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Properties / Vande Water Management Corp.
Vande Water Management Corp.
Water Disposal DivestitureBid Deadline: May 12, 2022
12:00 PM
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OVERVIEW
Vande Water Management Corp. (“Vande” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of its water injection project in the Grande Prairie area of Alberta (the “Project”).
Overview Map Showing Location of the Project
GRANDE PRAIRIE PROJECT
Township 69, Range 6 W6
Vande holds a 100% working interest in a water disposal project strategically located in a highly developed area approximately 19 kilometres south of Grande Prairie. The Project has all season access from major roads and is ready for completion and construction of an injection facility.
The Project consists of an existing vertical disposal well located at 100/07-25-069-06W6/0 and a monitoring/injection well at 100/16-24-069-06W6/0. The disposal well is designed for water injection into the Cardium Formation. Vande owns the mineral rights in the Cardium Formation in Section 25-069-06W6.
Vande holds a 100% working interest in a water disposal project strategically located in a highly developed area approximately 19 kilometres south of Grande Prairie. The Project has all season access from major roads and is ready for completion and construction of an injection facility.
The Project consists of an existing vertical disposal well located at 100/07-25-069-06W6/0 and a monitoring/injection well at 100/16-24-069-06W6/0. The disposal well is designed for water injection into the Cardium Formation. Vande owns the mineral rights in the Cardium Formation in Section 25-069-06W6.
The 07-25 injection well
is licensed and able to accept Class II and Class Ib waste fluids. The well was
previously approved for a total inlet rate of a maximum of 864 m3/d
of water.
The 07-25 well was originally drilled in December 2006 and completed in the Dunvegan Formation. The 16-24 Cardium monitoring well is 0.78 kilometres away from the 07-25 well and was also completed in the Dunvegan Formation. The monitoring well is also a good candidate for 500 m3/d injection which can be implemented when the injection facility can warrant additional capacity.
The drilling and completions activity in this area has created a high demand for water disposal. The Project would prevent operators from hauling fluid long distances for disposal.
The Project is centered in an area with an extremely high demand for disposal. Fluid production in the area is primarily from the Montney Formation. This suggests a large amount of potential for third party water disposal.
The viability of the Cardium Formation for water disposal is supported by favourable reservoir characteristics, parameters, reservoir confinement, absence of hydrocarbons from nearby production and the aerial extent of the Cardium aquifer.
The Company has identified the Cardium Formation at Grande Prairie as having 18% average porosity over 12 metres of thickness at a depth of 793.8 to 810.0 metres in the 07-25 well. The Cardium sandstone is a coarsening upward sand sequence dominated by quartz, with lower and upper shoreface deposition.
The Cardium Formation is water saturated and there are no offsetting producing Cardium wells within the predicted zone. The nearest Cardium oil production is 35 miles to the south west at Wapiti.
The Cardium zone is confined by an impermeable cap and base rock. Vertical confinement is assured by the underlain shales of the Kaskapau and the tight sands and interbedded shales of the Cardium zone along with the overlain shales of the Muskiki formations. The general structure dips in a south direction at 17 metres per mile.
Based on a projected injection rate of 21 m3/hr over a 20-year period, Vande calculated the area of influence for the 07-25 well to be 0.736 kilometres for Class Ib disposal.
There are several offsetting Cardium injection wells which indicate the disposal capability including the well Tervita Elm 102/11-18-069-05W6/3, as shown below.
The 02/11-18 well injected approximately 146,840 bbl (23,334 m3) of water into the Cardium Formation in January 2022. The 02/11-18 well has cumulative injection of 7.6 million barrels (1.2 million m3) of water to date.
The drilling and completions activity in this area has created a high demand for water disposal. The Project would prevent operators from hauling fluid long distances for disposal.
The Project is centered in an area with an extremely high demand for disposal. Fluid production in the area is primarily from the Montney Formation. This suggests a large amount of potential for third party water disposal.
The viability of the Cardium Formation for water disposal is supported by favourable reservoir characteristics, parameters, reservoir confinement, absence of hydrocarbons from nearby production and the aerial extent of the Cardium aquifer.
