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Under Review   /   Surge Energy Inc.



Surge Energy Inc.

Property Divestiture
Bid Deadline: July 7, 2022
12:00 PM
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OVERVIEW

Surge Energy Inc. (“Surge” or the “Company”) has engaged Sayer Energy Advisors to assist the Company with the sale of certain non-core oil natural gas interests located in various areas of Alberta and Saskatchewan (the “Properties”). The Properties have been split geographically into the North Package, East Central Package, West Central Package and South Package as shown on the map below. The Properties consist of various working interests in both operated and non-operated oil and natural gas wells. Surge is selling the Properties in order to focus its operations on its core assets.
 
These low-decline Properties accounted for average daily production net to Surge for the first quarter of 2022 of approximately 882 boe/d total, consisting of 505 barrels of oil and natural gas liquids per day and 2.3 MMcf/d of natural gas.

Operating income net to Surge from the Properties in the first quarter of 2022 was approximately $2.9 million, or $11.6 million on an annualized basis.
 
Preference will be given to offers to acquire multiple properties; however, offers may be considered for individual properties.

 
Overview Map Showing the Location of the Divestiture Properties


West Central Package


East Central Package


South Package


North Package

 
Production Overview

Average daily production net to Surge from the Properties for the first quarter of 2022 was approximately 882 boe/d total, consisting of 505 barrels of oil and natural gas liquids per day and 2.3 MMcf/d of natural gas, as outlined below.

Operating income net to Surge from the Properties in the first quarter of 2022 was approximately $2.9 million, or $11.6 million on an annualized basis.

 

Gross Production Group Plot of Surge's Oil & Natural Gas Wells

 
LMR Summary

Alberta Properties


As of May 7, 2022, Surge’s net deemed asset value for the operated properties in Alberta was ($20.3 million) (deemed assets of $27.2 million and deemed liabilities of $47.6 million), with an LMR ratio 0.57.

 

 
Saskatchewan Properties

As of April 28, 2022, Surge’s net deemed asset value for the operated properties in Saskatchewan was ($311,225) (deemed assets of $0 and deemed liabilities of $311,225), with an LMR ratio 0.00.

 

The LMR for each of the operated properties as of May 7, 2022 for the properties in Alberta and April 28, 2022 for the properties in Saskatchewan is summarized below.
 
Summary of LMR by Property


*Non-operated


*Non-operated


*Non-operated


*Non-operated
Reserves Overview

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Properties contained remaining proved plus probable reserves of 8.7 Bcf of natural gas and 2.8 million barrels of oil and natural gas liquids (4.3 million boe), with an estimated net present value of $48.1 million using forecast pricing at a 10% discount.

 


 

WEST CENTRAL PACKAGE

In the West Central Package, Surge has properties in the Abee, Bittern Lake/Pembina, Christmas Creek/Corbett/Windfall, Crossfield, Drumheller, Edmonton, Edson, Entwhistle/Alexander, Nevis, Olds, Rich, Sylvan Lake/Medicine River, Vega, Westerose and Willesden Green areas as shown on the following map.
 

 
Average daily production net to Surge from the West Central Package for the first quarter of 2022 was approximately 415 barrels of oil and natural gas liquids per day and 2.0 MMcf/d of natural gas (756 boe/d total).

Operating income net to Surge from the West Central Package in the first quarter of 2022 was approximately $2.7 million, or $10.7 million on an annualized basis.

 

 
The Company believes there is reactivation and uphole potential for the properties in the West Central Package.

NEVIS

Township 37-39, Range 21-23 W4

At Nevis, Surge holds mainly 100% operated working interests in 41.75 sections of land. Surge’s oil and natural gas wells at Nevis are producing from the Wabamun and Edmonton formations.
 
Average daily production net to Surge from Nevis for the first quarter of 2022 was approximately 1.4 MMcf/d of natural gas and 218 barrels of oil and natural gas liquids per day (456 boe/d total).
 
Operating income net to Surge from the Nevis property for the first quarter of 2022 averaged approximately $1.5 million, or $5.9 million on an annualized basis.

 


Nevis, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Nevis Geology

Surge has identified upside in the Wabamun Formation on its lands at Nevis. The following map shows the Wabamun pool outline with booked Wabamun upside drilling locations. Surge has nine booked locations as shown in red, and has also identified 20 potential unbooked horizontal upside drilling locations in the Wabamun as shown in purple on the following map.
 
Detailed mapping of the net pay and structure of the Wabamun will be available in the virtual data room for parties that execute a confidentiality agreement.

 

 
The following well logs show the Wabamun reservoirs at Nevis.
 
TEAC Mikwan 100/06-08-038-22W4/0
Wabamun Type Log


 
Nevis Facilities

At Nevis, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Nevis Marketing

Surge sells its oil and natural gas from Nevis to Macquarie Oil Services Canada Ltd. on a 30-day evergreen contract. Production is sold through the Lousana metre station from the batteries at 12-36-037-22W4 and 16-18-039-22W4.

Nevis Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Nevis property contained remaining proved plus probable reserves of 5.9 Bcf of natural gas and 1.2 million barrels of oil and natural gas liquids (2.1 MMboe), with an estimated net present value of $18.0 million using forecast pricing at a 10% discount.

 


 
Nevis Seismic

Surge has trade and proprietary 2D and 3D data seismic over its lands at Nevis, as illustrated on the following map. The Company’s interpretations of the seismic are available for viewing on the workstation, which is in the Data Room located in Sayer’s office, by parties which have executed a confidentiality agreement.
 


 
Nevis LMR

As of May 7, 2022, Surge’s net deemed asset value for Nevis was $983,383 (deemed assets of $14.0 million and deemed liabilities of $13.0 million), with an LMR ratio of 1.08.

 

Nevis Well List

Click here to download the complete well list in Excel.

WESTEROSE

Township 44-51, Range 26 W4-7 W5

At Westerose, Surge holds a various operated and non-operated working interests in 10.75 sections of land, including a 52.03205% operated working interest in the Westerose South Banff “C” Unit.
 
