-02W2 well recently drilled by Vermilion along trend to the southwest produced with a 90-day initial production rate of 337 barrels of oil per day.



Elcott, Saskatchewan
Gross Production Group Plot of Burgess Creek’s Oil Wells

The proved developed producing decline rate at Elcott is 6% per year.

Elcott Geology
 
The reservoir at Elcott consists of the Midale Marly, the Midale Nesson and the Frobisher formations in structural highs on NE to SW trending ridges. The Midale Marly reservoir at Elcott consists of a 2 to 4 metre thick dolomite with porosity of 12% to 25% and permeability of 1 to 5 mD. The Marly reservoir is thickest on the structural axes. The Midale Nesson is a 4.5 to 5.5 metre thick limestone reservoir with porosity of 8% to 13% and permeability of 1 to 3 mD. The Frobisher consists of a skeletal lime grainstone with porosity intervals between 10% to 24% and permeability between 60 to 200 mD in the best reservoir intervals.

 
Analogue pools to Elcott include the Elcott East and Northgate pools. The Company believes there is waterflood potential by converting vertical wells into water injection wells.

 
Elcott, Saskatchewan
Midale Production Trends Map


Upside
 
The Company has four proven undeveloped horizontal Midale drilling locations booked at Elcott.
 
Burgess Creek estimates the cost of $750,000 to drill, $450,000 to complete and $200,000 to equip a horizontal well from an existing wellsite that is tied-in. Burgess Creek anticipates the completion would be a seven tonnes per stage frac with 110 metre frac port spacing.
 
The Company’s proven undeveloped locations have total proven reserve potential of 75,000 barrels and total proved plus probable reserve potential of 90,000 barrels of oil per location.
 
The Company believes there is waterflood potential by converting vertical wells into water injection wells.
 
Burgess Creek believes two wells could be restarted with minor workover capital.

 
Elcott Facilities
 
At Elcott, Burgess Creek has 100% working interest and operates single well batteries. The area has been assessed to build a multi-well battery with vertical wells being converted to water injection.
 
Natural gas production from Elcott is tied-in to the Steel Reef Portal Gas Plant.

Elcott Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Elcott property contained remaining proved plus probable reserves of 435,000 barrels of oil, with an estimated net present value of $7.5 million using forecast pricing at a 10% discount.



Elcott LMR
 
As of December 31, 2021, Burgess Creek’s net deemed asset value for Elcott was ($10,015) (deemed assets of $310,985 and deemed liabilities of $321,000), with an LMR ratio of 0.97.

  
Elcott Well List
 
Click here to download the complete well list in Excel.

MANOR

Township 7, Range 2 W2
 
At Manor, Burgess Creek operates and holds 40% to 100% working interests in certain lands and wells with oil production from the Lower Watrous Formation.
 
Average daily production net to Burgess Creek from Manor for the month of December 2021 was approximately 11 barrels of oil per day.

 

Manor, Saskatchewan
Gross Production Group Plot of Burgess Creek’s Oil Wells


The proved developed producing decline rate at Manor is 10% per year.

Manor Geology
 
The reservoir at Manor consists of the Lower Watrous/Spearfish Manor Sand, and the Alida formations. The Lower Watrous/Spearfish Manor Sand was deposited over the eroded Alida Beds on the Paleozoic Unconformity within a semi-circular depression up to 6 miles in diameter, with the pool reservoir interval being up to 6.5 metres in thickness.
 
The Lowermost Alida Beds subcrop across the Manor erosional depression.  The beds share an oil/water contact with the Spearfish at 575 metres subsea.
 
Analogue pools to Manor include the Newburg and South Westhope fields in Bottineau County, North Dakota.
 
WWild LR Rigel Dorset Manor 131/15-22-007-02W2/0
Manor Sand/Alida Type Log


Manor Isopach from base Water Sand to Mississippian Unconformity – Contour Interval: 2 m

Manor Net Sand Pay – C.I.: 2 m
 

Manor Facilities
 
The Company does not operate any facilities at Manor.
 
Excess natural gas production from Manor is conserved. 
 
Manor Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Manor property contained remaining proved plus probable reserves of 29,000 barrels of oil, with an estimated net present value of $82,000 using forecast pricing at a 10% discount.




Manor LMR
 
As of December 31, 2021, Burgess Creek’s net deemed asset value for Manor was ($261,006) (deemed assets of $298,664 and deemed liabilities of $559,670), with an LMR ratio of 0.53.

 
Manor Well List
 
Click here to download the complete well list in Excel.

QUEENSDALE EAST

Township 6, Range 34 W1- 1 W2
 
At Queensdale East, the Company has various non-operated working interests ranging from 15.67% to 54.84%. There are several oil wells producing from the Frobisher-Alida Beds. The Queensdale East property is operated by Vermilion Energy Inc.
 
