Razor Energy Corp. (ticker: RZE) will join a slate of 40 other oil and gas E&P, oilfield technology companies and industry leaders who are presenting at EnerCom’s Texas-based investment conference— EnerCom Dallas—on Mar. 1-2, 2017 at the Tower Club downtown Dallas.
Razor is a newly formed Calgary-based E&P that is the surviving entity following the recent combination of Vector Resources and Razor Energy.
Razor’s president and CEO is Doug Bailey is a founder of Canadian Phoenix, which sold to Renegade Petroleum, and Hyperion Exploration. Most recently, Bailey co-founded Striker Exploration Corp., which amalgamated with Gear Energy Ltd. in July 2016.
Razor Energy assets
Razor is developing recently acquired oil and gas interests in the Swan Hills area of Alberta. The assets consist of producing oil and gas assets and approximately 15,000 net acres of associated undeveloped land.
“We’re producing about 70% light oil from an asset that has been undercapitalized up until now,” Bailey told Oil & Gas 360. “We have already discovered years of new opportunities that stem from reactivating old wells in the play. There is about 2.2 billion barrels of oil in place.”
Ongoing development of the assets will be focused on increasing light oil production from the Beaverhill Lake formation. Reactivations and optimization of existing primary and secondary recovery schemes will be the emphasis of near term capital activity, Razor reported in a press release.
As a result of reactivating 17 gross (15.8 net) wells since the effective date of September 1, 2016, production from the assets was 3,034 BOEPD, based on sales levels in November, 2016. Management anticipates higher declines near-term from the reactivated wells due to flush production rates as compared to the base production declines. Razor will continue to focus on similar types of operations in the 2017 budget year, the company said.
“We will be taking a conservative approach in 2017. Because of the significant reactivation and redrilling opportunities in Swan Hills, we will stay focused on low capital intensity projects. We believe we will deliver a 20% or greater debt-adjusted per share growth rate,” said Bailey. “We’re very confident on a risk-adjusted basis that goal is achievable.
Moving forward, Razor will stay focused on assets similar to Swan Hills, Bailey said. “[Swan Hills] is the first of many deals. We have access to capital, and access to deal flow, and we’re looking for a lot of organic and inorganic growth,” explained Bailey, saying the company would likely continue to focus on undercapitalized, non-core assets from larger companies.
“We want to bring a more aggressive mindset to these assets.”
Summary of Swan Hills Acquisition
| Total purchase price(1) | $15.0 million | ||
| Production (November, 2016 sales) | 3,034 boe/d | ||
| Commodity mix | 90% oil and natural gas liquids | ||
| Forecasted annual decline rate on base production | 12 | % | |
| Net undeveloped land | 15,088 net acres | ||
| Reserves: | |||
| Proved developed producing (“PDP”) reserves(2) | 5.6 MMboe | ||
| Total Proved (“TP”) reserves(2) | 8.3 MMboe | ||
| Proved plus probable (“P+P”) reserves(2) | 10.6 MMboe | ||
| P+P RLI(3) | 9.6 years | ||
| Reserves Value Before Tax / After Tax(4) (PV10): | |||
| PDP reserve value(2) | $49.9 million / $38.6 million | ||
| Proved reserve value(2) | $73.6 million / $55.6 million | ||
| P+P reserve value(2) | $89.1 million / $67.0 million | ||
First Half 2017 Operational Outlook
Razor management intends to continue to reactivate certain shut-in light oil wells in the Swan Hills area, initially allocating approximately $2.5 million toward the proposed development.
EnerCom Dallas, which is patterned after EnerCom’s popular The Oil & Gas Conference® held each August in Denver, now has more than 500 preregistered buyside and financial community attendees.
EnerCom Dallas is being held at the Tower Club, downtown Dallas, on March 1-2, 2017. Registration details and meeting requests for Razor Energy may be found at the EnerCom Dallas conference website.
