Offering Details
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Current Offerings / CLEO Energy Corp.
CLEO Energy Corp.
Property DivestitureBid Deadline: June 27, 2024
12:00 PM
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OVERVIEW
CLEO Energy Corp. (“CLEO” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain of its non-core oil and natural gas interests located in the Alliance, Atlee and Fabyan areas of Alberta (the “Properties”).
Average daily sales production net to CLEO from the Properties for the fourth quarter of 2023 was approximately 409 boe/d, consisting of approximately 2.2 MMcf/d of natural gas and 47 bbl/d of oil and natural gas liquids. Current production from the Properties is approximately 506 boe/d, consisting of 2.5 MMcf/d of natural gas and 87 bbl/d of oil and natural gas liquids after recent re-activations done by CLEO at Atlee.
Operating income net to CLEO from the Properties for the fourth quarter of 2023 was approximately $118,000. Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
At Fabyan, CLEO controls all of the pipeline infrastructure in the area necessary for both oil development and associated natural gas egress. The area has significant offsetting potential including the Viking and Upper Mannville Sparky oil reservoirs, which would require use of the Company’s pipeline infrastructure.
As of April 3, 2024, the Properties had a deemed net asset value of $1.1 million (deemed assets of $14.2 million and deemed liabilities of $13.1 million), with an LMR ratio of 1.08.
Average daily sales production net to CLEO from the Properties for the fourth quarter of 2023 was approximately 409 boe/d, consisting of approximately 2.2 MMcf/d of natural gas and 47 bbl/d of oil and natural gas liquids. Current production from the Properties is approximately 506 boe/d, consisting of 2.5 MMcf/d of natural gas and 87 bbl/d of oil and natural gas liquids after recent re-activations done by CLEO at Atlee.
Operating income net to CLEO from the Properties for the fourth quarter of 2023 was approximately $118,000. Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
At Fabyan, CLEO controls all of the pipeline infrastructure in the area necessary for both oil development and associated natural gas egress. The area has significant offsetting potential including the Viking and Upper Mannville Sparky oil reservoirs, which would require use of the Company’s pipeline infrastructure.
As of April 3, 2024, the Properties had a deemed net asset value of $1.1 million (deemed assets of $14.2 million and deemed liabilities of $13.1 million), with an LMR ratio of 1.08.
Overview Map Showing the Location of the Divestiture Properties
Production Overview
Average daily sales production net to CLEO from the Properties for the fourth quarter of 2023 was approximately 409 boe/d, consisting of approximately 2.2 MMcf/d of natural gas and 47 bbl/d of oil and natural gas liquids. Current production from the Properties is approximately 506 boe/d, consisting of 2.5 MMcf/d of natural gas and 87 bbl/d of oil and natural gas liquids after recent re-activations done by CLEO at Atlee.
Operating income net to CLEO from the Properties for the fourth quarter of 2023 was approximately $118,000. Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
Average daily sales production net to CLEO from the Properties for the fourth quarter of 2023 was approximately 409 boe/d, consisting of approximately 2.2 MMcf/d of natural gas and 47 bbl/d of oil and natural gas liquids. Current production from the Properties is approximately 506 boe/d, consisting of 2.5 MMcf/d of natural gas and 87 bbl/d of oil and natural gas liquids after recent re-activations done by CLEO at Atlee.
Operating income net to CLEO from the Properties for the fourth quarter of 2023 was approximately $118,000. Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
*CLEO’s current production at Atlee is approximately 134 boe/d, consisting of 441 Mcf/d of natural
gas and 60 bbl/d of oil with forecasted twelve-month NOI of approximately $650,000.
Gross Production Group Plot of CLEO's Oil & Natural Gas Wells
LMR Summary
As of April 3, 2024, the Properties had a deemed net asset value of $1.1 million (deemed assets of $14.2 million and deemed liabilities of $13.1 million), with an LMR ratio of 1.08.
As of April 3, 2024, the Properties had a deemed net asset value of $1.1 million (deemed assets of $14.2 million and deemed liabilities of $13.1 million), with an LMR ratio of 1.08.
Seismic Overview
The Company has a license agreement on certain trade 2D seismic data relating to the Fabyan property. Information relating to the seismic will be made available in the data room to parties that execute a confidentiality agreement.
