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Current Offerings   /   MNP Ltd. - Abbey Resources Corporation



MNP Ltd. - Abbey Resources Corporation

Receivership Sale
Bid Deadline: December 15, 2022
12:00 PM
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OVERVIEW

On February 28, 2022, MNP Ltd. was appointed as the receiver (the “Receiver”) of Abbey Resources Corporation (“Abbey” or the “Company”) pursuant to an Order of the Court of Queen’s Bench of Saskatchewan (as at then was). The Receiver has engaged Sayer Energy Advisors to assist it with a sale of all of Abbey’s oil and natural gas properties located in Saskatchewan (the “Properties”). The Receiver has also provided a Sales Solicitation Process document (the “SSP”) outlining the details of the receivership sale. Click here for a copy of the SSP.
 
The Properties are located in the Greater Abbey area of southwestern Saskatchewan. The Properties are situated on Carry the Kettle First Nation, Crown and freehold lands.
 
The Properties in the Greater Abbey area are comprised of distinct operational areas in the Lacadena South, Shackleton, Abbey, Lacadena North, Cramersburg, Miry Bay, and Snipe Lake areas.
 
The Properties provide low-decline shallow natural gas production primarily from the late Cretaceous Milk River, Medicine Hat and Colorado formations.
 
Average daily production net to Abbey from the Properties for the month of August 2022 was approximately 5.7 MMcf/d of natural gas (944 boe/d).
 
Operating income net to Abbey from the Properties for the month of August of 2022 was approximately $401,000 per month, or $4.8 million on an annualized basis.

 
Overview Map Showing Location of Abbey's Properties

 
Production & Financial Overview

Average daily production net to Abbey from the Properties for the month of August 2022 was approximately 5.7 MMcf/d of natural gas (944 boe/d).
 
Operating income net to Abbey from the Properties for the month of August of 2022 was approximately $401,000 per month, or $4.8 million on an annualized basis.

 

*Production from the Miry Bay and Snipe Lake properties is currently shut-in.

 
LMR Summary

As of September 28, 2022, Abbey’s net deemed asset value for the Properties was ($48.4 million) (deemed assets of $31.0 million and deemed liabilities of $79.4 million), with an LMR ratio of 0.39.

 

 
*The Company currently has a $27.7 million deposit in place with the Saskatchewan Ministry of Energy and Resources which is not included in the table above. There is an outstanding security balance owing of approximately $20.7 million.

Cash Flow Forecast

A cash flow forecast of the Properties was prepared for this divestiture (“Cash Flow Forecast”). The Cash Flow Forecast was developed using the currently producing wells as a production base with an effective date of October 1, 2022, using an average of GLJ Ltd., McDaniel & Associates Consultants Ltd., and Sproule Associates Limited forecast pricing as of October 1, 2022.
 
The Cash Flow Forecast estimates that, as of October 1, 2022, the future natural gas production of the Properties to be 13.9 Bcf of natural gas (2.3 million boe), with an estimated net present value of $12.7 million using forecast pricing at a 10% discount rate.

 
Marketing Overview

The Company has a natural gas processing agreement in place with Twin Eagle Resources Management Canada, LLC. The Company has an evergreen transportation agreement with TransGas Limited for transportation of natural gas in each of the operational areas.
 
Natural gas is sold at meters located at:
  • 02-02-023-16W3 in the Lacadena South area,
  • 14-36-020-19W3 in the Shackleton area,
  • 16-29-021-19W3 in the Abbey area,
  • 13-18-022-20W3 in the Cramersburg area,
  • 01-19-022-17W3 in the Lacadena North area; and
  • 16-24-021-19W3 in the Miry Bay area.
Seismic Overview

The Company does not have ownership in any seismic data.

Abbey Well List

Click here to download the complete well list in Excel.

 

GREATER ABBEY AREA

Township 19-25, Range 14-26 W3

In the Greater Abbey area of southwestern Saskatchewan, the Company holds a 100% working interest in approximately 418,300 gross acres of land with 2,348 wells.
 
Average daily production net to Abbey from the Properties for the month of August 2022 was approximately 5.7 MMcf/d of natural gas (944 boe/d).
 
Operating income net to Abbey from the Properties for the month of August of 2022 was approximately $401,000 per month, or $4.8 million on an annualized basis.

 


Greater Abbey, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
The Properties were acquired by Abbey in three separate transactions between 2016 and 2017. The gathering system exists in two sections: the north and south systems. The north system was previously owned by Husky Oil Operations Limited, and the south system was previously owned by Enerplus Corporation.
 
