Under Review / Tidewater Midstream and Infrastructure Ltd.
Tidewater Midstream and Infrastructure Ltd.Property Divestiture
Bid Deadline: February 10, 2022
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The Properties offer production potential from multiple reservoirs alongside key Tidewater infrastructure with substantial drilling upside in the Montney Formation.
In the Graham area of British Columbia, Tidewater holds various working interests in approximately 119,035 gross acres (73,116 net) of land including 21,144 gross acres (13,127 net) of Montney rights. In addition, Tidewater holds various working interests in approximately 18,968 gross acres (13,740 net) of land in Northeast BC including 14,641 gross acres (12,725 net) of Montney rights.
The Properties offer access to an extensive facility network with current processing capacity of approximately 45 MMcf/d.
Reactivation of legacy production offers production potential from the Properties of approximately 4-6 MMcf/d of natural gas net to Tidewater. Prior to being shut-in in May 2016, the Properties were producing low decline natural gas primarily from the Debolt, Baldonnel, Jean Marie, Halfway and Boundary Lake formations.
Tidewater intends to retain the infrastructure assets and work with producers on providing full-service midstream solutions. If a party wishes to own a small working interest in the infrastructure, Tidewater would be willing to consider such proposals and requests that proposals include the desired ownership percentage and dollar value ascribed to the infrastructure assets.
In the Graham area of British Columbia, Tidewater holds various working interests in approximately 119,035 gross acres (73,116 net) of land including rights in the 21,144 gross acres (13,127 net) of Montney rights.
In addition, Tidewater holds various working interests in approximately 18,968 gross acres (13,740 net) of land in Northeast BC including 14,641 gross acres (12,725 net) of Montney rights.
The offsetting map shows the most active operators immediately offsetting Tidewater’s Montney interests in the area. Active Montney players in the area include ARC Resources Ltd., Canadian Natural Resources Limited, Crew Energy Inc. and Tourmaline Oil Corp.
There has been significant consolidation of Montney rights in the area over the last two years.
Production potential from the Properties is approximately 4-6 MMcf/d of natural gas net to Tidewater. Production associated with the Properties is currently shut-in, although there is potential for reactivation. Prior to being shut-in in May 2016, the Properties were producing low decline natural gas primarily from the Debolt, Baldonnel, Jean Marie, Halfway and Boundary Lake formations.
Tidewater holds a 32% working interest in the Cypress Gas Facilities, including the natural gas gathering system, natural gas sales pipeline and Cypress Sour Gas Plant located at 94-B-16 Block C Unit 99 (B). Capacity of the Cypress Sour Plant is approximately 45 MMcf/d.
Tidewater’s ownership in the Cypress Gas Plant and associated gas gathering system is outlined as follows.
The assets include a 100% working interest in a road located at Komie which provides Tidewater with intermittent road use revenue. Revenue from road use in 2020 totaled approximately $3,800.
There is no T-North firm transportation held at McMahon or Cypress.
The marketing contract for the non-operated assets in northeast British Columbia has expired. The marketing commitment was a Spectra/Fort Nelson North firm service processing and raw natural gas transportation commitment was not fulfilled.
There is no recent third-party reserve evaluation for the Properties. However; the shut-in production, if reactivated, would have reserves associated with it.
LMR as of October 2021
As of October 2021, Tidewater’s net deemed asset value for the Properties was ($1.6 million) (deemed assets of $8.1 million and deemed liabilities of $8.3 million), with an LMR ratio of 0.98.
The deemed asset value of $8.1 million consists of a Letter of Credit with the BC Oil and Gas Commission.
PROCESS & TIMELINE
Sayer Energy Advisors is accepting cash offers relating to the Properties until 12:00 pm on Thursday February 10, 2022.
Sayer Energy Advisors does not conduct a "second-round" bidding process; the intention is to attempt to conclude a
transaction with the party submitting the most acceptable proposal at the conclusion of the process.
Sayer Energy Advisors is accepting cash offers from interested parties until
noon on Thursday February 10, 2022.
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.
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 (email@example.com) or fax (403.266.4467).
Included in the confidential information is the following: summary land information, net operations summary, LMR summary and other relevant technical information.
To receive further information on the Properties please contact Tom Pavic, Ben Rye or Sydney Birkett at 403.266.6133.