Offering Details
Back
Under Review / FTI Consulting Canada Inc. - Changhua Energy Canada Ltd.
FTI Consulting Canada Inc. - Changhua Energy Canada Ltd.
Receivership SaleBid Deadline: April 13, 2023
12:00 PM
Download Full PDF - Printable
OVERVIEW
On December 7, 2022, FTI Consulting Canada Inc. was appointed as receiver and manager (the “Receiver”) of the assets of Changhua Energy Canada Ltd. (“Changhua” or the “Company”) pursuant to an Order of the Court of King’s Bench of Alberta. The Receiver has engaged Sayer Energy Advisors to assist it with a sale of all of Changhua’s oil and natural gas interests located in Alberta (the “Property”).
The Property is located in the Peco area of Alberta and consists of primarily oil production from the Cardium and Rock Creek formations.
Average daily sales production net to Changhua from the Property for the month of January 2023 was approximately 30 barrels of oil per day.
Forecasted net operating income from the Property for 2023 is estimated to be approximately $780,000.
The Property is located in the Peco area of Alberta and consists of primarily oil production from the Cardium and Rock Creek formations.
Average daily sales production net to Changhua from the Property for the month of January 2023 was approximately 30 barrels of oil per day.
Forecasted net operating income from the Property for 2023 is estimated to be approximately $780,000.
Overview Map Showing Location of Changhua's Property
PECO
Township 48, Range 14-15 W5
At Peco, the Company holds a 60%-100% operated working interest in 7.5 sections of land. Current production at Peco is from the wells Changhua Ergy Peco 00/16-36-048-15W5/03 and Changhua Ergy Peco 00/16-25-048-15W5/00. Production consists of oil from the Cardium and Rock Creek formations. Additional potential exists in the Belly River and Rock Creek formations.
Average daily sales production net to Changhua from the Property for the month of January 2023 was approximately 30 barrels of oil per day.
Forecasted net operating income from the Property for 2023 is estimated to be approximately $780,000.
At Peco, the Company holds a 60%-100% operated working interest in 7.5 sections of land. Current production at Peco is from the wells Changhua Ergy Peco 00/16-36-048-15W5/03 and Changhua Ergy Peco 00/16-25-048-15W5/00. Production consists of oil from the Cardium and Rock Creek formations. Additional potential exists in the Belly River and Rock Creek formations.
Average daily sales production net to Changhua from the Property for the month of January 2023 was approximately 30 barrels of oil per day.
Forecasted net operating income from the Property for 2023 is estimated to be approximately $780,000.
Peco, Alberta
Gross Production Group Plot of Changhua's Oil Wells
The Property is offset by oil and natural gas production from several reservoirs including the Basal Belly River, Edmonton, Gething, Notikewin and Rock Creek formations.
The following map shows offsetting production by various operators in the area including Bonavista Energy Corporation, Cenovus Energy Inc., Obsidian Energy Ltd., Peyto Exploration & Development Corp., Westbrick Energy Ltd. and West Lake Energy Corp., through its wholly owned subsidiary Boulder Energy Ltd.
The following map shows offsetting production by various operators in the area including Bonavista Energy Corporation, Cenovus Energy Inc., Obsidian Energy Ltd., Peyto Exploration & Development Corp., Westbrick Energy Ltd. and West Lake Energy Corp., through its wholly owned subsidiary Boulder Energy Ltd.
Directly south of the Company’s lands, West Lake’s Basal Belly River pool consists of a 350-metre thick, stacked channel system that offers multiple drilling locations and reservoir targets. West Lake has identified potential to increase reserve recovery through enhanced oil recovery programs. The previous operator drilled over 100 horizontal wells into the Belly River since the beginning of 2012.
The primary focus was drilling horizontal wells within the Upper C, Upper D and Middle G sands, initially with offset spacing of 400 metres and 40 tonne/stage fracs but completions evolved to the current offset spacing of 300 metres and 20 tonne/stage fracs. Additional wells have been successfully placed in the Basal C, Basal A and Upper F zones.
Peco Upside
The Property is divided by the Red Deer River with Sections 35 and 36-048-15W5 located on the north side of the river. On the north side of the Property, Changhua believes the 02-35-048-15W5 well could be reactivated as it is currently suspended due to a seized pump. The Company believes the well is capable of oil production at a rate of approximately three barrels of oil per day.
On the south end of the Property, there is a suspended natural gas pipeline owned by Boulder, which if reactivated, could accommodate production from the wells south of the river. Alternatively, the Company believes that there is potential to construct a gathering system to collect and tie-in the associated natural gas production.
The Company also believes the 14-22-048-15W5 well has potential for reactivation. The well had a new casing bowl fitted in the summer of 2022. There is a wellhead, pumpjack and a compressor currently on site.
The Property is situated on the western edge of the carbon sequestration evaluation permit held by Tidewater Midstream and Infrastructure Ltd. for the Wabamun zone which spans 1.2 million acres from Township 047-06W5 to 052-14W5.
Peco Facilities
The Company does not operate any facilities at Peco.
A list of Changhua’s equipment is available in the virtual data room for parties that execute a confidentiality agreement.
Peco LMR
As of February 4, 2023, Changhua’s net deemed asset value for the Peco property was $1.3 million (deemed assets of $2.1 million and deemed liabilities of $753,028), with an LMR ratio of 2.77.
Peco Marketing
At Peco, crude oil is trucked to the Secure Energy Services Inc. Elk River facility at 11-03-047-11W5 where Changhua sells its oil through Trafigura Canada General Partnership.
Peco Reserves
The Company does not have a third-party reserve evaluation of the Property.
Peco Well List
Click here to download the complete well list in Excel.
PROCESS & TIMELINE
Sayer Energy Advisors is accepting cash offers to acquire the Property until 12:00 pm on Thursday April 13, 2023.
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 April 13, 2023.
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.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.
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, most recent net operations summary, LMR information and other relevant technical information.
Download Confidentiality Agreement
To receive further information on the Property please contact Ben Rye, Tom Pavic or Sydney Birkett at 403.266.6133.