Sale would allow company to concentrate on Montney, improve balance sheet
Calgary based Birchcliff Energy (ticker: BIR) said it will pursue the sale of its oil and natural gas properties and related assets on the Charlie Lake Light Oil Resource Play located in the Peace River Arch of Alberta.
Birchcliff CEO Jeff Tonken said, “We believe that a successful sale will allow us to become even more geographically focused, reduce our cost structure even further and become even more competitive in our industry, while improving our balance sheet. The sales process comes at a time when we have significant financial flexibility, which will allow us to consider only top value bid proposals.”
In a statement, the company said that any cash proceeds resulting from a completed transaction will be used to initially reduce indebtedness under Birchcliff’s credit facilities, which will be subsequently redrawn as needed to fund Birchcliff’s ongoing capital expenditure programs and for general corporate purposes.
The company said its Charlie Lake Assets have the following attributes:
| 2017 Estimated Annual Average Production | 3,800 boe/d | |||
| 2017 Q3 Estimated Average Production | 4,000 boe/d | |||
| % Light Oil and NGLs | 56% | |||
| % Natural Gas | 44% | |||
| Proved Reserves(1)(2) | 24.6 million boe | |||
| Net Present Value of Proved Reserves(1)(2)(3) | $368.4 million | |||
| Proved Plus Probable Reserves(1)(2) | 47.8 million boe | |||
| Net Present Value of Proved Plus Probable Reserves(1)(2)(3) | $604.9 million | |||
| Land Holdings – 86% Average Working Interest(1) | ||||
| Acres | 383,368.9 (329,866.6 net) | |||
| Sections | 599.0 (515.4 net) | |||
| (1) | At December 31, 2016. | |||
| (2) | Based on an independent evaluation prepared by Birchcliff’s independent qualified reserves evaluator, Deloitte LLP (“Deloitte”), effective December 31, 2016 (the “Deloitte Reserves Report”), estimated using Deloitte’s forecast price and cost assumptions effective December 31, 2016. | |||
| (3) | Before tax net present value based on a 10% discount rate. | |||
The company said it anticipates a data room will be open at the end of April or early May.
