Current Offerings
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NAL Resources Introductory Letter
NAL Resources Confidentiality Agreement
NAL Resources Information Memorandum
NAL to Divest Non-Core Alberta and Southeast Saskatchewan Assets
August 16, 2010
NAL Resources (“NAL” or the “Company”), on behalf of Manulife and the NAL Oil and gas Trust, has initiated a process to divest certain non-core oil and natural gas properties in Alberta, Saskatchewan and British Columbia and has retained FirstEnergy Capital Corp. (“FirstEnergy”) as its exclusive financial advisor for the offering (the “Offering”). The assets are divided into 10 packages (the “Packages”) for description and review that in aggregate produced 1,781 BOE/d (~45% oil and liquids) in April 2010.
Production, Income and Reserves Summary
Package
April 2010
Annualized
Reserves Volumes
Reserves Values
Average Production
2010
Total Proved
Proved Plus Probable
Pre-tax NPV@10%
Liquids
Gas
Total
NOI
Liquids
Gas
Total
Liquids
Gas
Total
TP
P+P
(bbl/d)
(Mcf/d)
(BOE/d)
(M$)
(Mbbl)
(MMcf)
(MBOE)
(Mbbl)
(MMcf)
(MBOE)
(M$)
(M$)
Joffre
346
626
450
6,121
1,847
2,209
2,215
2,294
3,187
2,825
37,771
44,021
Southeast Saskatchewan
358
0
358
4,968
1,011
0
1,011
1,295
0
1,295
19,485
23,419
Hangingstone
0
1,778
296
1,549
0
3,487
581
0
4,988
831
7,420
10,942
Manola
9
531
98
745
11
0
11
19
2,107
370
2,162
4,337
Medicine Hat
0
1,402
234
1,215
0
2,352
392
0
2,933
489
2,385
3,530
East Central Alberta
17
344
75
616
66
720
186
73
878
220
2,096
2,529
Peace River Arch
20
390
85
459
13
560
106
17
776
147
1,380
1,931
Drayton
32
467
109
700
42
512
127
51
670
162
1,375
1,758
West Central Alberta
1
368
63
226
17
127
38
18
182
48
561
681
Rainbow Lake
13
0
13
106
27
0
27
30
0
30
420
473
Total
796
5,907
1,781
16,705
3,033
9,966
4,694
3,797
15,720
6,417
75,054
93,620
Production is from April 2010 Financials. NPV's shown are before tax and use the appropriate Provincial royalty regime. Production volumes do not include royalty interest volumes.
Reserves prepared by McDaniel & Associates Consultants Ltd. Effective July 1, 2010 using McDaniel July 2010 forecast pricing and compliant with NI 51-101.
Key Attributes of the Divestiture Include:
The assets are primarily mature interests that have seen limited recent development activity as capital has been allocated to other core properties. The Packages also include properties that were acquired by NAL through its acquisitions of Alberta Clipper and Breaker Energy during 2009. The majority of the reserves value is associated with producing assets, leaving room for realization of upside value through the development of unbooked opportunities.
NAL Resources (“NAL” or the “Company”), on behalf of Manulife and the NAL Oil and gas Trust, has initiated a process to divest certain non-core oil and natural gas properties in Alberta, Saskatchewan and British Columbia and has retained FirstEnergy Capital Corp. (“FirstEnergy”) as its exclusive financial advisor for the offering (the “Offering”). The assets are divided into 10 packages (the “Packages”) for description and review that in aggregate produced 1,781 BOE/d (~45% oil and liquids) in April 2010.