The Company initially filed for creditor protection under the Companies’ Creditors Arrangement Act on August 13, 2021. MNP was initially appointed the Monitor of Abbey, and Sproule was retained by MNP as asset manager of Abbey.
 
Sproule engaged SolutionCorp Inc. to provide a technical assessment of the failure mechanisms that have caused the high rates of corrosion-related failures in the Abbey pipeline gathering system. The following is a map from the Abbey Pipeline Gathering System Technical Assessment authored by SolutionCorp for Sproule.

 
Overview of the Abbey Gathering System

LACADENA SOUTH

Township 21-23, Range 14-18 W3

In the Lacadena South area, the Company holds a 100% working interest in 535 wells.
 
Daily production net to the Company from the Lacadena South property for the month of August 2022 was approximately 1.8 MMcf/d of natural gas (300 boe/d).
 
The Company’s net operating income from Lacadena South for the month of August 2022 was approximately $134,000 per month or $1.6 million on an annualized basis.

 


Lacadena South, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Lacadena South Facilities

At Lacadena South, the Company holds a 100% working interest in a compressor station located at 01-19-022-17W3 with an inlet separator, water storage tanks and water injection. There are two Ariel JGK4 compressor units with Waukesha 5790 GL and Waukesha 7042 GK drivers. Natural gas throughput was 1,750 Mcf/d in July 2022 and the maximum throughput was 3,150 Mcf/d.

Lacadena South Well List

Click here to download the complete well list in Excel.

SHACKLETON

Township 20-22, Range 18-21 W3

In the Shackleton area, the Company holds a 100% working interest in 478 wells.
 
Daily production net to the Company from the Shackleton property for the month of August 2022 was approximately 1.5 MMcf/d of natural gas (244 boe/d).
 
The Company’s net operating income from Shackleton for the month of August 2022 was approximately $117,000 per month or $1.4 million on an annualized basis.

 


Shackleton, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Shackleton Facilities

At Shackleton, the Company holds a 100% working interest in two compressor stations located at 14-36-020-19W3 and 12-26-021-30W3. The 14-36 compressor station has an inlet separator, water storage tanks, and water injection. The single unit is an Ariel JGK4 compressor with a Waukesha L7042GL driver. Natural gas throughput was 1,600 Mcf/d in July 2022 and maximum gas throughput was 3,150 Mcf/d. The 12-26 compressor station has an inlet separator, water storage tanks, and water injection. The single unit is a Gemini D602D compressor with a Caterpillar 3512 driver. The facility is currently suspended and the maximum throughput was 1,750 Mcf/d.


Shackleton Well List

Click here to download the complete well list in Excel.

ABBEY

Township 21-22, Range 19-20 W3

In the Abbey area, the Company holds a 100% working interest in 99 wells.
 
Daily production net to the Company from the Abbey property for the month of August 2022 was approximately 1.3 MMcf/d of natural gas (211 boe/d).
 
The Company’s net operating income from Abbey for the month of August 2022 was approximately $133,000 per month or $1.6 million on an annualized basis.

 


Abbey, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Abbey Facilities

At Abbey, the Company holds a 100% working interest in a compressor station located at 16-29-021-19W3 with an inlet separator, a water storage tank, and water injection. There are two Ariel JGK4 compressor units with Waukesha L5664LT drivers. Natural gas throughput was 1,400 Mcf/d in July 2022 and the maximum throughput was 2,800 Mcf/d.


Abbey Well List

Click here to download the complete well list in Excel.

LACADENA NORTH

Township 22-24, Range 17-19 W3

In the Lacadena North area, the Company holds a 100% working interest in 369 wells.
 
Daily production net to the Company from the Lacadena North property for the month of August 2022 was approximately 618 Mcf/d of natural gas (103 boe/d).
 
The Company’s net operating income from Lacadena North for the month of August 2022 was approximately $32,000 per month or $384,000 on an annualized basis.

 


Lacadena North, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Lacadena North Facilities

At Lacadena North, the Company holds a 100% working interest in a compressor station located at 04-10-023-18W3 with an inlet separator, water storage tanks, and water injection. The single unit is a Gemini Kobelco booster compressor with a Waukesha 7042 driver. Natural gas throughput was 700 Mcf/d in June 2022 and the maximum throughput was 3,500 Mcf/d.

Lacadena North Well List

Click here to download the complete well list in Excel.

CRAMERSBURG

Township 21-23, Range 19-22 W3

In the Cramersburg area of southwestern Saskatchewan, the Company holds a 100% working interest in 489 wells.
 
