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Under Review   /   Signalta Resources Limited



Signalta Resources Limited

Property Divestiture
Bid Deadline: June 30, 2022
12:00 PM
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OVERVIEW

Signalta Resources Limited (“Signalta” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its working interests in certain non-operated natural gas unit located in various areas of Alberta (the “Properties”).
 
Average daily production net to Signalta from the Properties for the month of February 2022 was approximately 390 Mcf/d of natural gas and 30 barrels of natural gas liquids per day (95 boe/d).
 
Operating income net to Signalta from the Properties in February 2022 was approximately $63,000, or $756,000 on an annualized basis.
 
Preference will be given to offers to acquire all of the Properties in one transaction; however, offers may be considered for individual properties.

 
Overview Map Showing the Location of the Divestiture Properties

 
Production Overview

Average daily production net to Signalta from the Properties for the month of February 2022 was approximately 390 Mcf/d of natural gas and 30 barrels of natural gas liquids per day (95 boe/d) as outlined below.

Operating income net to Signalta from the Properties in February 2022 was approximately $63,000, or $756,000 on an annualized basis.

 

 
LMR Summary

Signalta does not operate any wells or facilities associated with the Properties.

Reserves Overview

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.

Signalta estimated that, as of January 1, 2022, the Properties contained remaining proved developed producing reserves of 1.4 Bcf of natural gas and 87,000 barrels of oil and natural gas liquids (322,000 boe), with an estimated net present value of $1.5 million using forecast pricing at a 10% discount.

 

CARSTAIRS ELKTON UNIT

Township 29-30, Range 2-3 W5

Signalta holds a 3.23186% working interest in the Carstairs Elkton Unit operated by Bonavista Energy Corporation.
 
Average daily production net to Signalta from the Carstairs Elkton Unit for the month of February 2022 was 77 Mcf/d of natural gas and 11 barrels of natural gas liquids per day (24 boe/d).
 
Operating income net to Signalta from the Carstairs Elkton Unit in February 2022 was $18,200, or approximately $218,400 on an annualized basis.
 
Signalta also holds a 1.558218% working interest, effective January 1, 2022, in the associated Carstairs Gas Plant. Historical lease operating statements for the natural gas plant represent Signalta holding a 2.29% working interest.

 



Carstairs Elkton Unit
Gross Production Group Plot


 
Carstairs Elkton Unit Marketing

Signalta takes its natural gas in kind from the Carstairs Elkton Unit where it is sold into the Nova Gas Transmission Line at the Harmattan Elkton meter station #166. Natural gas liquids are sold to AltaGas Ltd. on a contract which runs from April 1, 2022 to March 31, 2023.

Carstairs Elkton Unit Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Carstairs Elkton Unit contained remaining proved developed producing reserves of 232 MMcf of natural gas and 27,000 barrels of natural gas liquids (66,000 boe), with an estimated net present value of $318,000 using forecast pricing at a 10% discount.

 


 
Carstairs Elkton Unit LMR

The Company does operate any wells or facilities associated with the Properties.

Carstairs Elkton Unit Well List

Click here to download the complete well list in Excel.

TURNER VALLEY UNIT NO. 7 (GAS CAP)

Township 18-20, Range 2-3 W5

Signalta holds a 3.3315621% working interest in the Turner Valley Unit No. 7 (Gas Cap) operated by Crescent Point Energy Corp.
 
Average daily production net to Signalta from Turner Valley Unit No. 7 (Gas Cap) for the month of February 2022 was approximately 67 Mcf/d of natural gas and 10 barrels of natural gas liquids per day (21 boe/d).
 
Operating income net to Signalta from Turner Valley Unit No. 7 (Gas Cap) in February 2022 was $14,000, or approximately $168,000 on an annualized basis.
 
The Turner Valley Unit No. 7 (Gas Cap) has an associated Turner Valley Compression and Transmission system in which Signalta has a 1.222039% working interest.

 



Turner Valley Unit No. 7 (Gas Cap)
Gross Production Group Plot


 
Turner Valley Unit No. 7 (Gas Cap) Marketing

Natural gas from the Turner Valley Unit No. 7 (Gas Cap) flows to the Shell Canada Limited Jumping Pound Plant. Signalta is paid through a JIB by Crescent Point.


Turner Valley Unit No. 7 (Gas Cap) Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Turner Valley Unit No. 7 (Gas Cap) contained remaining proved developed producing reserves of 260 MMcf of natural gas and 36,000 barrels of natural gas liquids (80,000 boe), with an estimated net present value of $456,000 using forecast pricing at a 10% discount.

 


 
Turner Valley Unit No. 7 (Gas Cap) LMR

The Company does operate any wells or facilities associated with the Properties.


Turner Valley Unit No. 7 (Gas Cap) Well List

Click here to download the complete well list in Excel.

