PROPOSALS DUE: Phase 1 non-binding proposals due 5:00 PM (MDT), Friday, April 26, 2019
Elcano Exploration Inc. and its affiliates Elcano Exploration Ltd. and Elcano Energy Partnership (collectively, “Elcano” or the “Company”) have obtained an initial order under the Companies’ Creditors Arrangement Act (“CCAA”) from the Alberta Court of Queen’s Bench which has, among other things, approved a Sale and Investment Solicitation Process (“SISP”). Elcano has retained GMP Securities L.P. (“GMP FirstEnergy”) as its SISP Advisor. Elcano is a private exploration and production company focused on light oil in the Williston Basin, primarily in Manitoba. Elcano has organically assembled an operated, high working interest asset base with core properties consisting of North Hargrave, Two Creeks and Manson. All producing areas are connected to a common gathering system and battery. During February 2019, light oil sales from the Lodgepole, Amaranth and Bakken formations averaged 518 bbl/d with more than 340 bbl/d of additional production behind pipe associated with optimization projects identified by the Company. Furthermore, Elcano is in process of finalizing its Amaranth waterflood application and is expecting approval in Q3 2019.
Industry activity in southwest Manitoba has persisted in the current pricing environment due to strong realized prices for light crude oil, and a stable regulatory system with competitive drilling incentives and royalty structure. Since its inception in 2012, Elcano has discovered an estimated 40 MMbbl of OOIP through exploration drilling and utilization of its large database of proprietary and trade 3D and 2D seismic. The Company has developed several prolific Lodgepole and Amaranth light oil pools within its core area (North Hargrave and Two Creeks properties) with 100% ownership in its facilities including an extensive emulsion gathering system and a central battery that has established low operating costs and generates considerable third party processing and water disposal revenue.
*Gross lease OOIP where Sproule Proved plus Probable reserves have been assigned.
The SSIP is intended to solicit interest in, and opportunities for, a sale of all or part of the assets, property and undertakings of Elcano or for an investment in, restructuring, recapitalization, refinancing or other form of reorganization of all or part of Elcano or its business. A Confidentiality Agreement (“CA”) can be obtained by contacting GMP FirstEnergy directly or on GMP FirstEnergy’s website. Parties who execute a CA will have access to the confidential information available in the online data room. Proposals will be due on Friday, April 26, 2019 at 5:00 PM MDT.
Please direct all correspondence and inquiries to GMP FirstEnergy: