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Under Review / Cardinal Energy Ltd.
Cardinal Energy Ltd.
Property DivestitureBid Deadline: June 15, 2023
12:00 PM
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OVERVIEW
Cardinal Energy Ltd. (“Cardinal” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain non-core oil and natural gas interests located in the Rainier, Forestburg and Wainwright South areas of Alberta (the “Properties”). The Properties consist primarily of operated, high working interest oil production. Cardinal is selling the Properties in order to focus its operations in its core areas.
Average daily production net to Cardinal from the Properties for the first two months of 2023 was approximately 131 barrels of oil per day.
Operating income net to Cardinal from the Properties in the first two months of 2023 averaged approximately $72,000 per month, or $864,000 on an annualized basis.
Average daily production net to Cardinal from the Properties for the first two months of 2023 was approximately 131 barrels of oil per day.
Operating income net to Cardinal from the Properties in the first two months of 2023 averaged approximately $72,000 per month, or $864,000 on an annualized basis.
Overview Map Showing the Location of the Divestiture Properties
Production Overview
Average daily production net to Cardinal from the Properties for the first two months of 2023 was approximately 131 barrels of oil per day as outlined below.
Average daily production net to Cardinal from the Properties for the first two months of 2023 was approximately 131 barrels of oil per day as outlined below.
Operating income net to Cardinal from the Properties in the first two months of 2023 averaged approximately $72,000 per month, or $864,000 on an annualized basis.
Gross Production Group Plot of Cardinal's Oil & Natural Gas Wells
LMR Summary
The LMR for each of the Properties as of March 4, 2023 is summarized below.
The LMR for each of the Properties as of March 4, 2023 is summarized below.
Summary of LMR by Property
Seismic Overview
The Company does not have an interest in any seismic data relating to the Properties.
Reserves Overview
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimated that, as at December 31, 2022, the Properties contained remaining proved plus probable reserves of 507,000 barrels of oil and natural gas liquids and 58 MMcf of natural gas (517,000 boe), with an estimated net present value of $8.0 million using forecast pricing at a 10% discount.
The Company does not have an interest in any seismic data relating to the Properties.
Reserves Overview
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimated that, as at December 31, 2022, the Properties contained remaining proved plus probable reserves of 507,000 barrels of oil and natural gas liquids and 58 MMcf of natural gas (517,000 boe), with an estimated net present value of $8.0 million using forecast pricing at a 10% discount.
RAINIER
Township 16-17, Range 15-16 W4
At Rainier, Cardinal holds a 100% working interest in two sections of land on which there are four wells producing oil from the Mannville Group.
Average daily production net to Cardinal from Rainier for the first two months of 2023 was approximately 34 barrels of oil per day.
Operating income net to Cardinal from Rainier in the first two months of 2023 averaged approximately $27,700 per month, or $333,000 on an annualized basis.
At Rainier, Cardinal holds a 100% working interest in two sections of land on which there are four wells producing oil from the Mannville Group.
Average daily production net to Cardinal from Rainier for the first two months of 2023 was approximately 34 barrels of oil per day.
Operating income net to Cardinal from Rainier in the first two months of 2023 averaged approximately $27,700 per month, or $333,000 on an annualized basis.
Rainier, Alberta
Gross Production Group Plot of Cardinal's Oil and Natural Gas Wells
Rainier Upside
At Rainier, Cardinal has identified two horizontal drilling locations in the Ellerslie Formation of the Lower Mannville Group in Section 04-017-15W4 as shown on the following map.
At Rainier, Cardinal has identified two horizontal drilling locations in the Ellerslie Formation of the Lower Mannville Group in Section 04-017-15W4 as shown on the following map.
The logs below show the target reservoir at Rainier with net pay of approximately six metres.
Cardinal Rainier 100/16-33-016-15W4/0
Ellerslie Formation Type Log
Ellerslie Formation Type Log
Rainier Facilities
At Rainier, Cardinal has a 100% working interest in one multi-well oil battery as outlined below.
At Rainier, Cardinal has a 100% working interest in one multi-well oil battery as outlined below.