Average daily production net to Surge from Westerose for the first quarter of 2022 was approximately 114 barrels of oil and natural gas liquids per day and 272 Mcf/d of natural gas (159 boe/d total).
 
Operating income net to Surge from the Westerose property for the first quarter of 2022 was approximately $477,000, or $1.9 million on an annualized basis.

 




Westerose, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Westerose Geology

Surge has identified upside in the Banff Formation and the Glauconitic Sandstone Formation on its lands at Westerose. The following map shows the Banff and Glauconitic producing wells in the area along with the upside drilling locations. Surge has six booked Banff locations as shown in red, and has also identified seven potential unbooked horizontal upside drilling locations in the Glauconitic as shown in pink on the following map.

 

 
Banff Formation

The following well logs show the Banff reservoir at Westerose.

 
Longview WRose 100/04-29-045-02W4/0
Banff Type Log


 
The following map shows the net pay in the Banff Formation with booked drilling locations at Westerose.
 
Banff Formation Net Pay Map

 
The following map shows the structure in the Banff Formation at Westerose.
 
Banff Formation Structure Map

 
Glauconitic Sandstone Formation

The following cross section show the Glauconitic Sandstone reservoir at Westerose.

 
Glauconitic Sandstone Stratigraphic Cross Section

 
The following map shows the structure in the Glauconitic Sandstone Formation at Westerose.
 
Glauconitic Sandstone Formation Structure Map
Westerose Facilities

At Westerose, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Westerose Marketing

Surge sells its oil and natural gas from Westerose to Gibson Energy Partnership on a 30-day evergreen contract. Production is sold through the Rimbey-Westerose metre station from the batteries at 12-29-045-02W5. The Company takes its natural gas liquids in kind and it is sold through Keyera Corp.’s Rimbey facility.

Westerose Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Westerose property contained remaining proved plus probable reserves of 1.2 Bcf of natural gas and 952,000 barrels of oil and natural gas liquids (1.1 MMboe), with an estimated net present value of $18.5 million using forecast pricing at a 10% discount.

 


 
Westerose LMR

As of May 7, 2022, Surge’s net deemed asset value for Westerose was $2.9 million (deemed assets of $7.3 million and deemed liabilities of $4.3 million), with an LMR ratio of 1.68.
 

 
Westerose Well List

Click here to download the complete well list in Excel.

 

EDMONTON

Township 46-53, Range 9-13 W5

At Edmonton, Surge holds a various non-operated working interests in 13 sections of land including a 4.2577% working interest in the Carrot Creek Cardium “K” Unit No. 1 operated by Obsidian Energy Ltd.
 
Average daily production net to Surge from Edmonton for the first quarter of 2022 was approximately 253 Mcf/d of natural gas and 19 barrels of oil and natural gas liquids per day (61 boe/d total). Surge’s oil and natural gas wells at Edmonton are producing primarily from the Cardium Formation.
 
Operating income net to Surge from the Edmonton property for the first quarter of 2022 was approximately $265,500, or $1.1 million on an annualized basis.

 



Edmonton, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Edmonton Facilities

The Company does not have ownership in any facilities at Edmonton.

Edmonton Marketing

Surge sells its oil and natural gas from Edmonton to Macquarie Oil Services Canada Ltd. on a 30-day evergreen contract. Production is sold through the Boggy Hall metre station from the batteries at 04-08-047-09W5, 06-15-050-11W5, 13-21-046-09W5 and 14-30-051-10W5.

Edmonton Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Edmonton property contained remaining proved plus probable reserves of 366 MMcf of natural gas and 31,000 barrels of oil and natural gas liquids (93,000 boe), with an estimated net present value of $373,000 using forecast pricing at a 10% discount.

 


 
Edmonton LMR

As of May 7, 2022, Surge’s net deemed asset value for Edmonton was ($58,500) (deemed assets of $0 and deemed liabilities of $58,500), with an LMR ratio of 0.00.
 

Edmonton Well List

Click here to download the complete well list in Excel.

CROSSFIELD

Township 28-30, Range 28 W4-1 W5

At Crossfield, Surge holds both operated and non-operated working interests in 4.5 sections of land.
 
The low-decline production at Crossfield is from the Cardium Formation. Average daily production net to Surge from Crossfield for the first quarter of 2022 was approximately 50 barrels of oil and 23 Mcf/d of natural gas (54 boe/d total).
 
Operating income net to Surge from the Crossfield property for the first quarter of 2022 was approximately $379,500, or $1.5 million on an annualized basis.

 


Crossfield, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Crossfield Facilities

At Crossfield, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Crossfield Marketing

Surge sells its oil and natural gas from Crossfield to Tidal Energy Marketing Inc. at the 14-24-029-03W5 battery on a 30-day evergreen contract.

Crossfield Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Crossfield property contained remaining proved plus probable reserves of 86,000 barrels of oil and natural gas liquids and 73 MMcf of natural gas (99,000 boe), with an estimated net present value of $2.0 million using forecast pricing at a 10% discount.

 


 
Crossfield LMR

As of May 7, 2022, Surge’s net deemed asset value for Crossfield was $1.3 million (deemed assets of $1.9 million and deemed liabilities of $629,672), with an LMR ratio of 3.06.
 

Crossfield Well List

Click here to download the complete well list in Excel.

WILLESDEN GREEN

Township 38-42, Range 3-8 W5

At Willesden Green, Surge holds various operated and non-operated working interests in 16.75 sections of land including a 16.3564% (9.7403% Surge working interest plus partner interests) in the Willesden Green Viking A Unit No. 1 (Surge holds a 1.1827% working interest holds in trust for Signalta Resources Limited). 
 
Average daily production net to Surge from Willesden Green for the first quarter of 2022 was approximately seven barrels of oil and natural gas liquids per day and 17 Mcf/d of natural gas (10 boe/d total).
 
Operating income net to Surge from the Willesden Green property for the first quarter of 2022 was approximately $27,000, or $108,000 on an annualized basis.