Reserves Overview
Deloitte LLP (“Deloitte”) prepared an independent reserves evaluation of CLEO’s Properties (the “Deloitte Report”) as part of the Company’s year-end reporting. The Deloitte Report is effective December 31, 2022 using Deloitte’s January 1, 2023 forecast pricing. The Company does not have a current third-party reserve report reflecting the recent disposition of certain of its interests at Fabyan.
Deloitte estimated that, as at December 31, 2022 the Properties excluding CLEO’s interests at Fabyan contained remaining proved plus probable reserves of 646 MMcf of natural gas and 194,000 barrels of oil and natural gas liquids (302,000 boe), with an estimated net present value of $3.2 million using forecast pricing at a 10% discount.
The Company has a license agreement on certain trade 2D seismic data relating to the Fabyan property. Information relating to the seismic will be made available in the data room to parties that execute a confidentiality agreement.
Reserves Overview
Deloitte LLP (“Deloitte”) prepared an independent reserves evaluation of CLEO’s Properties (the “Deloitte Report”) as part of the Company’s year-end reporting. The Deloitte Report is effective December 31, 2022 using Deloitte’s January 1, 2023 forecast pricing. The Company does not have a current third-party reserve report reflecting the recent disposition of certain of its interests at Fabyan.
Deloitte estimated that, as at December 31, 2022 the Properties excluding CLEO’s interests at Fabyan contained remaining proved plus probable reserves of 646 MMcf of natural gas and 194,000 barrels of oil and natural gas liquids (302,000 boe), with an estimated net present value of $3.2 million using forecast pricing at a 10% discount.
FABYAN
Township 41-46, Range 6-11 W4
At Fabyan, CLEO holds largely a 100% working interest in approximately 120 sections of land. Production at Fabyan is primarily shallow natural gas from the Viking Formation.
Average daily production net to CLEO from Fabyan for the fourth quarter of 2023 was approximately 358 boe/d, consisting of 2,078 Mcf/d of natural gas and 12 bbl/d oil and natural gas liquids.
Operating income net to CLEO from Fabyan for the fourth quarter of 2023 was approximately $94,000.
At Fabyan, CLEO holds largely a 100% working interest in approximately 120 sections of land. Production at Fabyan is primarily shallow natural gas from the Viking Formation.
Average daily production net to CLEO from Fabyan for the fourth quarter of 2023 was approximately 358 boe/d, consisting of 2,078 Mcf/d of natural gas and 12 bbl/d oil and natural gas liquids.
Operating income net to CLEO from Fabyan for the fourth quarter of 2023 was approximately $94,000.
Fabyan, Alberta
Gross Production Group Plot
Infrastructure
CLEO controls all of the pipeline infrastructure in the area necessary for both oil development and associated natural gas egress. The area has significant offsetting potential including the Viking and Upper Mannville Sparky oil reservoirs, which would require use of the Company’s pipeline infrastructure.
Further details relating to CLEO’s pipeline infrastructure will be available in the virtual data room for parties that execute a confidentiality agreement.
Fabyan Facilities
CLEO does not have ownership in any facilities at Fabyan. The Company has a natural gas processing and handling agreement in place with Durham Creek Energy Ltd. under which CLEO’s natural gas is processed at the Fabyan 06-08-045-07W4 natural gas plant for a handling charge of $0.55/Mcf.
Fabyan Marketing
Oil from Fabyan is trucked to Secure Energy Services Inc.’s Kerrobert Terminal at 08-34-033-22W3 and sold to Secure.
Natural gas from Fabyan is sold to BP Canada Energy Group ULC at the Nova Gas Transmission Ltd. pipeline.
Fabyan Reserves
The Company does not have a current third-party reserve report reflecting the recent disposition of certain of its interests at Fabyan.
Fabyan LMR as of April 3, 2024
As of April 3, 2024, the Fabyan property had a deemed net asset value of ($840,242) (deemed assets of $11.2 million and deemed liabilities of $12.0 million), with an LMR ratio of 0.93.
CLEO controls all of the pipeline infrastructure in the area necessary for both oil development and associated natural gas egress. The area has significant offsetting potential including the Viking and Upper Mannville Sparky oil reservoirs, which would require use of the Company’s pipeline infrastructure.