Average daily production net to Burgess Creek from Queensdale East for the month of December 2021 was approximately 10 barrels of oil and natural gas liquids per day and three Mcf/d of natural gas.


Queensdale East, Saskatchewan
Gross Production Group Plot of Burgess Creek’s Oil Wells


The proved developed producing decline rate at Queensdale East is 11% per year.

Queensdale East Geology
 
The reservoir at Queensdale East consists of the Glenburn interval of the Alida Beds, subcropping upon a paleo-erosional high at the Mississippian Unconformity. The Alida at Queensdale East consists of a 15 metre thick limestone with porosity of 15% and permeability of 35 mD. Higher porosity has been seen in individual core samples.
 
The reservoir drive mechanism is a down dip water drive, with the Alida oil/water contact at 580 metres subsea. Analogue pools to Queensdale East include the Alida West pool.
 
Queensdale East, Saskatchewan – Alida Beds Net Pay – C.I.: 2 m

Upside
 
The Company has five proven undeveloped drilling locations booked and an additional five infill locations identified with reduced spacing in Section 13-006-01W2. The Company believes that the substantial remaining recoverable oil in place supports reduced spacing, as seen in the Alida West pool. Additional information on the oil originally in place at Queensdale East will be available in the data room for parties that sign a confidentiality agreement.


Queensdale East Facilities
 
The Company does not operate any facilities at Queensdale East.
  
Queensdale East Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Queensdale East property contained remaining proved plus probable reserves of 230,000 barrels of oil and natural gas liquids and 18 MMcf of natural gas (234,000 boe), with an estimated net present value of $4.7 million using forecast pricing at a 10% discount.



Queensdale East LMR
 
Burgess Creek does not operate any wells or facilities at Queensdale East.
 
Queensdale East Well List
 
Click here to download the complete well list in Excel.

NORTHGATE

Township 1, Range 2-4 W2
 
At Northgate, Burgess Creek holds various non-operated working interests in approximately nine (1.5 net) sections of land on which there are several wells producing oil from the Midale, Bakken and Three Forks formations. The Northgate property is operated by Vermilion Energy Inc.
 
Average daily production net to Burgess Creek from Northgate for the month of December 2021 was approximately 10 barrels of oil and natural gas liquids per day and 26 Mcf/d of natural gas (14 boe/d).
 
Analogue pools to Northgate include the Elcott and Pinto pools. There is water drive related to pressure depletion in the reservoir.



Northgate, Saskatchewan
Gross Production Group Plotof Burgess Creek’s Oil Wells

Northgate Geology
 
The primary reservoir at Northgate consists of the Midale Nesson and the Midale Marly on structural highs following NE to SW trending ridges. The Midale Nesson is a 2 to 3 metre thick limestone reservoir with porosity of 9% to 15% and permeability of 1 to 3 mD. The Midale Marly at Northgate consists of a 2 to 4 metre thick dolomite with porosity of 9% to 13% and permeability of 1 to 3 mD.
 
Analogue pools to Northgate include the Elcott and Pinto pools. There is water drive related to pressure depletion in the reservoir.
 
Northgate, Saskatchewan – Midale Beds Production Trends Map

Upside
 
The Company has five horizontal proven undeveloped and two probable Midale drilling locations booked at Northgate as well as two horizontal proven undeveloped Bakken locations.


Northgate Facilities
 
The Company does not operate any facilities at Northgate.
 
Excess natural gas production from Northgate is conserved.
 
Northgate Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Northgate property contained remaining proved plus probable reserves of 158,000 barrels of oil and natural gas liquids and 309 MMcf of natural gas (210,000 boe), with an estimated net present value of $3.2 million using forecast pricing at a 10% discount.




 
Northgate LMR
 
Burgess Creek does not operate any wells or facilities at Northgate.
  
Northgate Well List
 
Click here to download the complete well list in Excel.

REDVERS

Township 7, Range 31-32 W1
 
Burgess Creek holds a 100% working interest in approximately two sections of primarily Crown land at its Redvers property. Light oil production at Redvers is from the Tilston Beds.
 
The Redvers property was shut-in in March 2020 due to low commodity prices. Prior to being shut-in, average daily production net to Burgess Creek from Redvers for February 2020 was approximately 10 barrels of oil per day from three wells.

 


Redvers, Saskatchewan
Gross Production Group Plot of Burgess Creek’s Oil Wells

The historical yearly production decline rate at Redvers is 6%.

