Fee Title & Royalty Divestiture
Bid Deadline: 10/8/2020 12:00 PM
Burgess Creek Exploration Inc. (“Burgess Creek” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its Gross Overriding Royalty (“GOR”) interests as well as its Fee Title interests (“Fee Title”) in a number of areas of southeastern Saskatchewan (the “Properties”).
The Properties include 1,617 net acres of Fee Title land as well as additional 6,208 net overriding royalty acres. The Fee Title lands are located in the following designated pool areas: Northgate (880 net acres), Bellegarde (552 net acres), Nottingham (80 net acres) Queensdale East (65 net acres) and Sherwood (40 net acres) areas. Approximately 75% of the 1,617 total net Fee Title acres are deemed producing.
Where leases are currently not in place, the Company will reserve the right to have the purchaser lease the Fee Title lands to Burgess Creek with a lessor overriding royalty (“LOR”) of 15%. If this LOR were in place in 2019 across all Fee Title lands, the total Fee Title income is estimated to have been $520,000 to the lessor. The GOR interests reside in the Northgate and Queensdale pools in southeastern Saskatchewan and cumulatively cash flowed approximately $226,000 net to Burgess Creek in 2019. When denoting net acreage, wells and production, such values have been netted down to reflect either a partial mineral interest, a partial/pooled working interest, or both.
Burgess Creek contracted GLJ Petroleum Consultants Ltd. (“GLJ”) to complete a corporate reserves review with an effective date of December 31, 2019 (the “GLJ Report”). Burgess Creek management modified the GLJ Report to reflect the Properties that are available for sale (the “Internal Reserves Report”) using GLJ’s price forecast as at July 1, 2020. The Internal Reserves Report has an effective date of July 1, 2020 and utilizes updated production and capital results to the effective date.
Burgess Creek estimates that, as of July 1, 2020, the Properties contained gross proved plus probable reserves of 3.9 million boe, with an estimated net present value of $7.1 million using forecast pricing at a 10% discount.
Summary of Reserves by Property
Burgess Creek Well List