 




Willesden Green, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Willesden Green Facilities

At Willesden Green, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Willesden Green Marketing

Surge sells its oil and natural gas from Willesden Green to Macquarie Oil Services Canada Ltd. on a 30-day evergreen contract. Production is sold from the battery at 08-01-041-07W5.

Willesden Green Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Willesden Green property contained remaining proved plus probable reserves of 245 MMcf of natural gas and 126,000 barrels of oil and natural gas liquids (167,000 boe), with an estimated net present value of $1.5 million using forecast pricing at a 10% discount.

 


 
Willesden Green LMR

As of May 7, 2022, Surge’s net deemed asset value for Willesden Green was ($3.5 million) (deemed assets of $0 and deemed liabilities of $3.5 million), with an LMR ratio of 0.00.
 

Willesden Green Well List

Click here to download the complete well list in Excel.

ENTWHISTLE / ALEXANDER

Township 53-56, Range 2-6 W5

At Entwhistle/Alexander, Surge holds a various operated and non-operated working interests in two sections of land including a 13.96667% working interest in the Alexis Banff A Pool Unit operated by Spoke Resources Ltd.  
 
Average daily production net to Surge from Entwhistle/Alexander for the first quarter of 2022 was approximately six barrels of oil per day and 13 Mcf/d of natural gas (eight boe/d total).
 
Operating income net to Surge from the Entwhistle/Alexander property for the first quarter of 2022 was approximately $38,400, or $154,000 on an annualized basis.

 




Entwhistle/Alexander, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Entwhistle/Alexander Geology

Surge has identified upside in the Banff and Nordegg formations on its lands at Entwhistle/Alexander. The following map shows the Alexis Banff A Pool Unit wells which have produced from the Nordegg in red and from the Banff in green.
 
A detailed presentation of the upside will be available in the virtual data room for parties that execute a confidentiality agreement.

 

 
Banff Formation

The following cross sections shows the upper portion of the Banff Formation which has been dolomitized, creating porous reservoir and the lower Banff which is composed of tight limestone and anhydrite. The oil/water contact is typically found at a depth of approximately 650 metres subsea.

 
Banff Formation
Structural Cross-Section


 
The following map shows the net pay in the Banff Formation with booked drilling locations at Entwhistle/Alexander.
 
Banff Formation Net Pay Map

 
The following map shows the structure of the Banff Formation on Surge’s lands at Entwhistle/Alexander.
 
Banff Formation Structure Map

 
Nordegg Formation

The following map shows the net pay in the Nordegg Formation at Entwhistle/Alexander.

 
Nordegg Formation Net Pay Map

 
Entwhistle/Alexander Facilities

The Company does not have ownership in any facilities at Entwhistle/Alexander.

Entwhistle/Alexander Marketing

The Company is paid for its oil and natural gas production from Entwhistle/Alexander by a JIB from the operator.

Entwhistle/Alexander Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing.
 
Sproule estimates that, as of December 31, 2021, the Entwhistle/Alexander property contained remaining proved plus probable reserves of 130,000 barrels of oil and 119 MMcf of natural gas (150,000 boe), with an estimated net present value of $2.0 million using forecast pricing at a 10% discount.

 


 
Entwhistle/Alexander LMR

As of May 7, 2022, Surge’s net deemed asset value for Entwhistle/Alexander was ($54,500) (deemed assets of $0 and deemed liabilities of $54,500), with an LMR ratio of 0.00.
 

 
Entwhistle/Alexander Well List

Click here to download the complete well list in Excel.

 

SYLVAN LAKE / MEDICINE RIVER

Township 33-39, Range 1-4 W5

At Sylvan Lake/Medicine River, Surge holds various non-operated working interest in 11.25 sections of land.
 
Average daily production net to Surge from Sylvan Lake/Medicine River for the first quarter of 2022 was approximately 32 Mcf/d of natural gas and two barrels of natural gas liquids per day (seven boe/d total).
 
Operating income net to Surge from the Sylvan Lake/Medicine River property for the first quarter of 2022 was approximately $21,200, or $85,000 on an annualized basis.

 


Sylvan Lake/Medicine River, Alberta
Gross Production Group Plot of Surge's Natural Gas Wells


 
Sylvan Lake/Medicine River Facilities

The Company does not have ownership in any facilities at Sylvan Lake/Medicine River.

Sylvan Lake/Medicine River Marketing

The Company takes its natural gas liquids in kind at Sylvan Lake/Medicine River and sells its production through BTG Energy Corp.

Sylvan Lake/Medicine River Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Sylvan Lake/Medicine River property contained remaining proved plus probable reserves of 104 MMcf of natural gas and 8,000 barrels of oil and natural gas liquids (26,000 boe), with an estimated net present value of $283,000 using forecast pricing at a 10% discount.

 



 
Sylvan Lake/Medicine River LMR

As of May 7, 2022, Surge’s net deemed asset value for Sylvan Lake/Medicine River was ($79,176) (deemed assets of $0 and deemed liabilities of $79,176), with an LMR ratio of 0.00.

 

Sylvan Lake/Medicine River Well List

Click here to download the complete well list in Excel.

OLDS

Township 34-39, Range 24-28 W4

At Olds, Surge holds various working interest in five sections of land on which there are several producing and non-producing wells.
 
The Olds property produced trace amounts of natural gas net to Surge in the quarter months of 2022.

 

 
Olds Facilities

The Company does not have ownership in any facilities at Olds.

Olds Reserves

The Olds property was evaluated as part of the Sproule Report and no reserves were assigned.

Olds LMR

As of May 7, 2022, Surge’s net deemed asset value for Olds was ($27,250) (deemed assets of $0 and deemed liabilities of $27,250), with an LMR ratio of 0.00.
 

Olds Well List

Click here to download the complete well list in Excel.

ABEE

Township 61, Range 22 W4

At Abee, Surge holds a 20% non-operated working interest in one quarter section of land on which there is one suspended natural gas well and a 34.838% non-operated working interest in two additional abandoned wells.
 
There is currently no production from the Abee property.

 

 
Abee Facilities

The Company does not have ownership in any facilities at Abee.