FERRYBANK BELLY RIVER GAS UNIT

Township 44-45, Range 27-28 W4

Signalta holds an 11.3089% working interest in the Ferrybank Belly River Gas Unit operated by Strathcona Resources Ltd.
 
Average daily production net to Signalta from the Ferrybank Belly River Gas Unit for the month of February 2022 was approximately 81 Mcf/d of natural gas and four barrels of natural gas liquids per day (18 boe/d).
 
Operating income net to Signalta from the Ferrybank Belly River Gas Unit in February 2022 was $9,000, or approximately $108,000 on an annualized basis.

 



Ferrybank Belly River Gas Unit
Gross Production Group Plot


 
Ferrybank Belly River Gas Unit Marketing

Signalta takes its natural gas in kind from the Ferrybank Belly River Gas Unit where it is sold into the Nova Gas Transmission Line at the Rimbey Westerose meter station #1949. Natural gas liquids are sold to Keyera Corp. on a contract which runs from April 1, 2022 to March 31, 2023. Signalta is paid for its oil production through a JIB by Strathcona.


Ferrybank Belly River Gas Unit Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Ferrybank Belly River Gas Unit contained remaining proved developed producing reserves of 198 MMcf of natural gas and 7,000 barrels of natural gas liquids (40,000 boe), with an estimated net present value of $125,000 using forecast pricing at a 10% discount.

 


 
Ferrybank Belly River Gas Unit LMR

The Company does operate any wells or facilities associated with the Properties.


Ferrybank Belly River Gas Unit Well List

Click here to download the complete well list in Excel.

KAKWA CARDIUM A UNIT

Township 62-64, Range 5-6 W6

Signalta holds a 0.69864% working interest in the Kakwa Cardium A Unit operated by Cenovus Energy Inc.
 
Average daily production net to Signalta from the Kakwa Cardium A Unit for the month of February 2022 was approximately 55 Mcf/d of natural gas and minor volumes of oil and natural gas liquids per day (10 boe/d).
 
Operating income net to Signalta from the Kakwa Cardium A Unit in January 2022 was $6,500, or approximately $78,000 on an annualized basis.
 
Signalta also holds a 0.69864% working interest in the Kakwa oil battery and natural gas plant associated with the Kakwa Cardium A Unit and Kakwa Main Unit (Gas).

 



Kakwa Cardium A Unit
Gross Production Group Plot


 
Kakwa Cardium A Unit Marketing

Signalta takes its natural gas in kind from the Kakwa Cardium A Unit where it is sold into the Nova Gas Transmission Line at the Musreau Lake meter station #2711. Signalta is paid through a JIB by Cenovus for natural gas liquids.


Kakwa Cardium A Unit Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Kakwa Cardium A Unit contained remaining proved developed producing reserves of 330 MMcf of natural gas and 5,000 barrels of natural gas liquids (60,000 boe), with an estimated net present value of $238,000 using forecast pricing at a 10% discount.

 


 
Kakwa Cardium A Unit LMR

The Company does operate any wells or facilities associated with the Properties.


Kakwa Cardium A Unit Well List

Click here to download the complete well list in Excel.

KAKWA MAIN UNIT (GAS)

Township 12-13, Range 8 W2

Signalta holds an 8.061682% working interest in the Kakwa Main Unit (Gas) operated by Cenovus Energy Inc.
 
Average daily production net to Signalta from the Kakwa Main Unit (Gas) for the month of February 2022 was approximately 39 Mcf/d of natural gas and two barrels of natural gas liquids per day (nine boe/d).
 
Operating income net to Signalta from the Kakwa Main Unit in February 2022 was $5,700, or approximately $68,400 on an annualized basis.
 
Signalta also holds a 0.69864% working interest in the Kakwa oil battery and natural gas plant associated with the Kakwa Cardium A Unit and Kakwa Main Unit (Gas).

 



Kakwa Main Unit (Gas)
Gross Production Group Plot


 
Kakwa Main Unit (Gas) Marketing

Signalta takes its natural gas in kind from the Kakwa Main Unit (Gas) where it is sold into the Nova Gas Transmission Line at the Musreau Lake meter station #2711. Signalta is paid through a JIB by Cenovus for natural gas liquids.


Kakwa Main Unit (Gas) Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Kakwa Main Unit (Gas) contained remaining proved developed producing reserves of 177 MMcf of natural gas and 6,000 barrels of natural gas liquids (36,000 boe), with an estimated net present value of $343,000 using forecast pricing at a 10% discount.

 


 
Kakwa Main Unit (Gas) LMR

The Company does operate any wells or facilities associated with the Properties.


Kakwa Main Unit (Gas) Well List

Click here to download the complete well list in Excel.

