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Close Pending  

2017 Property Offering

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The Paddon Hughes Development Co. Ltd. (“Paddon Hughes”) has retained CB Securities Inc. (“CB Securities”) as its exclusive advisor for the sale of its properties in either a property or a corporate transaction. This program is an invitation to submit a Non-Binding Bid by June 21st, 2017.


Opportunity Summary

Paddon Hughes holds many non-operated working interests, freehold and over-riding royalty interests, and non-operated facility interests with third party processing revenues. There is only one operated well that is contract operated. The working interests and royalty interests are in very long life wells, most of which have been producing for many decades and historically produced very large volumes of oil and gas. Current net production is summarized in the following table.
 

Paddon Hughes revenue and expenses for the past 3 years of actuals plus the next 3 years of GLJ forecast is summarized in the following table.

 

Note that GLJ offset operating costs with some of the facility processing income in its forecasts. Operating costs adjusted for all facility processing income results in ~$10/BOE.

Paddon Hughes maintained more than $1 million of income (before G&A) in the low price environments experienced in 2015 and 2016 due to its owned facility third party processing income and its royalty income. The low oil and natural gas prices still generated enough income to offset the operating expenses in the working interest properties during that period.  With an overall 10% average decline, it is likely that there will be more higher income years in the future as oil and/or gas prices change.

Paddon Hughes is relatively easy to evaluate. The vast majority of the value is from 4 core geographical areas, specifically the Moose Mountain area, the Twining area, the Crossfield area, and the Sylvan Lake, Medicine River, and Gilby area, in which Paddon Hughes holds their most significant working interests, facility interests, and royalty interests.

In order to help prospective purchasers with the evaluation of Paddon Hughes, a rigorous third party engineering evaluation has been prepared by GLJ Petroleum Consultants effective December 31, 2016.

An attachment provides a summary of the main properties, and the overall production, cash flow, reserves, net present values, and operating parameters.

Additional detailed information on the property is provided in the Offering Circular that is available for review by contacting CB Securities.  Execution of a Confidentiality Agreement will allow potential purchasers to gain access to the Virtual Data Room.

Please click on links above to view the attachments

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 Data Book and the Virtual Data Room.  Please contact info@cbsecurities.com to receive either document.


Offering Procedure

Each interested party is asked to submit a Non-Binding Bid by noon on Wednesday, June 21, 2017 to the attention of CB Securities.  From the Non-Binding Bids received Paddon Hughes will identify the parties with whom to work toward concluding a transaction.

Paddon Hughes 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 its 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 Purchase and Sale Agreement between Paddon Hughes and the successful purchaser shall be binding on Paddon Hughes.

Paddon Hughes 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.  Paddon Hughes also reserves 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 info@cbsecurities.com.