Abee Reserves

The Abee property was not evaluated in the Sproule Report.

Abee LMR

The Company does not operate any wells or facilities associated with the Abee property.

Abee Well List

Click here to download the complete well list in Excel.

BITTERN LAKE / PEMBINA

Township 48-49, Range 23-26 W4

At Bittern Lake/Pembina, Surge holds a 65%-100% operated working interest in several abandoned wells.
 
There is currently no production from the Bittern Lake/Pembina property.

 

 
Bittern Lake/Pembina Facilities

At Bittern Lake/Pembina, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Bittern Lake/Pembina Reserves

The Bittern Lake/Pembina property was evaluated as part of the Sproule Report and no reserves were assigned.

Bittern Lake/Pembina LMR

As of May 7, 2022, Surge’s net deemed asset value for Bittern Lake/Pembina was ($375,500) (deemed assets of $0 and deemed liabilities of $375,500), with an LMR ratio of 0.00.
 

Bittern Lake/Pembina Well List

Click here to download the complete well list in Excel.

CHRISTMAS CREEK / CORBETT / WINDFALL

Township 58-62, Range 6-11 W5

At Christmas Creek/Corbett/Windfall, Surge holds 7.5%-100% non-operated and operated working interests in 4.5 sections of land and several non-producing wells.  
 
There is currently no production from the Christmas Creek/Corbett/Windfall property.

 

 
Christmas Creek/Corbett/Windfall Facilities

The Company does not have ownership in any facilities at Christmas Creek/Corbett/Windfall.

Christmas Creek/Corbett/Windfall Reserves

The Christmas Creek/Corbett/Windfall property was not evaluated in the Sproule Report.

Christmas Creek/Corbett/Windfall LMR

As of May 7, 2022, Surge’s net deemed asset value for Christmas Creek/Corbett/Windfall was ($77,000) (deemed assets of $0 and deemed liabilities of $77,000), with an LMR ratio of 0.00.
 

Christmas Creek/Corbett/Windfall Well List

Click here to download the complete well list in Excel.

DRUMHELLER

Township 28-29, Range 19-20 W4

At Drumheller, Surge holds various operated and non-operated working interests in two sections of land and several abandoned wells.
 
There is currently no production from the Drumheller property.

 

 
Drumheller Facilities

At Drumheller, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Drumheller Reserves

The Drumheller property was evaluated as part of the Sproule Report and no reserves were assigned.

Drumheller LMR

As of May 7, 2022, Surge’s net deemed asset value for Drumheller was ($707,000) (deemed assets of $0 and deemed liabilities of $707,000), with an LMR ratio of 0.00.
 

Drumheller Well List

Click here to download the complete well list in Excel.

EDSON

Township 52-53, Range 16-19 W5

At Edson, Surge holds a various operated and non-operated working interests in two sections of land on which there are two abandoned wells.
 
There is currently no production from the Edson property.

 

 
Edson Facilities

The Company does not have ownership in any facilities at Edson.

Edson Reserves

The Edson property was not evaluated in the Sproule Report.

Edson LMR

As of May 7, 2022, Surge’s net deemed asset value for Edson was ($42,750) (deemed assets of $0 and deemed liabilities of $42,750), with an LMR ratio of 0.00.
 

Edson Well List

Click here to download the complete well list in Excel.

RICH

Township 34, Range 19 W4

At Rich, Surge holds a royalty interest in one section of land on which there are four coalbed methane wells producing from the Horseshoe Canyon Formation.  
 
The Rich property produced minor volumes of coalbed methane net to Surge in the quarter of 2022.

 

 
Rich Facilities

The Company does not have ownership in any facilities at Rich.

Rich Reserves

The Rich property was evaluated as part of the Sproule Report and no reserves were assigned.

Rich LMR

The Company does not operate any wells or facilities associated with the Rich property.

Rich Well List

Click here to download the complete well list in Excel.

VEGA

Township 63-64, Range 3-4 W5

At Vega, Surge holds various working interests in two abandoned wellbores.
 
There is currently no production from the Vega property.

 

 
Vega Facilities

The Company does not have ownership in any facilities at Vega.

Vega Reserves

The Vega property was not evaluated in the Sproule Report.

Vega LMR

As of May 7, 2022, Surge’s net deemed asset value for Vega was ($23,875) (deemed assets of $0 and deemed liabilities of $23,875), with an LMR ratio of 0.00.
 

Vega Well List

Click here to download the complete well list in Excel.

EAST CENTRAL PACKAGE

In the East Central Package, Surge has properties in the Cessford, Clarks Lake, John Lake, Killam, Kindersley, Leahurst, Leela, Misty/New Brigden, Monitor, Sibbald and Senlac areas as shown on the following map.
 

 
Average daily production net to Surge from the East Central Package for the first quarter of 2022 was approximately 48 barrels of oil and natural gas liquids per day and 202 Mcf/d of natural gas (82 boe/d total).

Operating income net to Surge from the East Central Package in the first quarter of 2022 was approximately $190,000, or $760,000 on an annualized basis.

 

 
The Company believes there is reactivation and uphole potential for the properties in the East Central Package.

KILLAM

Township 42-44, Range 10-13 W4

At Killam, Surge holds a primarily 100% working interest in seven sections of land on which there are several oil and natural gas wells producing from the Mannville, Glauconitic, Ostracod, and Sparky formations. 
 
Average daily production net to Surge from Killam for the first quarter 2022 was approximately 45 barrels of oil and natural gas liquids per day and 175 Mcf/d of natural gas (74 boe/d total).
 
Operating income net to Surge from the Killam property for the first quarter of 2022 was approximately $270,000, or $1.1 million on an annualized basis.

 


Killam, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Killam Geology

Surge has identified upside in the Glauconitic Sandstone Formation on its lands at Killam. The following map shows the Glauconitic upside drilling locations.

 

 
Glauconitic Sandstone Formation

The following well logs show the Glauconitic Sandstone reservoir at Killam.

