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Bonavista |
Bids Due: November 25, 2011 |
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Contact: 403-299-8453 |
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Introduction Letter |
Sale Timeline and Process | Disclaimer | Overview |
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OVERVIEW
Highlights
- Diverse portfolio of royalty interests currently producing from ~433 wells
- ~263,000 gross acres of royalty interest lands
- Annualized 2011 royalty income of ~$4.8MM
- Average royalty interest production from January to May 2011 was ~549 boe/d
- Significant future growth potential from development drilling in long life plays
- RLI of ~15 years based on 2P Reserves of 2.967 MMboe
- Total Proved plus Probable value of $56.49MM (NPV@10%)
Overview
Bonavista Energy Corporation (“Bonavista” or the “Company”) has retained RBC Rundle as the exclusive agent for the sale of a large portfolio of oil and gas gross overriding royalties (the “Royalty Interest” or “Royalties”) located in the provinces of British Columbia, Alberta and Saskatchewan. The royalty interest lands and production have largely been accumulated over Bonavista’s 14 year history, post the 1997 re-organization.
The royalty interests have been grouped into three packages for disposition; British Columbia (“BC”) Montney, Alberta (“AB”) Deep Basin and Diversified. The BC Montney Royalty package is characterized by long life gas production from horizontal well development in the Montney Formation and significant future potential. The AB Deep Basin Royalty package is also characterized by future growth potential from liquids rich, multiple zone gas development that utilizes both vertical and horizontal wells. The Diversified Royalty package, with the largest number of wells and greatest variety of producing formations and play types, is characterized by a low risk, established and consistent production history. The three royalty interest packages may be purchased separately or collectively.
This divestiture offers a unique opportunity to own a high quality, and diverse portfolio of royalty interest production that has long life reserves and considerable future upside through continued development and commodity price.
Land
In total, Bonavista is offering ~263,000 gross acres of royalty interest lands in British Columbia, Alberta and Saskatchewan subject to a variety of terms. In addition to royalty interests on producing lands earned through participation in the drilling of wells, Bonavista often holds interests on adjacent undeveloped lands which have significant future potential at no further cost to Bonavista.
The BC Montney package has a total of 19,900 gross acres of royalty lands, consisting of 16,735 developed acres and 3,165 undeveloped acres. Since the Montney project involves landing horizontal wells within the Upper and Lower Montney sections and development to date has focused on the Upper section, the “undeveloped acreage” does not accurately reflect the significant scope of future growth potential of the royalty production.
The AB Deep Basin package has a total of 22,541 gross acres of royalty lands which also have a large component of future growth potential through development drilling on existing proven acreage and 7,007 acres of undeveloped lands.
The Diversified Royalty package has a total of 220,862 gross acres of royalty lands across several properties located in central and southern Alberta and south west Saskatchewan. A large component of undeveloped acreage, 51,072 acres, provides on-going exposure to future drilling.
Production
Royalty interest production from the Bonavista lands is currently delivered from approximately 433 wells. Average production for all three royalty packages was ~3,021 Mcf/d of gas, 29 bbl/d of natural gas liquids and 17 bbl/d of oil during the period January 2011 to May 2011.
Reserves
A recent report by GLJ Petroleum Consultants assigned a total of 2,967 Mboe to the royalty interest packages.
Proved Producing reserves totaling 945 Mboe were assigned to ~433 active wells. Proved Undeveloped reserves totaling 1,134 Mboe were assigned to 84 identified drilling locations, the majority to the BC Montney and Alberta Deep Basin packages. Probable Additional reserves of 879 Mboe included 13 drilling locations and improved recoveries from existing producing wells. A small amount of Proved Non-producing reserves, 9 Mboe, was assigned to shut-in wells or zones.