Rainier Marketing
The Company trucks its oil from Rainier to its facility at Scots Lake 13-07-16-11W4, from where it is then transferred through a LACT unit to Inter Pipeline Ltd.
Rainier Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimates that, as at December 31, 2022, the Rainier property contained remaining proved plus probable reserves of 118,000 barrels of oil and natural gas liquids and 58 MMcf of natural gas (128,000 boe), with an estimated net present value of $3.2 million using forecast pricing at a 10% discount.
The Company trucks its oil from Rainier to its facility at Scots Lake 13-07-16-11W4, from where it is then transferred through a LACT unit to Inter Pipeline Ltd.
Rainier Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimates that, as at December 31, 2022, the Rainier property contained remaining proved plus probable reserves of 118,000 barrels of oil and natural gas liquids and 58 MMcf of natural gas (128,000 boe), with an estimated net present value of $3.2 million using forecast pricing at a 10% discount.
Rainier LMR as of March 4, 2023
Rainier Well List
Click here to download the complete well list in Excel.
Click here to download the complete well list in Excel.
FORESTBURG
Township 42, Range 13-15 W4
In the Forestburg area, Cardinal holds a 50%-100% working interest in 11.75 sections of land on which there are several wells producing oil and natural gas from the Viking Formation. Water injection was implemented in August 2019 in the well Muirfieldres Killam 00/16-21-042-14W4/0.
Average daily production net to Cardinal from Forestburg for the first two months of 2023 was approximately 44 barrels of oil per day.
Operating income net to Cardinal from Forestburg in the first two months of 2023 averaged approximately $27,600 per month, or $331,000 on an annualized basis.
In the Forestburg area, Cardinal holds a 50%-100% working interest in 11.75 sections of land on which there are several wells producing oil and natural gas from the Viking Formation. Water injection was implemented in August 2019 in the well Muirfieldres Killam 00/16-21-042-14W4/0.
Average daily production net to Cardinal from Forestburg for the first two months of 2023 was approximately 44 barrels of oil per day.
Operating income net to Cardinal from Forestburg in the first two months of 2023 averaged approximately $27,600 per month, or $331,000 on an annualized basis.
Forestburg, Alberta
Gross Production Group Plot of Cardinal's Oil & Natural Gas Wells
The following map outlines the Company’s Viking drilling inventory based on net oil pay on its lands at Forestburg. Cardinal has identified an inventory of over 40 horizontal Viking drilling locations.
Forestburg Facilities
At Forestburg, Cardinal has a 100% working interest in the following facilities.
At Forestburg, Cardinal has a 100% working interest in the following facilities.
Forestburg Marketing
The Company trucks its oil from Forestburg to the Inter Pipeline Ltd. 05-15-038-20W4 Stettler terminal.
Forestburg Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimates that, as at December 31, 2022, the Forestburg property contained remaining proved plus probable reserves of 60,000 barrels of oil, with an estimated net present value of $1.0 million using forecast pricing at a 10% discount.
The Company trucks its oil from Forestburg to the Inter Pipeline Ltd. 05-15-038-20W4 Stettler terminal.
Forestburg Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimates that, as at December 31, 2022, the Forestburg property contained remaining proved plus probable reserves of 60,000 barrels of oil, with an estimated net present value of $1.0 million using forecast pricing at a 10% discount.
Forestburg LMR as of March 4, 2023
Forestburg Well List
Click here to download the complete well list in Excel.
Click here to download the complete well list in Excel.
WAINWRIGHT SOUTH
Township 45-46, Range 5-6 W4
In the Wainwright South area, Cardinal holds various working interests in 3.75 sections of land including a 67.37% working interest in Section 08-046-06W4, a 7.9706238% working interest in the Wainwright Unit No 5 operated by Cenovus Energy Inc., a 27.93845% working interest in the Wainwright Unit No 6 operated by Cenovus and an 86.5469% operated working interest in the Wainwright Unit #15. The Company produces oil and natural gas primarily from the Sparky Formation from several wells.
Average daily production net to Cardinal from Wainwright South for the first two months of 2023 was approximately 53 barrels of oil per day.