 
Surge Energy KillamN 100/06-15-044-13W4/0
Glauconitic Sandstone Type Log


 
Surge has four booked proven undeveloped horizontal upside drilling locations in the Glauconitic on its lands at Killam as shown in green on the following map.
 

 
The following map shows the net pay in the Glauconitic Sandstone Formation at Killam.
 
Glauconitic Sandstone Formation Net Pay Map

 
The following map shows the structure in the Glauconitic Sandstone Formation at Killam.
 
Glauconitic Sandstone Formation Structure Map

 
Killam Facilities

At Killam, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.
 

Killam Marketing

Surge sells its oil and natural gas from Killam to Gibson Energy Partnership on a 30-day evergreen contract. Production is sold through the Killam metre station from the batteries at 06-15-44-13W4.

Killam Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Killam property contained remaining proved plus probable reserves of 212,000 barrels of oil and natural gas liquids and 768 MMcf of natural gas (340,000 boe), with an estimated net present value of $3.5 million using forecast pricing at a 10% discount.

 


 
Killam LMR

As of May 7, 2022, Surge’s net deemed asset value for Killam was $1.4 million (deemed assets of $3.2 million and deemed liabilities of $1.8 million), with an LMR ratio of 1.77.
 

 
Killam Well List

Click here to download the complete well list in Excel.

 

CLARKS LAKE

Township 38-40, Range 5-10 W4

At Clarks Lake, Surge holds various working interests in 8.25 sections of land including a 9.7681% working interest in the Kessler Viking Gas Unit operated by Battle River Energy Ltd. and a 100% operated working interest in several oil and natural gas wells producing primarily from the Mannville Group and the Viking Formation. 
 
Average daily production net to Surge from Clarks Lake for the first quarter of 2022 was approximately 27 Mcf/d of natural gas and three barrels of oil per day (eight boe/d total).
 
Operating income net to Surge from the Clarks Lake property for the first quarter of 2022 was approximately $18,000, or $72,000 on an annualized basis.

 




Clarks Lake, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Clarks Lake Facilities

At Clarks Lake, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Clarks Lake Marketing

The Company is paid for its oil and natural gas production from Clarks Lake by a JIB from the operator.

Clarks Lake Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Clarks Lake property contained remaining proved plus probable reserves of 13,000 barrels of oil, with an estimated net present value of $319,000 using forecast pricing at a 10% discount.

 



 
Clarks Lake LMR

As of May 7, 2022, Surge’s net deemed asset value for Clarks Lake was ($765,606) (deemed assets of $262,437 and deemed liabilities of $1.0 million), with an LMR ratio of 0.26.

 

Clarks Lake Well List

Click here to download the complete well list in Excel.

CESSFORD

Township 27-28, Range 33 W4

At Cessford, Surge holds a 100% working interest in two abandoned wells.
 
There is currently no production from the Cessford property.

 

 
Cessford Facilities

The Company does not have ownership in any facilities at Cessford.

Cessford Reserves

The Cessford property was not evaluated in the Sproule Report.

Cessford LMR

As of May 7, 2022, Surge’s net deemed asset value for Cessford was ($16,500) (deemed assets of $0 and deemed liabilities of $16,500), with an LMR ratio of 0.00.
 

Cessford Well List

Click here to download the complete well list in Excel.

JOHN LAKE

Township 55-56, Range 1 W4

At John Lake, Surge holds various non-operated working interests in two sections of land on which there are two abandoned wellbores.
 
There is currently no production from the John Lake property.

 

 
John Lake Facilities

The Company does not have ownership in any facilities at John Lake.

John Lake Reserves

The John Lake property was not evaluated in the Sproule Report.

John Lake LMR

The Company does not operate any wells or facilities associated with the John Lake property.

John Lake Well List

Click here to download the complete well list in Excel.

KINDERSLEY, SK

Township 25-32, Range 23-27 W3

At Kindersley, Surge holds various working interests in one section of land and several non-producing wells.
 
There is currently no production from the Kindersley property.

 

 
Kindersley Facilities

The Company does not have ownership in any facilities at Kindersley.

Kindersley Reserves

The Kindersley property was not evaluated in the Sproule Report.

Kindersley LMR

As of April 28, 2022, Surge’s net deemed asset value for Kindersley was ($178,825) (deemed assets of $0 and deemed liabilities of $178,825), with an LMR ratio of 0.00.
 

Kindersley Well List

Click here to download the complete well list in Excel.

LEAHURST

Township 38-40, Range 14-18 W4

At Leahurst, Surge holds various working interest in two sections of land and several non-producing wells, including a 23.96844% working interest in the Leahurst Glauconitic “D” Pool Unit operated by Rally Canada Resources Ltd.  
 
There is currently no production from the Leahurst property.

 



 
Leahurst Facilities

The Company does not have ownership in any facilities at Leahurst.

Leahurst Reserves

The Leahurst property was evaluated as part of the Sproule Report and no reserves were assigned.

Leahurst LMR

As of May 7, 2022, Surge’s net deemed asset value for Leahurst was ($27,250) (deemed assets of $0 and deemed liabilities of $27,250), with an LMR ratio of 0.00.
 

Leahurst Well List

Click here to download the complete well list in Excel.

LEELA

Township 38-39, Range 4-5 W4

At Leela, Surge holds a 100% working interest in one LSD of land and several abandoned wells.  
 
There is currently no production from the Leela property.

 

 
Leela Facilities

At Leela, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Leela Reserves

The Leela property was evaluated as part of the Sproule Report and no reserves were assigned.

Leela LMR

As of May 7, 2022, Surge’s net deemed asset value for Leela was ($2.8 million) (deemed assets of $0 and deemed liabilities of $2.8 million), with an LMR ratio of 0.00.
 

Leela Well List

Click here to download the complete well list in Excel.

MISTY / NEW BRIGDEN

Township 32-34, Range 1-6 W4

At Misty/New Brigden, Surge holds various working interests in 3.5 sections of land and several abandoned wells.  
 
There is currently no production from the Misty/New Brigden property.

