NAL Central Alberta & SE Saskatchewan Opportunity 

NAL Resources Management Ltd. (“NAL”) has initiated a process for the disposition of assets in Western Canada and has retained Scotiabank as its exclusive financial advisor to assist in this process.

 

This process presents an opportunity to acquire a material and free cash flow generating asset(s) with significant multi-zone drilling upside and infrastructure ownership.

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Summary

Asset SUmmary

- 13,928 boe/d (42% liquids) of established, low decline production

- ~610,000 net acres of mineral rights

- Multi-zone production base underpinned by a large inventory of future development locations

-Infill drilling, play expansion and enhanced recovery development opportunities

- Assets have been undercapitalized in recent years

- Extensive operated infrastructure network provides low cost development flexibility

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Area Highlights

Sylvan Lake

Asset SUmmary

Production

-     5,245 boe/d  (45% liquids)

Mineral Rights (net)

-     213,481 acres

2P Reserves

-     19,032 Mboe

2019 NOI (annualized)

-     $26.8 MM

2019 Free Cash Flow (annualized)

-     $26.3 MM

 

Key Attributes

-     Large, contiguous land position with high working interest

-     Low decline production with favourable liquids weighting

-     Multi-zone production and drilling inventory

-     Operatorship of the Sylvan Lake Gas Plant

Westerose

Asset SUmmary

Production

-     3,468 boe/d  (52% liquids)

Mineral Rights (net)

-     106,312 acres

2P Reserves

-     16,230 Mboe

2019 NOI (annualized)

-     $15.4 MM

2019 Free Cash Flow (annualized)

-     $14.1 MM

 

Key Attributes

-     Low decline, liquids-rich production has been maintained with minimal capital allocation

-     Non-operated Leduc oil units create stable cash flow

-     Multi-zone production and drilling inventory

Olds

Asset SUmmary

Production

-     3,404 boe/d  (21% liquids)

Mineral Rights (net)

-     191,259 acres

2P Reserves

-     11,683 Mboe

2019 NOI (annualized)1

-     $6.4 MM

2019 Free Cash Flow (annualized)1

-     $6.4 MM

 

Key Attributes

-     Low decline and high working interest with the ability to grow liquids production through Cardium and Wabamun development

-     Identified oil inventory with promising offsetting activity

-     100% ownership of the Olds Gas Plant provides operational flexibility and generates third party revenue

 

1Excludes Olds Gas Plant turnaround; scheduled plant turnarounds occur every 3 years.

 

 

 

 

Joffre

Asset SUmmary

Production

-     587 boe/d  (94% liquids)

Mineral Rights (net)

-     23,868 acres

2P Reserves

-     2,073 Mboe

2019 NOI (annualized)

-     $8.1 MM

2019 Free Cash Flow (annualized)

-     $5.9 MM

 

Key Attributes

-     100% working interest in the Joffre Viking Tertiary Oil Unit which has low decline production from a successful CO2 EOR scheme

-     Opportunities exist to capture significant incremental oil volumes through enhancement and expansion of the EOR recovery scheme

Strachan

Asset SUmmary

Production

-     965 boe/d  (22% liquids)

Mineral Rights (net)

-     68,970 acres

2P Reserves

-     4,770 Mboe

2019 NOI (annualized)

-     $2.5 MM

2019 Free Cash Flow (annualized)

-     $2.5 MM

 

Key Attributes

-     Land base intersects Glauconitic Hoadley Barrier Trend, Ellerslie channels and Cardium fairway

-     Undercapitalized area with multi-zone production and significant drilling inventory

Browning

Asset SUmmary

 

Production

-     259 boe/d  (96% liquids)

Mineral Rights (net)

-     5,220 acres

2P Reserves

-     1,169 Mboe

2019 NOI (annualized)

-     $3.6 MM

2019 Free Cash Flow (annualized)

-     $2.8 MM

 

Key Attributes

-     Shallow decline oil production with low cost drilling opportunities targeting Frobisher and Alida formations

Process: Timetable

 

Virtual Data Room Open: Week of September 9, 2019

 

Management Presentations Commence: Week of September 23, 2019

Transaction Structure

It is currently contemplated that the transaction(s) will be structured as ‘asset sale transactions’.

 

Confidential Information

Confidential data relating to the assets is expected to be available the week of September 9, 2019 to parties that have executed a Confidentiality Agreement.  Interested parties should execute and deliver one copy of the Confidentiality Agreement to Scotiabank. Confidential information will be available in the on-line Virtual Data Room and through a management presentation.

 

Proposals

NAL will give consideration to all proposals. Proposal submission instructions and date will be communicated to parties that execute a Confidentiality Agreement.

 

Consideration

NAL prefers cash consideration for each of the packages.

 

Form of Offer

Proposals for multiple packages and/or full packages (as outlined) are preferred.

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    Interested parties are asked to refrain from directly contacting NAL employees. Any questions related to this offering can be directed to a Scotiabank representative listed above.