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Under Review   /   Prairie Thunder Resources Ltd.



Prairie Thunder Resources Ltd.

Property Divestiture
Bid Deadline: November 16, 2023
12:00 PM
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OVERVIEW

Prairie Thunder Resources Ltd. (“Prairie Thunder” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of its oil and natural gas interests located in the Wapiti and Berland River areas of Alberta (the “Properties”).

Average daily production net to Prairie Thunder from the Properties for the month of July 2023 was approximately 1,195 boe/d, consisting of 859 barrels of oil and natural gas liquids per day and 2.0 MMcf/d of natural gas.

Operating income net to Prairie Thunder from the Properties for the first half of 2023 averaged approximately $1.0 million per month, or $12.0 million on an annualized basis.

As of October 7, 2023, the Properties had a deemed net asset value of $16.4 million (deemed assets of $18.2 million and deemed liabilities of $1.8 million), with an LMR ratio of 10.35.
 
Overview Map Showing the Location of the Divestiture Properties

The Properties include current oil and natural gas production from the Cardium Formation along with an extensive land base with Cardium P&NG rights for further development of the Cardium.

The following plat shows the position of the Properties which are situated on trend with several Cardium pools with current and past productive Cardium wells shown in red.
 

LMR Summary

The LMR for each of the Properties as of October 7, 2023 is summarized below.

Summary of LMR by Property

 
As of October 7, 2023, the Properties had a deemed net asset value of $16.4 million (deemed assets of $18.2 million and deemed liabilities of $1.8 million), with an LMR ratio of 10.35.

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 2.2 million barrels of oil and natural gas liquids and 4.3 Bcf of natural gas (2.9 million boe), with an estimated net present value of $29.4 million using forecast pricing at a 10% discount.



 

WAPITI

Township 66-68, Range 7-9 W6

At Wapiti, Prairie Thunder holds various working interests in 18 sections of land. Prairie Thunder has joint interests with Whitecap Resources Inc. as operator in three wells with an 11.34% working interest and four wells with a 65% working interest. In addition, Prairie Thunder drilled six horizontal wells from two well pads at 13-19-067-08W6 and 09-22-067-08W6 in which it holds a 100% working interest.

Average daily production net to Prairie Thunder from Wapiti for the month of July 2023 was approximately 1,183 boe/d, consisting of 847 bbl/d of oil and natural gas liquids and 2.0 MMcf/d of natural gas.

Operating income net to Prairie Thunder from Wapiti in the first half of 2023 averaged approximately $1.0 million, or $12.0 million on an annualized basis.


Wapiti, Alberta – Gross Production Group Plot of Prairie Thunder’s
Oil & Natural Gas Wells

Wapiti Upside

The Company believes additional wells can be drilled on its lands at Wapiti. The following well logs from the well Husky Et Al Wapiti 00/14-30-067-08W6/00 show the thick sandstone reservoir of the Cardium Formation at Wapiti.

Husky Et Al Wapiti 00/14-30-067-08W6/00 – Cardium Formation Type Log

 
The following plat shows offsetting Cardium pools with current and past productive Cardium wells shown in red.


Wapiti Facilities
 

At Wapiti, Prairie Thunder has a 100% working interest in the following facilities.
  • 09-22-067-08W6 Pad Site Facility
  • VRU system installed with a 50 HP motor and Gardner Denver 4.6 VI compressor
  • 2.7 MMBTU/hr line heater
  • 4 – 1000 bbl tanks in containment
    • 1 produced emulsion separation tank
    • 2 sales oil tanks
    • 1 produced water tank
  • 150 KW Genset Cat G3406
  • 42” Group and 30” test separator
  • 13-19-067-08W6 Pad Site Facility
  • Instrument air operated facility
  • VRU system installed with a 30 HP motor and Gardner Denver E12DGT compressor
  • 3.5 MMBTU line heater
  • 4 – 1000 bbl tanks in containment
    • 1 produced emulsion separation tank
    • 2 sales oil tanks
    • 1 produced water tank
  • 145 HP Cat G3306B Sales gas compressor – rental unit
  • 135 KW Genset
  • 36” Group and 30” test separator
  • Sales oil pump
Wapiti Marketing