The Company has identified the Cardium Formation at Grande Prairie as having 18% average porosity over 12 metres of thickness at a depth of 793.8 to 810.0 metres in the 07-25 well. The Cardium sandstone is a coarsening upward sand sequence dominated by quartz, with lower and upper shoreface deposition.
The Cardium Formation is water saturated and there are no offsetting producing Cardium wells within the predicted zone. The nearest Cardium oil production is 35 miles to the south west at Wapiti.
The Cardium zone is confined by an impermeable cap and base rock. Vertical confinement is assured by the underlain shales of the Kaskapau and the tight sands and interbedded shales of the Cardium zone along with the overlain shales of the Muskiki formations. The general structure dips in a south direction at 17 metres per mile.
Based on a projected injection rate of 21 m3/hr over a 20-year period, Vande calculated the area of influence for the 07-25 well to be 0.736 kilometres for Class Ib disposal.
There are several offsetting Cardium injection wells which indicate the disposal capability including the well Tervita Elm 102/11-18-069-05W6/3, as shown below.
The 02/11-18 well injected approximately 146,840 bbl (23,334 m3) of water into the Cardium Formation in January 2022. The 02/11-18 well has cumulative injection of 7.6 million barrels (1.2 million m3) of water to date.
The following map shows wells licensed in the last two years in green and wells drilled in the last two years in red. Active producers in the area include Hammerhead Resources Inc., NuVista Energy Ltd., Ovintiv Canada ULC, Paramount Resources Ltd., Pipestone Energy Corp., Prairie Thunder Resources Ltd., Ridgeback Resources Inc., Spartan Delta Corp., Tourmaline Oil Corp., and Whitecap Resources Inc.
Project Development
Vande anticipates that the Project could be up and running within three months. The necessary steps to get the Project operational would be to first perform a re-completion on the 07-25 disposal well and carry out injection test requirements for D51 submission.
Following this, mechanical and electrical drawing packages construction and installation of equipment will be completed as listed on the Plot Plan/Process Flow Diagram which is available in the confidential virtual data room for review by parties that execute a confidentiality agreement.
Total costs associated with the startup of the disposal facility are estimated to be approximately $3.5 million with $3.25 million in remaining required capital. Vande is forecasting operating cash flow of approximately $2.6 million per year based on projected third-party daily disposal volumes of 600 m3/d and a disposal fee of $14.70/m3.
Well List
Click here to download the complete well list in Excel.
Vande anticipates that the Project could be up and running within three months. The necessary steps to get the Project operational would be to first perform a re-completion on the 07-25 disposal well and carry out injection test requirements for D51 submission.
Following this, mechanical and electrical drawing packages construction and installation of equipment will be completed as listed on the Plot Plan/Process Flow Diagram which is available in the confidential virtual data room for review by parties that execute a confidentiality agreement.
Total costs associated with the startup of the disposal facility are estimated to be approximately $3.5 million with $3.25 million in remaining required capital. Vande is forecasting operating cash flow of approximately $2.6 million per year based on projected third-party daily disposal volumes of 600 m3/d and a disposal fee of $14.70/m3.
Well List
Click here to download the complete well list in Excel.
PROCESS & TIMELINE
Sayer Energy Advisors is accepting cash offers relating to this process until 12:00 pm on Thursday May 12, 2022.
Sayer Energy Advisors does not conduct a "second-round" bidding process; the intention is to attempt to conclude a
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 cash offers from interested parties until
noon on Thursday May 12, 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.
acceptable proposal and we will then work with that party to attempt to meet our client’s threshold value.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.
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 (brye@sayeradvisors.com) or fax (403.266.4467).
Included in the confidential information is the following: summary land information, facility plot plan and process flow diagram, permit applications and approvals, budget forecasts, and other relevant technical information.
Download Confidentiality Agreement
To receive further information on the Project please contact Ben Rye, Tom Pavic or Sydney Birkett at 403.266.6133.