BINDLOSS UNIT NO. 1

Township 22-23, Range 3-5 W4

Signalta holds a 1.7870741% working interest in the Bindloss Unit No. 1 operated by TAQA North.
 
Average daily production net to Signalta from Bindloss Unit No. 1 for the month of February 2022 was approximately 30 Mcf/d of natural gas (five boe/d).
 
Operating income net to Signalta from Bindloss Unit No. 1 in February 2022 was $1,500, or approximately $18,000 on an annualized basis.

 



Bindloss Unit No. 1
Gross Production Group Plot


 
Bindloss Unit No. 1 Marketing

Signalta takes its natural gas in kind from the Bindloss Unit No. 1 where it is sold into the Nova Gas Transmission Line at the Bindloss meter station #1002.

Bindloss Unit No. 1 Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Bindloss Unit No. 1 contained remaining proved developed producing reserves of 158 MMcf of natural gas (27,000 boe), with an estimated net present value of $105,000 using forecast pricing at a 10% discount.

 


 
Bindloss Unit No. 1 LMR

The Company does operate any wells or facilities associated with the Properties.

Bindloss Unit No. 1 Well List

Click here to download the complete well list in Excel.

EAST CROSSFIELD UNIT

Township 27-29, Range 29 W4-1 W5

Signalta holds a 0.82398% working interest in the East Crossfield Unit operated by TAQA North.
 
Average daily production net to Signalta from the East Crossfield Unit for the month of February 2022 was approximately 16 Mcf/d of natural gas (three boe/d).
 
Operating income net to Signalta from the East Crossfield Unit in February 2022 was $3,300, or approximately $39,600 on an annualized basis.
 
Signalta also holds a 0.82398% working interest in the associated East Crossfield Unit Plant and gas gathering system. The throughput is based on 0.31%.
 
Signalta has a 0.5567% working interest in the East Crossfield Sulphur Block associated with the Unit which was reclaimed several years ago. Sulphur is now injected through an acid gas injection scheme at the East Crossfield Gas Plant.

 



East Crossfield Unit
Gross Production Group Plot


 
East Crossfield Unit Marketing

Signalta takes its natural gas in kind from the East Crossfield Unit where it is sold into the Nova Gas Transmission Line at the East Crossfield meter station #5101. Signalta is paid through a JIB by TAQA for natural gas liquids.


East Crossfield Unit Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the East Crossfield Unit contained remaining proved developed producing reserves of 11 MMcf of natural gas (2,000 boe), with an estimated net present value of ($37,000) using forecast pricing at a 10% discount.

 


 
East Crossfield Unit LMR

The Company does operate any wells or facilities associated with the Properties.


East Crossfield Unit Well List

Click here to download the complete well list in Excel.

WILLESDEN GREEN VIKING A UNIT NO. 1

Township 41, Range 6-7 W5

Signalta holds a 1.1827% working interest in the Willesden Green Viking A Unit No. 1 operated by Bonavista Energy Corporation.
 
Average daily production net to Signalta from the Willesden Green Viking A Unit No. 1 for the month of February 2022 was approximately two Mcf/d of natural gas and one barrel of oil and natural gas liquids per day (one boe/d).
 
Operating income net to Signalta from the Willesden Green Viking A Unit No. 1 in February 2022 was $2,300, or approximately $27,600 on an annualized basis.

 



Willesden Green Viking A Unit No. 1
Gross Production Group Plot


 
Willesden Green Viking A Unit No. 1 Marketing

Signalta is paid for its natural gas production through a JIB by Surge.


Willesden Green Viking A Unit No. 1 Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Willesden Green Viking A Unit No. 1 contained remaining proved developed producing reserves of 9 MMcf of natural gas and 3,000 barrels of oil and natural gas liquids (5,000 boe), with an estimated net present value of $81,000 using forecast pricing at a 10% discount.

 


 
Willesden Green Viking A Unit No. 1 LMR

The Company does operate any wells or facilities associated with the Properties.


Willesden Green Viking A Unit No. 1 Well List

Click here to download the complete well list in Excel.

PORTAGE GAS UNIT

Township 76-79, Range 16-18 W4

Signalta holds a 2.3059% working interest in the Portage Gas Unit operated by IPC Canada Inc.
 
Average daily production net to Signalta from the Portage Gas Unit for the month of February 2022 was approximately 12 Mcf/d of natural gas (two boe/d).
 
Operating income net to Signalta from the Portage Gas Unit in February 2022 was $800, or approximately $9,600 on an annualized basis.

 



Portage Gas Unit
Gross Production Group Plot


 
Portage Gas Unit Marketing

Signalta is paid for its natural gas production through a JIB by IPC.


Portage Gas Unit Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Portage Gas Unit contained remaining proved developed producing reserves of 21 MMcf of natural gas (4,000 boe), with an estimated net present value of ($11,000) using forecast pricing at a 10% discount.

