Road 53 Resources Inc. – Corporate Divestiture
Road 53 Resources Inc. (“Road 53” or the “Company”) has engaged Sayer Energy Advisors to assist Road 53 with a sale of the shares of the Company.
Road 53 is a private junior oil and natural gas company with assets located in the Leckie area of Alberta (the “Property”). Road 53 is a tightly held private company with only six shareholders and no debt or severance costs. The Company currently has positive working capital of $1.0 million.
At Leckie, Road 53 holds a 100% working interest in certain P&NG rights in 35.5 sections of Crown land. The Property is located near the town of Brooks, Alberta.
The Property consists of a long-life, shallow natural gas production base from the Milk River and Medicine Hat formations with continued development of the CBM production base.
Average daily sales production net to Road 53 for the eleven months ended November 30, 2022, was approximately 4.4 MMcf/d of natural gas (4.8 MMcf/d gross production) and three barrels of oil and natural gas liquids per day (733 boe/d).
Operating income net to Road 53 for the eleven months ended November 30, 2022, was approximately $4.5 million or $4.9 million annualized, with operating costs averaging $1.29 per Mcf equivalent. Royalties are payable to Heritage Royalty Resources Corporation at 8%.
Road 53 prepared an internal reserves evaluation of the Property (the “Reserve Report”). The Reserve Report is effective January 1, 2023, using an average of Deloitte LLP, GLJ Ltd., McDaniel & Associates Consultants Ltd., Ryder Scott Company - Canada, Sproule Associates Limited and Trimble Engineering Associates Ltd. forecast pricing as of January 1, 2023. Road 53 estimated that, as of January 1, 2023, the Property contained remaining proved plus probable reserves of 39.3 Bcf of natural gas (6.6 million boe), with an estimated net present value of $31.6 million using forecast pricing at a 10% discount.
As of January 7, 2023, Road 53 had total deemed assets of $18.8 million, deemed liabilities of $10.9 million (net deemed assets of $7.9 million) with an LMR of 1.73.
More specific information relating to this divestiture is available at www.sayeradvisors.com. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement.
Proposals relating to this process will be accepted until 12:00 pm on Thursday, February 23, 2023.
For further information please feel free to contact: Ben Rye, Grazina Palmer, or Tom Pavic at 403.266.6133.
- Asset Sales and Acquisitions