The Wainwright Unit No 5 was shut-in from September 2021 until October 2022 and is now producing approximately 100 boe/d of oil gross. The Wainwright Unit No 6 is currently shut-in.
Operating income net to Cardinal from the Wainwright South in the first two months of 2023 averaged approximately $17,000 per month, or $200,400 on an annualized basis.
In the Wainwright South area, Cardinal holds various working interests in 3.75 sections of land including a 67.37% working interest in Section 08-046-06W4, a 7.9706238% working interest in the Wainwright Unit No 5 operated by Cenovus Energy Inc., a 27.93845% working interest in the Wainwright Unit No 6 operated by Cenovus and an 86.5469% operated working interest in the Wainwright Unit #15. The Company produces oil and natural gas primarily from the Sparky Formation from several wells.
Average daily production net to Cardinal from Wainwright South for the first two months of 2023 was approximately 53 barrels of oil per day.
The Wainwright Unit No 5 was shut-in from September 2021 until October 2022 and is now producing approximately 100 boe/d of oil gross. The Wainwright Unit No 6 is currently shut-in.
Operating income net to Cardinal from the Wainwright South in the first two months of 2023 averaged approximately $17,000 per month, or $200,400 on an annualized basis.
Wainwright South, Alberta
Gross Production Group Plot of Cardinal's Oil & Natural Gas Wells
Wainwright South Upside
At Wainwright South, Cardinal has identified infill drilling locations in the Sparky B Formation of the Upper Mannville Group in Section 08-046-06W4.
Three horizontal infill drilling locations are shown in red as well as two horizontal injection wells shown in blue on the following map.
Net Pay thickness in the Sparky B in Section 8 is approximately 2-3 metres.
At Wainwright South, Cardinal has identified infill drilling locations in the Sparky B Formation of the Upper Mannville Group in Section 08-046-06W4.
Three horizontal infill drilling locations are shown in red as well as two horizontal injection wells shown in blue on the following map.
Net Pay thickness in the Sparky B in Section 8 is approximately 2-3 metres.
The Sparky A is also productive in the area. The Sparky B pool has low enough recovery and low water cut to support additional horizontal drilling locations.
The following production plot is an analogous Sparky well WLEC Provost 107/11-07-040-02W2/02.
The following production plot is an analogous Sparky well WLEC Provost 107/11-07-040-02W2/02.
Wainwright South Facilities
At Wainwright South, Cardinal has various working interest in the following facilities.
At Wainwright South, Cardinal has various working interest in the following facilities.
Wainwright South Marketing
The Company trucks its operated oil production from Wainwright South to the CJ Wain B 04-24-048-09W4 oil battery to be cleaned and shipped via the Husky Midstream General Partnership sales oil pipeline.
Wainwright South Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimates that, as at December 31, 2022, the Wainwright South property contained remaining proved plus probable reserves of 329,000 barrels of oil, with an estimated net present value of $3.8 million using forecast pricing at a 10% discount.
The Company trucks its operated oil production from Wainwright South to the CJ Wain B 04-24-048-09W4 oil battery to be cleaned and shipped via the Husky Midstream General Partnership sales oil pipeline.
Wainwright South Reserves
GLJ Ltd. (“GLJ”) prepared an independent reserves evaluation of the Properties (the “GLJ Report”) as part of the Company’s year end reporting. The GLJ Report is effective December 31, 2022 using an average of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited’s January 1, 2023 forecast pricing (“3C Average”).
GLJ estimates that, as at December 31, 2022, the Wainwright South property contained remaining proved plus probable reserves of 329,000 barrels of oil, with an estimated net present value of $3.8 million using forecast pricing at a 10% discount.
Wainwright South LMR as of March 4, 2023
Wainwright South Well List
Click here to download the complete well list in Excel.
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 15, 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 June 15, 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 Properties with the party(ies) submitting the most acceptable proposal(s) 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 (tpavic@sayeradvisors.com) or fax (403.266.4467).Included in the confidential information is the following: summary land information, the GLJ Report, LMR information, most recent net operations summary and other relevant technical information.
Download Confidentiality Agreement
To receive further information on the Properties please contact Tom Pavic, Ben Rye or Sydney Birkett at 403.266.6133.