Fresh Tracks Therapeutics Inc V.BBI

TD

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Alberta Land Sale Results - November 20, 2019

Single Section at Pipestone/Wembley Headlines Small Sale

TD Investment Conclusion

Results from the November 20, 2019 Alberta Crown land sale were released yesterday (Link), with a total bonus of $1.6 million in successful bids across 36,912 acres. $0.4 million was paid for 3,796 acres in licenses and $1.2 million was paid for 33,117 acres in leases. Finally, we note that 4,428 acres received no acceptable bids.

Below are the key highlights from the land sale:

• The total proceeds of $1.56 million (average of $43/acre) were well below the

  2019 year-to-date average of $5.3 million.

• In our view, the most interesting results were near Pipestone/Wembley, where one section was acquired by Pipestone Energy Corp. for $0.5 million ($852/acre). The rights acquired were from surface to basement. This section fills-in a hole in its existing land position in the area (Exhibit 1). We believe that the Pipestone/Wembley area will be increasingly interesting over the next months as the Tidewater Midstream facility becomes fully operational and public production data becomes available for the months of October and November. As this data becomes available, we expect to see many impressive results from the key operators in the play. Along with its Q3 results, NuVista disclosed some IP rates from its Pipestone South pad, which showed gas rates above 10 mmcf/d and CGRs of +95 bbl/mmcf (see here). Pipestone Energy also released several solid CGR datapoints for its multi-well pads, which we have highlighted in the exhibit. The results show a significant increase in CGR from south to north, from 82 bbl/mmcf to over 200 bbl/mmcf. For a comprehensive review of the Pipestone/ Wembley area, see our analysis here.

• Another interesting result was near Trochu, where Chronos Resources (private) acquired 10 sections for $0.6 million (average of $93/acre). The land is immediately offsetting a well drilled by the company in August 2019 (Exhibit 2). Although no production information is available for the well, several sections to the south, Artis Exploration (private) has drilled several wells and licensed another three. The one well that does have production looks good, with an IP90 rate of 300 bbl/d.

  The next Alberta Crown land sale is scheduled for December 4, 2019, where 92,155 acres will be available for auction (2019 average posting: 102,279 acres).