Prairie Thunder’s operated oil production from Wapiti is currently trucked from the 09-22-067-08W6 pad site to Cenovus Energy Inc.’s facility at 10-14-067-08W6. Natural gas is connected to the Canadian Natural Resources Limited South Wapiti natural gas plant via Cenovus’ facility at 10-14-067-08W6.

Seismic Overview

The Company does not have an interest in any seismic data relating to its interests at Wapiti.

Wapiti 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 Wapiti property contained remaining proved plus probable reserves of 2.2 million barrels of oil and natural gas liquids and 4.3 Bcf of natural gas (2.9 million boe), with an estimated net present value of $29.1 million using forecast pricing at a 10% discount.



Wapiti LMR as of October 7, 2023

As of October 7, 2023, the Wapiti property had a deemed net asset value of $16.1 million (deemed assets of $17.5 million and deemed liabilities of $1.4 million), with an LMR ratio of 12.11.


Wapiti Well List

Click here to download the complete well list in Excel.
 

BERLAND RIVER

Township 58-60, Range 24-27 W5

At Berland River, Prairie Thunder holds various working interests in 30 sections of land. Current production from the property is from the Cardium Formation in the well PTRL BerlRW 00/05-06-059-24W5/00. The Company’s working interest in the 05-06-059-24W5 well is 80% before payout, 50% after payout.

Average daily production net to Prairie Thunder from Berland River for month of July 2023 was approximately 12 bbl/d of oil.

Operating income net to Prairie Thunder from Berland River for the first half of 2023 averaged approximately ($6,900) per month, or ($83,000) on an annualized basis. Production was shut-in in February 2023 for a workover which negatively impacted operating cash flow for the first six months of 2023.



Berland River, Alberta – Gross Production Group Plot of Prairie Thunder’s
Oil and Natural Gas Wells

 
The well KXL Hz Leland 00/13-02-060-26W5/00 drilled by Enerplus Corporation was rig released in January 2012 and produced a total of 29,733 barrels of oil and 69 MMcf of natural gas from the Cardium Formation until it was suspended in 2015.

The well KXL Hz Leland 00/04-25-059-26W5/02 was drilled by Enerplus and rig released in March 2012 and produced a total of 15,151 barrels of oil and 15 MMcf of natural gas from the Cardium Formation until it was suspended in 2015.

The well PTRL BerlRW 00/05-06-059-24W5/00 was drilled by Mancal Energy Inc. and rig released in December 2019. Prairie Thunder completed the well and earned in on the remaining lands.

Berland River Upside

The Company believes additional wells can be drilled on its lands at Berland River. The following plat shows offsetting Cardium pools with current and past productive Cardium wells shown in red.


 

Berland River Marketing

Oil from Berland River is trucked to the Secure Energy Services Inc. Fox Creek terminal located at 12-36-062-20W5.

Seismic Overview

The Company does not have an interest in any seismic data relating to its interests at Berland River.

Berland River 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 Berland River property contained remaining proved plus probable reserves of 11,000 barrels of oil, with an estimated net present value of $313,000 using forecast pricing at a 10% discount.


Berland River LMR as of October 7, 2023

As of October 7, 2023, the Berland River property had a deemed net asset value of $333,324 (deemed assets of $640,418 and deemed liabilities of $307,094), with an LMR ratio of 2.09.
 

Berland River 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 November 16, 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.

Sayer Energy Advisors is accepting cash offers from interested parties
until noon on Thursday, November 16, 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 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 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 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 Ben Rye, Tom Pavic or Sydney Birkett at 403.266.6133.
 
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