 

 
Misty/New Brigden Facilities

At Misty/New Brigden, Surge has ownership in the facility outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Misty/New Brigden Reserves

The Misty/New Brigden property was evaluated as part of the Sproule Report and no reserves were assigned.

Misty/New Brigden LMR

As of May 7, 2022, Surge’s net deemed asset value for Misty/New Brigden was ($198,000) (deemed assets of $0 and deemed liabilities of $198,000), with an LMR ratio of 0.00.
 

Misty/New Brigden Well List

Click here to download the complete well list in Excel.

MONITOR

Township 31-33, Range 7-10 W4

At Monitor, Surge holds various operated and non-operated working interests in 5.75 sections of land and several non-producing wells. 
 
There is currently no production from the Monitor property.

 

 
Monitor Facilities

The Company does not have ownership in any facilities at Monitor.

Monitor Reserves

The Monitor property was evaluated as part of the Sproule Report and no reserves were assigned.

Monitor LMR

As of May 7, 2022, Surge’s net deemed asset value for Monitor was ($82,500) (deemed assets of $0 and deemed liabilities of $82,500), with an LMR ratio of 0.00.
 

Monitor Well List

Click here to download the complete well list in Excel.

SENLAC, SK

Township 40-49, Range 20-26 W3

At Senlac, Surge holds various working interest in 2.125 sections of land and four non-producing wells.
 
There is currently no production from the Senlac property.

 

 
Senlac Facilities

The Company does not have ownership in any facilities at Senlac.

Senlac Reserves

The Senlac property was not evaluated in the Sproule Report.

Senlac LMR

As of April 28, 2022, Surge’s net deemed asset value for Senlac was ($78,000) (deemed assets of $0 and deemed liabilities of $78,000), with an LMR ratio of 0.00.
 

Senlac Well List

Click here to download the complete well list in Excel.

SIBBALD

Township 25-31, Range 1-4 W4

At Sibbald, Surge holds mainly a 100% working interest in 9.25 sections of land.  
 
The Sibbald property produced trace amounts of oil net to Surge in the first quarter of 2022.

 

 
Sibbald Facilities

At Sibbald, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Sibbald Reserves

The Sibbald property was evaluated as part of the Sproule Report and no reserves were assigned.

Sibbald LMR

As of May 7, 2022, Surge’s net deemed asset value for Sibbald was ($1.3 million) (deemed assets of $0 and deemed liabilities of $1.3 million), with an LMR ratio of 0.00.
 

Sibbald Well List

Click here to download the complete well list in Excel.

SOUTH PACKAGE

In the South Package, Surge has properties in the Alderson, Armada, Black Butte, Cherry, Forty Mile Coulee, Java North, Long Coulee, Pageant, Port Reeve, Rush Lake, Travers and Turin areas as shown on the following map.
 

 
Average daily production net to Surge from the South Package for the first quarter of 2022 was approximately 42 barrels of oil per day and 10 Mcf/d of natural gas (44 boe/d total).

Operating income net to Surge from the South Package in the first quarter of 2022 was approximately $135,000, or $540,000 on an annualized basis.

 

 
The Company believes there is reactivation and uphole potential for the properties in the South Package.

LONG COULEE

Township 15-17, Range 20-23 W4

At Long Coulee, Surge holds mainly 100% working interests in 12.5 sections of land, including a 100% operated working interest in the Long Coulee Unit No. 2. Surge holds working interests and operates several oil and natural gas wells producing from the Sunburst and Glauconitic Sandstone formations at Long Coulee.
 
Average daily production net to Surge from Long Coulee for the first quarter 2022 was approximately 42 barrels of oil per day.
 
Operating income net to Surge from the Long Coulee property for the first quarter of 2022 was approximately $187,000, or $748,000 on an annualized basis.

 




Long Coulee, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Long Coulee Geology

Surge has identified upside in the Glauconitic Sandstone Formation and the Sunburst Formation on its lands at Long Coulee. The following map shows wells which have produced from the Glauconitic in green and from the Sunburst in red. Surge has identified five potential horizontal upside drilling locations in the Glauconitic as shown in purple on the following map.

 

 
The following well logs show the Glauconitic Sandstone and Sunburst reservoirs at Long Coulee.
 
Corinthian Longco 100/10-06-016-22W4/0
Glauconitic/Sunburst Type Log


 
The Company has mapped the net pay in the Glauconitic Sandstone Formation on its lands at Long Coulee. Surge has identified five potential horizontal upside drilling locations in the Glauconitic as shown in purple on the following map.
 
Long Coulee Facilities

At Long Coulee, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Long Coulee Marketing

Surge sells its oil and natural gas from Long Coulee to Macquarie Oil Services Canada Ltd. on a 30-day evergreen contract. Production is sold from the batteries at 08-20-015-22W4, 16-20-015-22W4 and 08-04-016-22W4.

Long Coulee Reserves

Sproule Associates Limited (“Sproule”) prepared an independent reserves evaluation of the Properties as part of the Company’s year-end evaluation (the “Sproule Report”). The Sproule Report is effective December 31, 2021 using Sproule’s December 31, 2021 forecast pricing. 
 
Sproule estimates that, as of December 31, 2021, the Long Coulee property contained remaining proved plus probable reserves of 84,000 barrels of oil, with an estimated net present value of $1.5 million using forecast pricing at a 10% discount.

 



 
Long Coulee LMR

As of May 7, 2022, Surge’s net deemed asset value for Long Coulee was ($4.9 million) (deemed assets of $540,014 and deemed liabilities of $5.4 million), with an LMR ratio of 0.10.

 

Surge has undertaken extensive abandonment and reclamation work at Long Coulee to date. The current abandoned wells in the field include nine wells which have been downhole abandoned, and the remaining have been cut and capped. The Company has 21 wells which have been slated for abandonment or environmental remediation in 2022. Site Rehabilitation Program funding will be applied to a portion of this work.

Long Coulee Well List

Click here to download the complete well list in Excel.

