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IKKUMA RESOURCES CORP.


PROPOSALS DUE: Will be available in the confidential information.






2018 NON-CORE DIVESTITURE

Ikkuma Resources Corp. (“Ikkuma” or the “Company”) has initiated a process to divest of certain non-core midstream and natural gas assets in Alberta and Northeast British Columbia (the “Offering”) and has retained GMP Securities L.P. (“GMP FirstEnergy”) as its exclusive financial advisor.  The Offering includes three packages: a strategic Foothills Midstream Package, a low decline producing Foothills Upstream Package and a NEBC Package.

  • Foothills Midstream Package - A unique opportunity to acquire substantial interconnected midstream assets within the Northwest and Central Alberta Foothills, which are connected and parallel to major market gas pipelines and in close proximity to Deep Basin Spirit River and Montney plays. 
    • Extensive network of large diameter sweet and sour gas pipeline infrastructure connected to key processing facilities with significant Ikkuma working interest capacity available over and above Ikkuma working interest throughput.
    • High degree of interconnectivity of infrastructure between assets and end markets, providing potential egress for natural gas production in NEBC and upstream of TCPL James River
  • Foothills Upstream Package - Low decline, stable and long RLI natural gas production from the deformed belt of the Northwest and Central Alberta Foothills.
    • Q4 2017 working interest production of 8,205 BOE/d including 48.7 MMcf/d of gas and 93 bbl/d of liquids.
    • Significant leverage to pricing with 2017 NOI of $6.9 MM under average realized gas prices of $2.18/Mcf.
    • Operating cost reduction opportunities including shut-in of deep sour gas and sweetening of the gas stream.
  • NEBC Package - Low decline base production with attractive opportunity to bring 5,000 BOE/d of sour natural gas production back on-stream with a moderate capital expenditure.
    • Package is comprised of two 100% working interest properties with stable, low decline working interest production of 929 BOE/d including 5.3 MMcf/d of gas and 39 bbl/d of liquids in Q4 2017.
    • Significant shut-in, historically low decline sour natural gas production of 30 MMcf/d that can be brought on stream with a $22 MM investment in acid gas injection and facilities.

Ikkuma Intro Map

DESCRIPTION OF THE PROCESS AND OFFERING STRUCTURE

Ikkuma has initiated a process to divest of certain non-core assets which includes three packages as defined in this letter. The defined midstream assets encompassed within the Foothills Midstream Package include the main trunk pipelines to connected facilities in which Ikkuma has ownership. The Foothills Upstream Package contains all wells, pipelines and facilities that connect to the defined midstream assets. All operating costs associated with both the Upstream and Midstream Packages are included within the Upstream Package for purposes of evaluation. The Company will consider offers on all or portions of the assets.

A Confidentiality Agreement (“CA”) will be made available on GMP FirstEnergy’s website or can be obtained by contacting GMP FirstEnergy directly. Parties who execute a CA will have access to the confidential information available in an online data room which will open the week of June 18, 2018. A bid deadline will be provided in July 2018 within the confidential information. Please direct all correspondence and inquiries to GMP FirstEnergy:

Scott Robertson
Director, Investment Banking
+1.403.444.4896
rsrobertson@gmpfirstenergy.com
Mark C. Pearson, P.Eng.
Director, Acquisitions & Divestitures
+1.403.444.8284
mcpearson@gmpfirstenergy.com
Kory Cross (CA Contact)
Associate, Investment Banking
+1.403.262.0634
krcross@gmpfirstenergy.com 
Omid Eslami, P.Eng. (Data Room Contact)
Associate, Acquisitions & Divestitures
+1.403.262.0613
oeslami@gmpfirstenergy.com 
Daniel Lee
Analyst, Investment Banking
+1.403.262.0624
djlee@gmpfirstenergy.com
David Lin
Analyst, Acquisitions & Divestitures
+1.403.262.0660
dlin@gmpfirstenergy.com