Pond Technologies Holding Inc. & Grizzly Resources Ltd.
2018 Pembina Nisku Light Oil Property Offering
Pond Technologies Holdings Inc. (“Pond”) and Grizzly Resources Ltd. (“Grizzly”) have retained CB Securities Inc. (“CB Securities”) as their exclusive advisor for the sale of their working interests in the Pembina Nisku oil property. This is an invitation to submit a Non-Binding Bid by June 28, 2018 for either company’s working interests or as a combination.
- Original oil-in-place is 7.4 MMBbls plus a significant gas cap
o Well-delineated Nisku pool defined by existing wells and 3D seismic
o High porosity (>10%), high permeability (800 mD), high productivity
o Produce oil under waterflood until ~95% watercut, then blow down the gas cap
- Recovery factors forecast to range from 30% to 38%
o Cumulative recovery of Sproule estimated OOIP is only 13%
o Most analogous Nisku pools in the area typically have recovery factors of ~45%
o Some Nisku pools in the area under tertiary miscible flood (after completion of a secondary waterflood) have ultimate recovery factors exceeding 75%
- 2 producing wells, 1 water injection well, 1 potential water injector well, and associated pad facilities
- Pond had a 15.625% working interest
- Grizzly has a 46.875% operated working interest and is the operator of record
o Property is contract operated by a third party
- Gross production has recently averaged ~1,025 BOE/day
o 800 Bbls/day light 42° API oil, 1.0 MMcf/day sales gas, and 60 Bbls/day NGL
o Both producing wells choked as necessary to keep a VRR of ~1
- Major upsides for this pool are:
o achieving a higher ultimate secondary waterflood recovery factor than forecast
o future implementation of a tertiary miscible flood
o fee reductions to extend the economic producing life of the wells
- Grizzly LMR of 95.1 with $32.7 million of deemed assets and $0.3 million of deemed liabilities
The 09-05 well initially flow tested at a restricted rate of 1,760 Bbls/day of oil. Water has not yet broken through with the water injection well situated on the other side of the pool. The waterflood is probably acting more like a bottom water drive profile in this well rather than the flank water drive profile of the 3/14-05 well. Recovery from this well is anticipated to be greater than the forecast 25% to 33% economic recovery factors, and recovery should more reflect the typical 45% recovery factors from offsetting analogies. This well is accessing ~5.43 MMBbls of original oil-in-place (OOIP).
The 3/14-05 well initially flow tested at a restricted rate of 2,025 Bbls/day, and has since experienced water breakthrough with its proximity to the 2/10-05 water injection well. The decline trend in the 3/14-05 well should follow that of the offsetting 13-02-50-06 W5M analogy well. Recoveries from the 3/14-05 well are anticipated to be greater than the currently forecast 35% to 38% economic recovery factors since the current operating cost structure causes this well to become uneconomic at ~150 Bbls/day and should be renegotiable with Sinopec at or before that point is reached. This well is accessing ~1.94 MMBbls of OOIP.
Analogy Well Production Plot
Please click link above to see attachment
Additional detailed information on the property is provided in the Non-Confidential Offering Circular. Execution of a Confidentiality Agreement will allow potential purchasers to gain access to the Virtual Data Room. Please contact email@example.com to receive either document.
Interested parties are asked to submit a Non-Binding Bid by noon on Thursday, June 28th, 2018. Bidders have the option of submitting an offer for either Pond’s 15.625% working interest or Grizzly’s 46.875% working interest as standalone, or for the combined 62.5% working interests. Pond and Grizzly will decide on their own whether to accept and proceed with any proposed transaction.
It is each of Pond’s and Grizzly’s intention that an industry standard Purchase and Sale Agreement with a 10% deposit be executed as soon as possible with the successful purchaser. Closing is anticipated to occur in August 2018.
An offer should contain the offer price for the property as an asset transaction, any financing conditions and transaction timing as applicable, any approval requirements, as well as expected timing to remove proposed offer conditions, execute a binding Purchase and Sale Agreement with deposit, and the expected closing date.
Pond, Grizzly, and CB Securities make no representation or warranty as to the accuracy or completeness of the information provided in connection with this Offering. Each potential purchaser should rely on their own investigation and due diligence to satisfy itself as to all matters relating to this Offering. Only those representations or warranties expressly agreed to in an executed Acquisition Agreement shall be binding on Grizzly or Pond.
Pond, Grizzly, and CB Securities reserve the right to modify the timing, procedures, and terms and conditions of this Offering, or to terminate this Offering at any time. Pond and Grizzly also reserve the right to accept or reject any or all offers at its sole discretion for any reason whatsoever.
Prospective purchasers wishing to participate in this Offering are requested to direct their inquiries to Darryl Derouin at 403.781.7041 or email at firstname.lastname@example.org.