Further details relating to CLEO’s pipeline infrastructure will be available in the virtual data room for parties that execute a confidentiality agreement.
Fabyan Facilities
CLEO does not have ownership in any facilities at Fabyan. The Company has a natural gas processing and handling agreement in place with Durham Creek Energy Ltd. under which CLEO’s natural gas is processed at the Fabyan 06-08-045-07W4 natural gas plant for a handling charge of $0.55/Mcf.
Fabyan Marketing
Oil from Fabyan is trucked to Secure Energy Services Inc.’s Kerrobert Terminal at 08-34-033-22W3 and sold to Secure.
Natural gas from Fabyan is sold to BP Canada Energy Group ULC at the Nova Gas Transmission Ltd. pipeline.
Fabyan Reserves
The Company does not have a current third-party reserve report reflecting the recent disposition of certain of its interests at Fabyan.
Fabyan LMR as of April 3, 2024
As of April 3, 2024, the Fabyan property had a deemed net asset value of ($840,242) (deemed assets of $11.2 million and deemed liabilities of $12.0 million), with an LMR ratio of 0.93.
Fabyan Well List
Click here to download the complete well list in Excel.
Click here to download the complete well list in Excel.
ATLEE
Township 21-22, Range 7 W4
At Atlee, CLEO holds largely a 100% working interest in three sections of land. Production at Atlee is 13° API oil from the Glauconitic Sandstone Formation.
CLEO has recently completed two well re-activations and has identified one additional re-activation and one potential pump installation opportunity. CLEO’s net cost was approximately $55,000 per re-activation.
Average daily production net to CLEO from the Atlee property for the fourth quarter of 2023 was approximately 36 boe/d, consisting of 20 barrels of oil per day and 99 Mcf/d of natural gas. Current production from Atlee is 134 boe/d (60 bbl/d of oil and 441 Mcf/d of natural gas) after the recent re-activations.
Operating income net to CLEO from Atlee for the fourth quarter of 2023 was approximately ($52,000). Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
At Atlee, CLEO holds largely a 100% working interest in three sections of land. Production at Atlee is 13° API oil from the Glauconitic Sandstone Formation.
CLEO has recently completed two well re-activations and has identified one additional re-activation and one potential pump installation opportunity. CLEO’s net cost was approximately $55,000 per re-activation.
Average daily production net to CLEO from the Atlee property for the fourth quarter of 2023 was approximately 36 boe/d, consisting of 20 barrels of oil per day and 99 Mcf/d of natural gas. Current production from Atlee is 134 boe/d (60 bbl/d of oil and 441 Mcf/d of natural gas) after the recent re-activations.
Operating income net to CLEO from Atlee for the fourth quarter of 2023 was approximately ($52,000). Net operating income is forecast to increase significantly with the recent re-activations done by CLEO at Atlee. CLEO is forecasting net operating income for the twelve months ended April 30, 2025 of $650,000 from its interests at Atlee.
Atlee, Alberta
Gross Production Group Plot
Glauconitic Sandstone Formation
At Atlee, the Glauconitic reservoir is comprised of porous sandstones which were deposited in the Early Cretaceous period as sediments from a shoreline barrier complex environment. Hydrocarbons are trapped stratigraphically in the northern part of the barrier as the sandstones pinch out into the adjacent shales.
The average porosity of the Glauconitic reservoir is approximately 27% with average net pay of approximately 4-6 metres.
The following well logs show the Glauconitic Sandstone Formation at Atlee.
At Atlee, the Glauconitic reservoir is comprised of porous sandstones which were deposited in the Early Cretaceous period as sediments from a shoreline barrier complex environment. Hydrocarbons are trapped stratigraphically in the northern part of the barrier as the sandstones pinch out into the adjacent shales.
The average porosity of the Glauconitic reservoir is approximately 27% with average net pay of approximately 4-6 metres.
The following well logs show the Glauconitic Sandstone Formation at Atlee.
Passburg WestCoast Atlee 100/11-35-021-07W1/0
Glauconitic Sandstone Formation Type Log
Glauconitic Sandstone Formation Type Log
Atlee Facilities
At Atlee, CLEO has ownership in the following facility.