PORT REEVE, SK

Township 20-21, Range 23-24 W3

At Port Reeve, Surge holds a 2.25% non-operated working interest in 13.25 sections of land on which there several natural gas wells producing from the Milk River Formation.
 
Average daily production net to Surge from Port Reeve for the first quarter of 2022 was approximately 10 Mcf/d of natural gas (two boe/d total).
 
Operating income net to Surge from the Port Reeve property for the first quarter of 2022 was approximately ($900), or ($3,600) on an annualized basis.

 


Port Reeve, Saskatchewan
Gross Production Group Plot of Surge's Natural Gas Wells


 
Port Reeve Facilities

The Company does not have ownership in any facilities at Port Reeve.

Port Reeve Marketing

TEXT

Port Reeve Reserves

The Port Reeve property was not evaluated in the Sproule Report.

Port Reeve LMR

As of April 28, 2022, Surge’s net deemed asset value for Port Reeve was ($13,600) (deemed assets of $0 and deemed liabilities of $13,600), with an LMR ratio of 0.00.
 

Port Reeve Well List

Click here to download the complete well list in Excel.

ALDERSON

Township 14-18, Range 10 W4

At Alderson, Surge holds a royalty interest in 1.25 sections of land and four wells operated by Canadian Natural Resources Limited.
 
There is currently no production from the Alderson property.

 

 
Alderson Facilities

The Company does not have ownership in any facilities at Alderson.

Alderson Reserves

The Alderson property was not evaluated in the Sproule Report.

Alderson LMR

The Company does not operate any wells or facilities associated with the Alderson property.

Alderson Well List

Click here to download the complete well list in Excel.

ARMADA

Township 15-17, Range 19-20 W4

At Armada, Surge holds 50%-100% working interests in three sections of land and several abandoned wells.
 
There is currently no production from the Armada property.

 

 
Armada Facilities

At Armada, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Armada Reserves

The Armada property was evaluated as part of the Sproule Report and no reserves were assigned.

Armada LMR

As of May 7, 2022, Surge’s net deemed asset value for Armada was ($674,984) (deemed assets of $0 and deemed liabilities of $674,984), with an LMR ratio of 0.00.
 

Armada Well List

Click here to download the complete well list in Excel.

BLACK BUTTE

Township 1, Range 7-8 W4

At Black Butte, Surge holds 26.667%-100% working interests in several abandoned wells. 
 
There is currently no production from the Black Butte property.

 

 
Black Butte Facilities

The Company does not have ownership in any facilities at Black Butte.

Black Butte Reserves

The Black Butte property was evaluated as part of the Sproule Report and no reserves were assigned.

Black Butte LMR

As of May 7, 2022, Surge’s net deemed asset value for Black Butte was ($115,500) (deemed assets of $0 and deemed liabilities of $115,500), with an LMR ratio of 0.00.
 

Black Butte Well List

Click here to download the complete well list in Excel.

CHERRY

Township 8-10, Range 11-14 W4

At Cherry, Surge holds royalty interest in one section of land and a 100% working interest in several abandoned wells. 
 
There is currently no production from the Cherry property.

 

 
Cherry Facilities

At Cherry, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Cherry Reserves

The Cherry property was evaluated as part of the Sproule Report and no reserves were assigned.

Cherry LMR

As of May 7, 2022, Surge’s net deemed asset value for Cherry was ($360,200) (deemed assets of $0 and deemed liabilities of $360,200), with an LMR ratio of 0.00.
 

Cherry Well List

Click here to download the complete well list in Excel.

FORTY MILE COULEE

Township 7, Range 9 W4

At Forty Mile Coulee, Surge holds 85%-100% working interests in two abandoned wells.
 
There is currently no production from the Forty Mile Coulee property.

 

 
Forty Mile Coulee Facilities

The Company does not have ownership in any facilities at Forty Mile Coulee.

Forty Mile Coulee Reserves

The Forty Mile Coulee property was not evaluated in the Sproule Report.

Forty Mile Coulee LMR

As of May 7, 2022, Surge’s net deemed asset value for Forty Mile Coulee was ($33,000) (deemed assets of $0 and deemed liabilities of $33,000), with an LMR ratio of 0.00.
 

Forty Mile Coulee Well List

Click here to download the complete well list in Excel.

JAVA NORTH, SK

Township 16, Range 15 W3

At Java North, Surge holds a 100% working interest in one abandoned well. 
 
There is currently no production from the Java North property.

 

 
Java North Facilities

The Company does not have ownership in any facilities at Java North.

Java North Reserves

The Java North property was not evaluated in the Sproule Report.

Java North LMR

As of April 28, 2022, Surge’s net deemed asset value for Java North was ($13,600) (deemed assets of $0 and deemed liabilities of $13,600), with an LMR ratio of 0.00.
 

Java North Well List

Click here to download the complete well list in Excel.

PAGEANT

Township 18, Range 20-21 W4

At Pageant, Surge holds mainly a 100% working interest in several non-producing wellbores.
 
There is currently no production from the Pageant property.

 

 
Pageant Facilities

At Pageant, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Pageant Reserves

The Pageant property was evaluated as part of the Sproule Report and no reserves were assigned.

Pageant LMR

As of May 7, 2022, Surge’s net deemed asset value for Pageant was ($1.1 million) (deemed assets of $0 and deemed liabilities of $1.1 million), with an LMR ratio of 0.00.
 

Pageant Well List

Click here to download the complete well list in Excel.

RUSH LAKE, SK

Township 18, Range 11 W3

At Rush Lake, Surge holds a 100% working interest in two abandoned wells.
 
There is currently no production from the Rush Lake property.

 

 
Rush Lake Facilities

The Company does not have ownership in any facilities at Rush Lake.

Rush Lake Reserves

The Rush Lake property was not evaluated in the Sproule Report.

Rush Lake LMR

As of April 28, 2022, Surge’s net deemed asset value for Rush Lake was ($27,200) (deemed assets of $0 and deemed liabilities of $27,200), with an LMR ratio of 0.00.
 

Rush Lake Well List

Click here to download the complete well list in Excel.