Redvers Geology
 
The well log below shows the Parkman Member of the Lower Tilson Beds at Redvers. The well downdip of the Redvers property shows all of the limestone units of the Parkman Member preserved before pinching out in the subcrop to the north. Preservation of structural highground on the Mississippian unconformity preserves the lower Tilston six miles updip of the subcrop and trapping in the same beds found in the analogous Frys, Lightning, North Edenvale and Bellgarde pools.


The Parkman limestone reservoir overlies the Lodgepole Formation and has porosity ranging between 15%-25% and 5-350 mD of permeability.
 
CPEC Frys 131/12-21-007-31W1/0
Tilston Beds Type Log


Upside

The Company has identified horizontal potential based on downdip production tests in 122/04-30-007-31W1 and 191/16-24-007-32W1. The Company believes that the Tilston beds are structurally continuous over the landbase, which directly offsets an abrupt Mission Canyon subcrop edge to the north. Potential exists for both infill drilling inside of current vertical control and step-out opportunities moving downdip in Sections 29 and 30 toward an economic oil water contact.

Mississippian Unconformity Structure over Tilston Gross Isopach – C.I.: 2 m

Redvers, Saskatchewan
Tilston Beds Cross Section

 
The Company has two proven undeveloped and four probable Parkman horizontal drilling locations booked at Redvers.
 
Burgess Creek estimates the cost of $450,000 to drill, $125,000 to complete and $150,000 to equip a horizontal well from an existing wellsite that is tied-in.
 
The Company’s proved undeveloped locations have total proved reserve potential of 40,000 barrels and total proved plus probable reserve potential of 60,000 barrels of oil per location.

 
Burgess Creek believes five wells could be restarted to add an additional 20-25 barrels of oil per day.
 
The Company has recently completed four well abandonments which has decreased the deemed liabilities. There is approximately $89,000 in outstanding reclamation work required.
  
Redvers Facilities
 
At Redvers, Burgess Creek holds 100% working interest and operates a multi-well oil battery at 04-30-007-01W1 and a satellite at 06-29-007-31W1. Burgess Creek has oil treating capacity of 130 m3 of oil per day and 1,900 m3 of water per day.
 
Details of the facilities and equipment at Redvers are as follows:
 
One group treater: C & M 6 x 27 Horizontal (50 psi).
 
The Company also has free water knockout at the 06-29-007-31W1 satellite 5 x 40 Horizontal (150 psi) and three salt water disposal wells with 2,650 m3/d capacity. The disposal wells could be used to generate third party disposal revenue.
 
Vapor recovery unit system.
 
Excess natural gas production from Redvers is consumed in the treaters.

Redvers Reserves
 
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Redvers property contained remaining proved plus probable reserves of 246,000 barrels of oil, with an estimated net present value of $2.9 million using forecast pricing at a 10% discount.



Redvers LMR
 
As of December 31, 2021, Burgess Creek’s net deemed asset value for Redvers was ($705,701) (deemed assets of $0 and deemed liabilities of $705,701), with an LMR ratio of 0.00.

 
The Redvers property was shut-in in March 2020 due to low commodity prices. Upon re-activation, the Company projects the LMR ratio for Redvers to be 0.36 with a net deemed asset value of ($481,153) (deemed assets of $272,880 and deemed liabilities of $754,033).
  
Redvers Well List
 
Click here to download the complete well list in Excel.

DOLLARD

Township 7, Range 19 W3
 
At Dollard, Burgess Creek holds a 92.58% working interest in the East Dollard Voluntary Unit as well as a 100% working interest in non-unit Crown mineral rights. Oil production at Dollard is from the Upper Shaunavon Member. The Dollard property is stimulated by water injection.
 
The Dollard property was shut-in in March 2020 due to low commodity prices. Prior to being shut-in, average daily production net to Burgess Creek from Dollard for February 2020 was approximately 20 barrels of oil per day.





Dollard, Saskatchewan
Gross Production Group Plot of Burgess Creek’s Oil Wells

Dollard Geology

The main producing reservoir at Dollard is the Upper Shaunavon Member. Along the production trend running north-south through the greater Dollard area, the Upper Shaunavon play has been significantly extended with the application of frac’d horizontal wells. Further, the Lower Shaunavon potential follows the same north-south production trend for at least 50 miles with the drilling of horizontal frac’d development wells.  On the Burgess Creek Dollard acreage, neither the Upper Shaunavon, nor Lower Shaunavon has been tested for development with frac’d horizontal wells.
 
Dollard is situated to the west of the regional N to S syncline. The Upper Shaunavon is composed of a sandstone reservoir with porosity ranging from 15% to 30% and permeability over one Darcy. The Upper Shaunavon is made up of large depositional lenses that are variable in thickness.
 
