Vermilion Energy Ltd. (“Vermilion”) has initiated a process for an asset sale and has retained Scotiabank Global Banking and Markets as its financial advisor.
This process presents an opportunity to acquire a light oil asset with low decline, multi-zone production and upside including attractive uphole recompletion opportunities.
Utikuma Lake Asset Highlights
Utikuma Lake Asset Map
- Utikuma Lake is an oil weighted asset producing 695 boe/d (January – July 2018 average)
- 97% liquids-weighted (40º API)
- 87% working interest
- Dependable base production consisting of low decline light oil (~7%) which provides stable free cash flow
- Net operating income of $5.1 MM in 2017 and $7.9 MM estimated in 2018(1)
- Netbacks of $20/boe in 2017 and $30/boe estimated in 2018
- Low risk reserves with 76% of reserves and value from producing assets
- Total 2P reserves of 4.7 MMboe with NPV10 of $68 MM
- Contiguous land position (operated with ~83% WI)
- 28,000 net acres, largely surface to basement rights
- Conventional water driven light oil reservoirs with low decline
- Predominantly Keg River and Gilwood production
- Additional producing formations include Slave Point and Falher
- Oil production has remained relatively flat with minimal development capital spend in recent years
- Limited activity includes five Keg River well workovers completed in 2017
- Upside potential includes low cost recompletion, workover and tighter pay opportunities
- Booked undeveloped reserves in Keg River and Gilwood zones
- Attractive uphole recompletion inventory
- Undercapitalized production with some wells exhibiting no decline
- Potential drilling along pool edges and reservoir pinch outs
- Owned and operated facilities and gathering infrastructure
- Operated treating facility with adequate capacity to accommodate growth
- 3D seismic coverage over asset area helps support drilling and pool extension potential
(1) Corporate lease ops January 2017 through May 2018 excluding corporate overhead and one time major expense projects in 2018
|Virtual Data Room Open||August 20, 2018|
|Evaluation Period||Week of August 20, 2018 to Week of Sept 24, 2018|
|Seismic Workstation Open||September 4, 2018
It is currently contemplated that the transaction will be structured as an ‘asset sale transaction’
Confidential data relating to the assets is expected to be available August 20, 2018 to parties that have executed a Confidentiality Agreement (PDF). Interested parties should execute and deliver two copies of the Confidentiality Agreement to Scotiabank. Confidential information will be available in the on-line Virtual Data Room and seismic workstation.
Bid date to be communicated to parties that have signed a Confidentiality Agreement (PDF).
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Interested parties are asked to refrain from directly contacting Vermilion’s employees.