| Production, Income and Reserves Summary | ||||||||||||
| Package | April 2010 | Annualized | Reserves Volumes | Reserves Values | ||||||||
| Average Production | 2010 | Total Proved | Proved Plus Probable | Pre-tax NPV@10% | ||||||||
| Liquids | Gas | Total | NOI | Liquids | Gas | Total | Liquids | Gas | Total | TP | P+P | |
| (bbl/d) | (Mcf/d) | (BOE/d) | (M$) | (Mbbl) | (MMcf) | (MBOE) | (Mbbl) | (MMcf) | (MBOE) | (M$) | (M$) | |
| Joffre | 346 | 626 | 450 | 6,121 | 1,847 | 2,209 | 2,215 | 2,294 | 3,187 | 2,825 | 37,771 | 44,021 |
| Southeast Saskatchewan | 358 | 0 | 358 | 4,968 | 1,011 | 0 | 1,011 | 1,295 | 0 | 1,295 | 19,485 | 23,419 |
| Hangingstone | 0 | 1,778 | 296 | 1,549 | 0 | 3,487 | 581 | 0 | 4,988 | 831 | 7,420 | 10,942 |
| Manola | 9 | 531 | 98 | 745 | 11 | 0 | 11 | 19 | 2,107 | 370 | 2,162 | 4,337 |
| Medicine Hat | 0 | 1,402 | 234 | 1,215 | 0 | 2,352 | 392 | 0 | 2,933 | 489 | 2,385 | 3,530 |
| East Central Alberta | 17 | 344 | 75 | 616 | 66 | 720 | 186 | 73 | 878 | 220 | 2,096 | 2,529 |
| Peace River Arch | 20 | 390 | 85 | 459 | 13 | 560 | 106 | 17 | 776 | 147 | 1,380 | 1,931 |
| Drayton | 32 | 467 | 109 | 700 | 42 | 512 | 127 | 51 | 670 | 162 | 1,375 | 1,758 |
| West Central Alberta | 1 | 368 | 63 | 226 | 17 | 127 | 38 | 18 | 182 | 48 | 561 | 681 |
| Rainbow Lake | 13 | 0 | 13 | 106 | 27 | 0 | 27 | 30 | 0 | 30 | 420 | 473 |
| Total | 796 | 5,907 | 1,781 | 16,705 | 3,033 | 9,966 | 4,694 | 3,797 | 15,720 | 6,417 | 75,054 | 93,620 |
| Production is from April 2010 Financials. NPV's shown are before tax and use the appropriate Provincial royalty regime. Production volumes do not include royalty interest volumes. | ||||||||||||
| Reserves prepared by McDaniel & Associates Consultants Ltd. Effective July 1, 2010 using McDaniel July 2010 forecast pricing and compliant with NI 51-101. | ||||||||||||
Key Attributes of the Divestiture Include:
The assets are primarily mature interests that have seen limited recent development activity as capital has been allocated to other core properties. The Packages also include properties that were acquired by NAL through its acquisitions of Alberta Clipper and Breaker Energy during 2009. The majority of the reserves value is associated with producing assets, leaving room for realization of upside value through the development of unbooked opportunities.
Joffre Package (T38-41, R26W4-1W5)
- April 2010 net sales production of 346 bbl/d oil and NGL’s and 626 Mcf/d gas (450 BOE/d); 100% NAL operated
- 80.98% interest in Joffre D-2 Unit No. 1 (Nisku); Gull Lake stable Mannville gas production
- Low decline, long reserves life production (13.5 years TP); 99% of Total Proved reserves are Proved Producing
- Large OOIP (179 MMbbl) with current 29% RF and stable ~50% oil cut; provides large oil opportunity base
- Waterflood optimization and potential future tertiary recovery through CO2 flooding
Southeast Saskatchewan Package (T5-7, R12-14W2)
- April 2010 net sales production of 358 bbl/d oil; 79% NAL operated
- 100% interest in Weyburn Midale Beds Voluntary Unit No. 5 and 50% in Enerplus operated Unit No. 10
- ~8% annual decline; 1,295 MBOE of Proved plus Probable reserves, 1,011 MBOE of Proved (100% PDP)
- Several low-risk opportunities have been identified
- 5 reactivations of high water-cut wells, waterflood optimization and CO2 flooding
- Undeveloped Bakken land on edge of main Bakken fairway
Hangingstone Package (T81-84, R6-11W4)
- April 2010 net sales production of 1.8 MMcf/d gas (296 BOE/d); Devon operated
- ~8% annual decline; Total Proved plus Probable reserves of 831 MBOE, all Proved reserves are Proved Producing
- Gas-Over-Bitumen royalty credits reduce royalties and offset revenue losses due to ERCB mandated shut-ins
Manola Package (T57-62, R26W4-5W5)
- April 2010 net sales production of 531 Mcf/d gas and 9 bbl/d oil and NGL’s (98 BOE/d); 82% NAL operated
- 8 producing gas wells; production from Wabamun, Ellerlsie, Glauconitic and Belly River
- Opportunities include recompletions and exploration
Medicine Hat Package (T10-19, R1-7W4)
- April 2010 net sales production of 1.4 MMcf/d gas (234 BOE/d) from Milk River, Medicine Hat and Bow Island
- 29.14% interest in EOG-operated Med Hat Hilda Gas Unit No. 2; 100% interest in primarily Bow Island gas rights
- Opportunities include 292 Milk River unit infills and up to 5 Bow Island standing wells to complete and tie-in
East Central Alberta Package (T32-46, R8-25W4)
- April 2010 net sales production of 344 Mcf/d gas and 17 bbl/d oil & NGL’s (75 BOE/d)
- Total Proved plus Probable reserves of 220 MBOE; all Proved reserves are Proved Producing
- Identified opportunities to add incremental production of ~40 Mcf/d gas and 20 bbl/d oil
- 100% W.I. in mature Ellerslie ‘MMM’ oil pool at Veteran; optimization and reactivation opportunities
- 3 Belly River gas reactivations at Rosalind
Peace River Arch Package (T70-87, R26W5-13W6)