Daily production net to the Company from the Cramersburg property for the month of August 2022 was approximately 513 Mcf/d of natural gas (86 boe/d).
 
The Company’s net operating income from Cramersburg for the month of August 2022 was approximately $21,000 per month or $252,000 on an annualized basis.

 


Cramersburg, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Cramersburg Facilities

At Cramersburg, the Company holds a 100% working interest in a compressor station located at 13-18-022-20W3 with an inlet separator, water storage tanks, and water injection. The single unit is a Gemini DS604 compressor with a Caterpillar 3516 driver. Natural gas throughput was 700 Mcf/d in July 2022 and the maximum throughput was 3,500 Mcf/d.

Cramersburg Well List

Click here to download the complete well list in Excel.

MIRY BAY

Township 21-23, Range 18-19 W3

In the Miry Bay area, the Company holds a 100% working interest in 134 wells.
 
The Miry Bay property was shut-in in June 2022. The Company’s pipelines have been shut-in as a result of specific pipeline leaks. Two high-risk lines contributed to the shut-in of the greater system. After examination of the gathering system, it is recommended that these two high-risk lines be suspended and capped. This would isolate these two lines from the main group lines associated gathering system and remaining wells.
 
Once the identified lines have been isolated, the balance of the wells and gathering system can return to service with approval from the Saskatchewan Ministry of Energy and Resources. It is proposed that the pipelines be excavated where they enter the main 8” group line location at 15-06-022-18W3 and 13-07-022-18W3. Once exposed, the high-risk laterals will be cut, cleaned out via ‘pigging’, and capped, leaving them in a state to be easily and properly abandoned in the future. On the main gathering line, a very short stub will remain to enable a cap to be welded on and restore pressure integrity. The operations would adhere to proper CSA Z662 procedures to retain the integrity of the group line. It is estimated that the operations would enable approximately 49 wells and the facility at Miry Bay to be returned to production at an expected rate of between 850 Mcf/d to 1.0 MMcf/d of natural gas.

 


Miry Bay, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Miry Bay Facilities

At Miry Bay, the Company holds a 100% working interest in a compressor station located at 16-24-021-19W3 with an inlet separator, a water storage tank, and water injection. The single unit is a Gemini D604 compressor with a Caterpillar 3512 LE driver. The facility is currently suspended and the maximum throughput was 2,450 Mcf/d of natural gas.

Miry Bay Well List

Click here to download the complete well list in Excel.

SNIPE LAKE

Township 23-24, Range 19-21 W3

In the Snipe Lake area, the Company holds a 100% working interest in 239 wells.
 
The Snipe Lake property is currently shut-in.

 


Snipe Lake, Saskatchewan
Gross Production Group Plot of Abbey's Natural Gas Wells


 
Snipe Lake Facilities

At Snipe Lake, the Company holds a 100% working interest in a compressor station located at 13-21-023-19W3 with an inlet separator, a water storage tank, and water injection. There are two units including a Gemini D602.2 compressor with a Caterpillar 3512 driver and a 29.9 booster compressor with a Caterpillar 3412 driver. The facility is currently suspended and the maximum throughput was 700 Mcf/d of natural gas.

Snipe Lake Well List

Click here to download the complete well list in Excel.

MISCELLANEOUS PROPERTY

Township 18-24, Range 18-25 W3

In the Greater Abbey area of southwestern Saskatchewan, the Company holds a 100% working interest in five miscellaneous wells.
 
There is no production from the miscellaneous wells.

 

 
Miscellaneous Facilities

The Company holds a 100% working interest in compressor stations located at Spring Creek and White Bear.
 
At Spring Creek, the facility is a compressor station located at 13-26-021-20W3 with an inlet separator, water storage tanks, and water injection. The single unit is an Ariel JGK4 compressor with a Waukesha L7042GL driver. The facility is currently suspended and the maximum throughput was 2,100 Mcf/d of natural gas.
 
The White Bear facility is a compressor station located at 03-02-023-16W3 with an inlet separator, water storage tanks, and water injection. The single unit is a Gemini D604 compressor with a Caterpillar 3512LE driver. The facility is currently suspended and the maximum throughput was 700 Mcf/d of natural gas.

Miscellaneous Well List

Click here to download the complete well list in Excel.

PROCESS & TIMELINE

Sayer Energy Advisors is accepting offers as outlined in the SSP to acquire the Properties until 12:00 pm on Thursday December 15, 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.

Sayer Energy Advisors is accepting offers as outlined in the SSP from
interested parties until 
noon on Thursday December 15, 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, financial Information, the Cash Flow Forecast 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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