Atlee Marketing
Oil from Atlee is trucked to Secure’s Big Valley truck terminal at 10-36-035-20W4 and sold to Secure.
Natural gas is pipeline connected to Inter Pipeline Ltd.
Atlee Reserves
Deloitte LLP (“Deloitte”) prepared an independent reserves evaluation of the Properties (the “Deloitte Report”) as part of the Company’s year-end reporting. The Deloitte Report is effective December 31, 2022 using Deloitte’s January 1, 2023 forecast pricing.
Deloitte estimated that, as at December 31, 2022, the Atlee property contained remaining proved plus probable reserves of 646 MMcf of natural gas and 99,000 barrels of oil (207,000 boe), with an estimated net present value of $1.4 million using forecast pricing at a 10% discount.
Atlee LMR as of April 3, 2024
As of April 3, 2024, the Atlee property had a deemed net asset value of $1.5 million (deemed assets of $2.3 million and deemed liabilities of $796,106), with an LMR ratio of 2.85.
Atlee Well List
Click here to download the complete well list in Excel.
Click here to download the complete well list in Excel.
ALLIANCE
Township 40, Range 12-13 W4
At Alliance, CLEO holds a 100% working interest in three quarter sections of land. The Company has stable, low-decline oil production from the Viking Formation. CLEO also has one horizontal drilling location booked in the Deloitte Report on Section 04-03-040-12W4 targeting the same Viking pool.
Average daily production net to CLEO from the Alliance property for the fourth quarter of 2023 was approximately 15 barrels of oil per day.
Operating income net to CLEO from Alliance for the fourth quarter of 2023 was approximately $76,000.
At Alliance, CLEO holds a 100% working interest in three quarter sections of land. The Company has stable, low-decline oil production from the Viking Formation. CLEO also has one horizontal drilling location booked in the Deloitte Report on Section 04-03-040-12W4 targeting the same Viking pool.
Average daily production net to CLEO from the Alliance property for the fourth quarter of 2023 was approximately 15 barrels of oil per day.
Operating income net to CLEO from Alliance for the fourth quarter of 2023 was approximately $76,000.
Alliance, Alberta
Gross Production Group Plot
Viking Formation
At Alliance, the Viking reservoir is comprised of sandstone within coarsening-upwards cycles from shale to sandstone. The sediments were deposited in the Late Cretaceous period in a shoreface environment.
The following well logs show the Viking Formation at Alliance.
At Alliance, the Viking reservoir is comprised of sandstone within coarsening-upwards cycles from shale to sandstone. The sediments were deposited in the Late Cretaceous period in a shoreface environment.
The following well logs show the Viking Formation at Alliance.
1994450AB Provost 102/03-03-040-12W4/0
Viking Formation Type Log
Viking Formation Type Log
Alliance Facilities
CLEO does not have ownership in any facilities at Alliance.
Alliance Marketing
Oil from Alliance is trucked to Secure’s facility at 12-30-034-09W4 and sold to Secure.
Alliance Reserves
Deloitte LLP (“Deloitte”) prepared an independent reserves evaluation of the Properties (the “Deloitte Report”) as part of the Company’s year-end reporting. The Deloitte Report is effective December 31, 2022 using Deloitte’s January 1, 2023 forecast pricing.
Deloitte estimated that, as at December 31, 2022, the Alliance property contained remaining proved plus probable reserves of approximately 95,000 barrels of oil, with an estimated net present value of $1.3 million using forecast pricing at a 10% discount.
Alliance LMR as of April 3, 2024
As of April 3, 2024, the Alliance property had a deemed net asset value of $425,830 (deemed assets of $724,252 and deemed liabilities of $298,422), with an LMR ratio of 2.43.
Alliance 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 27, 2024.
Sayer Energy Advisors does not conduct a "second-round" bidding process; the intention is to attempt to conclude
transactions with the parties submitting the most acceptable proposals at the conclusion of the process.
transactions with the parties submitting the most acceptable proposals at the conclusion of the process.
Sayer Energy Advisors is accepting cash offers from interested parties until
noon on Thursday June 27, 2024.
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.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, mail (tpavic@sayeradvisors.com) or fax (403.266.4467).
Included in the confidential information is the following: summary land information, the Deloitte Report, LMR information, most recent net operations summary, detailed facilities information 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.