TRAVERS

Township 14, Range 22-23 W4

At Travers, Surge holds a 100% working interest in one section of land and several non-producing oil and natural gas wells.
 
There is currently no production from the Travers property.

 

 
Travers Facilities

At Travers, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Travers Reserves

The Travers property was not evaluated in the Sproule Report.

Travers LMR

As of May 7, 2022, Surge’s net deemed asset value for Travers was ($862,272) (deemed assets of $0 and deemed liabilities of $862,272), with an LMR ratio of 0.00.
 

Travers Well List

Click here to download the complete well list in Excel.

TURIN

Township 11, Range 17 W4

At Turin, Surge holds a 100% working interest two abandoned wells. 
 
There is currently no production from the Turin property.

 

 
Turin Facilities

At Turin, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Turin Reserves

The Turin property was not evaluated in the Sproule Report.

Turin LMR

As of May 7, 2022, Surge’s net deemed asset value for Turin was ($50,500) (deemed assets of $0 and deemed liabilities of $50,500), with an LMR ratio of 0.00.
 

Turin Well List

Click here to download the complete well list in Excel.

NORTH PACKAGE

In the North Package, Surge has properties in the Bison Lake, Cecil/Mulligan, Deadwood, Hotchkiss, Kakut and Nipisi areas as shown on the following map.
 

 
There is currently no production from the North Package. The Company believes there is reactivation and uphole potential for the properties in the North Package.
 

BISON LAKE

Township 95, Range 15 W5

At Bison Lake, Surge holds 12.5%-33.33% working interests in 2.25 sections of land and several non-producing wells operated by Prairie Provident Resources Inc.
 
There is currently no production from the Bison Lake property.

 

 
Bison Lake Facilities

The Company does not have ownership in any facilities at Bison Lake.

Bison Lake Reserves

The Bison Lake property was not evaluated in the Sproule Report.

Bison Lake LMR

The Company does not operate any wells or facilities associated with the Bison Lake property.

Bison Lake Well List

Click here to download the complete well list in Excel.

CECIL / MULLIGAN

Township 82-85, Range 5-9 W6

In the Cecil/Mulligan area, Surge holds various working interest in four sections of land and several non-producing wells.
 
There is currently no production from the Cecil/Mulligan property.

 

 
Cecil/Mulligan Facilities

The Company does not have ownership in any facilities at Cecil/Mulligan.

Cecil/Mulligan Reserves

 
The Cecil/Mulligan property was not evaluated in the Sproule Report.

Cecil/Mulligan LMR

As of May 7, 2022, Surge’s net deemed asset value for Cecil/Mulligan was ($97,793) (deemed assets of $0 and deemed liabilities of $97,793), with an LMR ratio of 0.00.

 

Cecil/Mulligan Well List

Click here to download the complete well list in Excel.

DEADWOOD

Township 91, Range 22-24 W5

At Deadwood, Surge holds mainly a 100% working interest in nine sections of land and several non-producing wells.
 
There is currently no production from the Deadwood property.

 

 
Deadwood Facilities

The Company does not have ownership in any facilities at Deadwood.

Deadwood Reserves

The Deadwood property was evaluated as part of the Sproule Report and no reserves were assigned.

Deadwood LMR

As of May 7, 2022, Surge’s net deemed asset value for Deadwood was ($1.4 million) (deemed assets of $0 and deemed liabilities of $1.4 million), with an LMR ratio of 0.00.

 

Deadwood Well List

Click here to download the complete well list in Excel.

HOTCHKISS

Township 88-96, Range 21 W5-3 W6

At Hotchkiss, Surge holds mainly a 100% working interest in 58 sections of land.
 
There is currently no production from the Hotchkiss property. The property was shut-in in February 2020 due to weak commodity prices. There is upside potential in re-activating the property with the current price of natural gas.
 
The Hotchkiss property was producing as much as 1.6 MMcf/d of natural gas in August 2018.

 


Hotchkiss, Alberta
Gross Production Group Plot of Surge's Oil & Natural Gas Wells


 
Hotchkiss Facilities

At Hotchkiss, Surge has ownership in the facilities outlined below. Details regarding the Company’s facilities will be provided in the virtual data room for parties that execute a confidentiality agreement.

 

Hotchkiss Reserves
 
The Hotchkiss property was evaluated as part of the Sproule Report and no reserves were assigned.

Hotchkiss LMR

As of May 7, 2022, Surge’s net deemed asset value for Hotchkiss was ($7.2 million) (deemed assets of $0 and deemed liabilities of $7.2 million), with an LMR ratio of 0.00.

 

Hotchkiss Well List

Click here to download the complete well list in Excel.

KAKUT

Township 72-79, Range 4-8 W6

At Kakut, Surge holds various working interest in 2.5 sections of land including a 2.0186% working interest in the Saddle Hills Doe Creek Unit No.1 operated by Canadian Natural Resources Limited.
 
There is currently no production from the Kakut property.

 



 
Kakut Facilities

The Company does not have ownership in any facilities at Kakut.

Kakut Reserves

The Kakut property was not evaluated in the Sproule Report.

Kakut LMR

The Company does operate any wells or facilities associated with the Kakut property.

Kakut Well List

Click here to download the complete well list in Excel.

NIPISI

Township 81, Range 8 W5

At Nipisi, Surge holds a royalty interest in one abandoned well.
 
There is currently no production from the Nipisi property.

 

 
Nipisi Facilities

The Company does not have ownership in any facilities at Nipisi.

Nipisi Reserves

The Nipisi property was not evaluated in the Sproule Report.

Nipisi LMR

The Company does not operate any wells or facilities associated with the Nipisi property.

Nipisi 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 July 7, 2022. Preference will be given to offers to acquire multiple properties; however, offers may be considered for individual properties. 


 
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.

Sayer Energy Advisors is accepting cash offers from interested parties until
noon on Thursday July 7, 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.

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 (brye@sayeradvisors.com) or fax (403.266.4467).

Included in the confidential information is the following: summary land information, LMR information, the Sproule Report, 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 Grazina Palmer at 403.266.6133.

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