Bow River Energy Ltd. — CCAA Sale & Investment Opportunity

Bow River Energy Ltd. (“Bow River” or the “Company”) has engaged Sayer Energy Advisors to assist with the marketing and consummating a transaction with respect to all of the Company’s oil and natural gas properties. The transaction may be a sale of all, or substantially all, of Bow River’s properties, or alternatively, it may take the form of an investment in the Company through a recapitalization, refinancing or other form of restructuring.

On June 1, 2020, Bow River obtained an initial order under the Companies’ Creditors Arrangement Act (“CCAA”) from the Court of Queen’s Bench of Alberta (the “Court”) appointing BDO Canada Limited as Court-appointed Monitor. 

The Court approved the sales and investment solicitation process (“SISP”) on July 24, 2020, along with the Company entering into a purchase and sale agreement (the “Stalking Horse APA”) to sell certain of Bow River’s oil and natural gas interests in the Fleeing Horse and Black Creek areas of Alberta (the “Stalking Horse Properties”) to 2270943 Alberta Ltd. for approximately $4.18 million. The Stalking Horse APA was approved by the Court on July 24, 2020. Through the SISP, Bow River, with the assistance of Sayer, will be soliciting offers considered superior to the Stalking Horse APA, as well as marketing the entirety of Bow River’s properties and business for sale or for an investment opportunity.

The Company’s core assets are located in the Provost area of Alberta as well as several properties in northwestern and west central Saskatchewan. The Alberta properties include the Fleeing Horse, Red Lion, Amisk, Black Creek, Dolcy and Minor Alberta properties. The Saskatchewan properties consist of a heavy oil property in the Hallam/Zoller area of west central Saskatchewan and several natural gas properties in the Fort Pitt, BronsonMakwa, Red Springs, Beacon North, Beacon Hill, Primrose, West Central SK Minor and Northwestern SK Minor areas. Additionally, there are non-operated working interests and reclamation wells which are grouped separately from the other properties (collectively the “Properties”).

The Stalking Horse Properties include production of approximately 430 barrels of oil per day from approximately 8.75 net sections of land in the Fleeing Horse and Black Creek areas, near Provost, Alberta. The Stalking Horse Properties are operated by Bow River with 100% working interest and have an LMR of 2.58 ($24.5 million deemed asset value and $9.5 million deemed liabilities) as of July 4, 2020. The Stalking Horse Properties include 141 operated wellbores and ten facilities. Further details on what the Stalking Horse Properties entail will be provided to parties that sign a confidentiality agreement. All further sales and investments will be subject to approval from the Court in Bow River’s CCAA proceedings.

Average production net to the Company from the Properties for the first quarter of 2020 was approximately 1,792 boe/d (1,174 barrels of oil and natural gas liquids per day and 3.7 MMcf/d of natural gas).

The Company has ownership in various proprietary 2D and 3D seismic data over several of the properties. Information on the seismic ownership will be made available in the data room to parties that execute a Confidentiality Agreement.

As of July 4, 2020, Bow River’s Alberta Properties had net deemed asset value of $2,650,856 (deemed assets of $47,196,762 and deemed liabilities of ($44,545,906)) with an LMR of 1.06. As of June 28, 2020, Bow River’s Saskatchewan Properties had net deemed asset value of $2,148,385 (deemed assets of $28,294,960 and deemed liabilities of ($26,146,575)) with an LMR of 1.08.

Further details regarding the marketing process can be found on our website at www.sayeradvisors.com. Summary information relating to this divestiture is attached to this correspondence. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement.

Binding offers as outlined in the SISP relating to this opportunity will be accepted until 12:00 pm on Monday, August 24, 2020.

For further information relating to this process please feel free to contact: Ben RyeGrazina Palmer or Tom Pavic at 403.266.6133.