 


 
Portage Gas Unit LMR

The Company does operate any wells or facilities associated with the Properties.

Portage Gas Unit Well List

Click here to download the complete well list in Excel.

BRAZEAU RIVER GAS UNIT NO. 1

Township 44-46, Range 12-14 W5

Signalta holds a 0.092% working interest in the Brazeau River Gas Unit No. 1 operated by Cenovus Energy Inc.
 
Average daily production net to Signalta from the Brazeau River Gas Unit No. 1 for the month of February 2022 was approximately four Mcf/d of natural gas and minor volumes of condensate per day (one boe/d).
 
Operating income net to Signalta from the Brazeau River Gas Unit No. 1 in February 2022 was $800, or approximately $9,600 on an annualized basis.

 



Brazeau River Gas Unit No. 1
Gross Production Group Plot


 
Brazeau River Gas Unit No. 1 Marketing

Signalta is paid for its natural gas production through a JIB by Cenovus and by Keyera Corp. for its condensate production.


Brazeau River Gas Unit No. 1 Reserves

Signalta prepared an internal reserves evaluation of the Properties specifically for this divestiture (the “Reserve Report”). The Reserve Report is effective January 1, 2022 using Sproule Associates Limited’s April 30, 2022 forecast pricing.
 
Signalta estimated that, as of January 1, 2022, the Brazeau River Gas Unit No. 1 contained remaining proved developed producing reserves of 20 MMcf of natural gas and 1,000 barrels of natural gas liquids (4,000 boe), with an estimated net present value of $15,000 using forecast pricing at a 10% discount.

 


 
Brazeau River Gas Unit No. 1 LMR

The Company does operate any wells or facilities associated with the Properties.


Brazeau River Gas Unit No. 1 Well List

Click here to download the complete well list in Excel.

GILBY NORTH BASAL QUARTZ GAS UNIT

Township 40-41, Range 3-4 W5

Signalta holds a 12.798% working interest in the Gilby North Basal Quartz Gas Unit operated by i3 Energy Canada Ltd.
 
Average daily production net to Signalta from Gilby North Basal Quartz Gas Unit for the month of February 2022 was approximately seven Mcf/d of natural gas (two boe/d).
 
Operating income net to Signalta from the Gilby North Basal Quartz Gas Unit in February 2022 was $1,000, or approximately $12,000 on an annualized basis.

 



Gilby North Basal Quartz Gas Unit
Gross Production Group Plot


 
Gilby North Basal Quartz Gas Unit Marketing

Signalta takes its natural gas in kind from the Gilby North Basal Quartz Gas Unit where it is sold into the Nova Gas Transmission Line at the Gilby meter station #1037. Natural gas liquids are sold to Keyera Corp. on a contract which runs from April 1, 2022 to March 31, 2023.


Gilby North Basal Quartz Gas Unit Reserves

The Gilby North Basal Quartz Gas Unit was evaluated as part of the Company’s year-end reserve evaluation and no reserves were assigned.

 
Gilby North Basal Quartz Gas Unit LMR

The Company does operate any wells or facilities associated with the Properties.

Gilby North Basal Quartz Gas Unit Well List

Click here to download the complete well list in Excel.

JOHNSON GLAUCONITIC B POOL UNIT 2

Township 16, Range 15 W4

Signalta holds a 13.703392% working interest in the Johnson Glauconitic B Pool Unit 2 operated by Torxen Energy Ltd.
 
There is currently no production from the Johnson Glauconitic B Pool Unit 2. The Unit has been shut-in since 2019.

 



Johnson Glauconitic B Pool Unit 2
Gross Production Group Plot


 
Johnson Glauconitic B Pool Unit 2  Reserves

The Johnson Glauconitic B Pool Unit 2 was evaluated as part of the Company’s year-end reserve evaluation and no reserves were assigned.

Johnson Glauconitic B Pool Unit 2 LMR

The Company does operate any wells or facilities associated with the Properties.


Johnson Glauconitic B Pool Unit 2 Well List

Click here to download the complete well list in Excel.

PROCESS & TIMELINE

Sayer Energy Advisors is accepting cash offers to acquire the Properties until 12:00 pm on Thursday June 30, 2022. Preference will be given to offers to acquire all of the Properties in one transaction; however, offers may be considered for individual properties.


 
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.

Sayer Energy Advisors is accepting cash offers from interested parties until
noon on Thursday June 30, 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 (brye@sayeradvisors.com) or fax (403.266.4467).

Included in the confidential information is the following: summary land information, the Reserve Report, most recent net operations summary, and other relevant technical information.

Download Confidentiality Agreement

To receive further information on the Properties please contact Ben Rye, Tom Pavic or Grazina Palmer at 403.266.6133.

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