PROJECT PROFILES

Strategic Acquisition Assessment

QUICK FACTS

Client

Energy Infrastructure
and Supply Company

Location

Southern Alberta

Project Type

Asset Evaluation

Engagement Date

February 2020

Completion Date

March 2020

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PROJECT OVERVIEW

The client is a new energy infrastructure and supply company with gas transmission, gathering and processing facilities across Western Canada. They requested support in assessing a potential acquisition opportunity comprised of wells and their associated infrastructure, that would ultimately deliver into one of its existing midstream assets. CWL Energy Management was engaged to perform a detailed evaluation of the properties available for purchase.

PROJECT GOALS

The client required a quick turnaround on an asset purchase opportunity. Bid deadline was pending, and a fulsome assessment on asset quality, valuation, risk and strategic fit was required in advance of an internal investment committee discussion.

SERVICES PROVIDED

  • Upstream Engineering and Asset Evaluation
    services
  • PDP and PPDP Reserve Assessment &
    Valuation
  • Break-Even and Pricing Sensitivities
  • Liability Estimate and Schedule of Costs
  • Well Insight, Concentration Risk and Lease
    Operating BI Analytics
  • High level Mineral Expiry Review
  • Asset Purchase Opinion

ROLES AND RESPONSIBILITIES

Following engagement, CWL Energy assessed reserves and evaluated economics for a client provided list of select assets, summarized their liability and provided an overview of well concentration risk, delivery optionality and operational considerations relevant to the acquisition. PDP and PPDP valuations, as well as break-even economics, were provided to the client for review. In addition, with the use of internally developed BI dashboards, lease opex information was analyzed to help identify outliers and potential opportunity. Various scenarios at different price decks were run, and sensitivities utilizing a revised well list were presented as alternative bid options to the client. In addition to the engineering analyses, a cursory review of land schedules was completed to identify, among other things, continuation and tenure risk.

PROJECT OUTCOMES

Our ability to take on a project with short notice, within a tight time frame, proved critical to the client. We were able to dedicate experienced personnel with extensive expertise in asset scrubs and valuation work, which allowed us to deliver this project on-time and on-budget. By approaching this mandate in a collaborative fashion, we were able to move efficiently through the various stages of this project. Leveraging BI analytics to quickly interrogate several data sets also proved to be effective and valuable to the project. This ensured our client was equipped with the necessary data and insight to support their recommendation, as they were armed with a comprehensive summary of the assets, their valuation, risk and strategic fit.

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