The Lower Shaunavon reservoir consists of a tighter regional carbonate unit with microcrystalline to vuggy porosity of 10% to 15% and permeability of 0.5 to 1 mD. The Upper Shaunavon is the current producing reservoir at Dollard. The oil/water contact for the Upper Shaunavon at Dollard is found at a depth of 460 metres subsea.
 
The following well logs shows net pay of seven metres using 20% average porosity in the Upper Shaunavon.
 
Silver Bay et al East Dollard VU C 131/12-17-007-19W3/0
Shaunavon Type Log


There is infill drilling potential in the Upper Shaunavon for banked oil displaced from SE to NW. The reservoir was flooded with a down dip line drive injection, however the waterflood sweep was not effective towards the edges of the pool. The pool edges are defined by a decreasing permeability.
 
Analogue pools to the Upper Shaunavon include the Rapdan and Eastbrook fields. The Lower Shaunavon is analogous to the Leon Lake and Eastend fields.
 
The oil originally in place in the defined pool is 15.6 million barrels. Injection started in 1970 and further injection wells were added in 1990. Current cumulative oil production is approximately 6.6 million barrels resulting in a 42% recovery factor. The offsetting area analogue predicts an achievable pool recovery factor of 53%. Burgess Creek estimates that there are 1.7 million barrels of oil remaining to be recovered from drilling additional horizontal infill wells.


Upside

The following map shows recent drilling offsetting Burgess Creek’s land targeting the Lower Shaunavon with 30-day initial production rates of 100 barrels of oil per day.
 
The Lower Shaunavon well CPEC Hz 101/08-08-007-19W3/0 was drilled in July 2021 by Crescent Point Energy Corp. Average daily production for the 08-08 well in November 2021 was approximately 83 barrels of oil per day with minor volumes of natural gas.

 

Burgess Creek has identified horizontal infill potential on its lands in the Upper Shaunavon in Sections 17 and 18-007-19W3. The waterflood is in the downdip portion of its lands in the southeast. The Company’s lands also have untapped potential for horizontal drilling of the Lower Shaunavon Member.


Vertical potential also exists in the Upper Shaunavon in the east half of Section 18.

In the Upper Shaunavon, Burgess Creek estimates the cost to drill, complete and equip a horizontal well at Dollard is $950,000 per well with expected total proved reserve potential of 75,000 barrels of oil and total proven plus probable reserve potential of 95,000 barrels per location. The Company has two proven undeveloped locations and one probable location booked in the Upper Shaunavon with two to three additional potential locations.
 
In the Lower Shaunavon, Burgess Creek estimates the cost to drill, complete and equip a horizontal well at Dollard is $1,380,000 per well with a 25-stage frac. The Company expects total proven reserve potential of 60,000 barrels of oil and total proven plus probable reserve potential of 90,000 barrels per location.  The Company has three proven undeveloped locations and one probable location booked in the Upper Shaunavon with four to six additional potential locations.

Dollard Facilities
 
At Dollard, Burgess Creek has a 92.58% working interest in the multi-well oil battery located at 13-17-007-19W3.
 
The Company estimates that the capital required to reactivate the 13-17 battery at Dollard is $475,000. The capital would apply to PR IC12 - High Water-Cut Oil Well Program, which would reclassify the oil royalties to fourth tier.
 
Further details on the re-activation program will be available in the data room for parties that sign a confidentiality agreement.
  
Dollard Reserves


GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties as at December 31, 2020 (the “GLJ Report”). As part of the Company’s year-end evaluation, Burgess Creek internally updated the GLJ Report using December 2021 production and GLJ’s price forecast at January 1, 2022 (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using GLJ’s January 1, 2022 forecast pricing.
 
The Company estimates that, as of January 1, 2022, the Dollard property contained remaining proved plus probable reserves of 740,000 barrels of oil, with an estimated net present value of $7.1 million using forecast pricing at a 10% discount.



Dollard LMR
 
As of December 31, 2021, Burgess Creek’s net deemed asset value for Dollard was ($650,670) (deemed assets of $0 and deemed liabilities of $650,670), with an LMR ratio of 0.00.

 
The Dollard property was shut-in in March 2020 due to low commodity prices. Upon re-activation, the Company projects the LMR ratio for Dollard to be 1.63 with net a deemed asset value of $416,114 (deemed assets of $1,073,388 and deemed liabilities of $657,275).
  
Dollard Well List
 
Click here to download the complete well list in Excel.

PROCESS & TIMELINE

Sayer Energy Advisors is accepting cash offers relating to the process until 12:00 pm on Thursday April 7, 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.

Sayer Energy Advisors is accepting cash offers from interested parties until
noon on Thursday April 7, 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 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 Reserve 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 Tom Pavic, Ben Rye or Grazina Palmer at 403.266.6133.

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