- April 2010 net sales production of 390 Mcf/d gas and 20 bbl/d oil & NGL’s (85 BOE/d); 75% NAL operated
- ~7% annual decline, Total Proved plus Probable reserves of 147 MBOE
- Low operating costs forecast to average $8.97/BOE in 2010
- 2 low cost reactivation opportunities and future horizontal Montney potential
Drayton Package (T43-52, R3-10W5)
- April 2010 net sales production of 467 Mcf/d gas and 32 bbl/d oil and NGL’s (109 BOE/d); 77% NAL operated
- Production from Banff, Rock Creek, Mannville and minor oil from Belly River
- Primarily mature but stable production; low operating costs forecast to average $15.53/BOE in 2010
- Opportunities include horizontal Cardium development on 5 gross operated sections
West Central Alberta Package (T61-73, R8-21W5)
- April 2010 net sales production of 368 Mcf/d gas and 1 bbl/d oil (63 BOE/d)
- Operated, non-operated and royalty interest properties; future GORR revenue through Second Wave farm-out
Rainbow Lake Package (T107-108, R9-10W6)
- April 2010 net sales production of 13 bbl/d oil from Muskeg and Keg River; Husky operated
- Q2 2011 implementation of Muskeg ‘K’ Pool waterflood, RF projected to rise from current 11% to 29%
Description of the Sales Process
Parties who execute a Confidentiality Agreement (“CA”) will have access to confidential information that is available within an online data room and physical data rooms located at FirstEnergy’s offices. These will open the week of August 16, 2010 and will include reserves reports, well lists, lease operating statements, well files and other relevant information. A copy of the CA is available on the FirstEnergy website at www.firstenergy.com/NAL or can be obtained by contacting FirstEnergy directly. Non-binding proposals are due Thursday, September 30, 2010 at 12:00 PM (MDT).
Reserves for the Packages have been evaluated by McDaniel & Associates Consultants Ltd. (“McDaniel”) with an effective date of July 1, 2010, utilizing McDaniel July 2010 forecast pricing. To facilitate review, a Value Navigator database of the reserves will be available within the confidential information.
FirstEnergy has prepared an Information Memorandum (“IM”) which includes detailed information relating to the Packages, reserves and opportunities. The IM will be available the week of August 16, 2010 and electronic copies will be available for download from the FirstEnergy website; hard copies can be obtained by contacting FirstEnergy personnel directly.
Offers will be considered on a Package, or combination of Packages, basis. Offers may not be entertained on individual properties. It is NAL’s intention to divest the assets for cash.
Please direct all correspondence and inquiries relating to the Offering to FirstEnergy at:
Description of the Sales Process
Parties who execute a Confidentiality Agreement (“CA”) will have access to confidential information that is available within an online data room and physical data rooms located at FirstEnergy’s offices. These will open the week of August 16, 2010 and will include reserves reports, well lists, lease operating statements, well files and other relevant information. A copy of the CA is available on the FirstEnergy website at www.firstenergy.com/NAL or can be obtained by contacting FirstEnergy directly. Non-binding proposals are due Thursday, September 30, 2010 at 12:00 PM (MDT).
Reserves for the Packages have been evaluated by McDaniel & Associates Consultants Ltd. (“McDaniel”) with an effective date of July 1, 2010, utilizing McDaniel July 2010 forecast pricing. To facilitate review, a Value Navigator database of the reserves will be available within the confidential information.
FirstEnergy has prepared an Information Memorandum (“IM”) which includes detailed information relating to the Packages, reserves and opportunities. The IM will be available the week of August 16, 2010 and electronic copies will be available for download from the FirstEnergy website; hard copies can be obtained by contacting FirstEnergy personnel directly.
Offers will be considered on a Package, or combination of Packages, basis. Offers may not be entertained on individual properties. It is NAL’s intention to divest the assets for cash.
Please direct all correspondence and inquiries relating to the Offering to FirstEnergy at:
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Richard J. Matthews
Vice President & Director Acquisitions & Divestitures
403-262-0677
Mark C. Pearson
Associate, Acquisitions & Divestitures
403-444-8284
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Derek T. Kreba
Associate, Acquisitions & Divestitures
403-262-0660
Stacey D. Epp
Analyst, Acquisitions & Divestitures
403-444-4897
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NAL Resources Information Memorandum
Copyright © FirstEnergy Capital Holdings Corp. 2010 |
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