- Feb 7, 2017) - An impressive acquisition is underway at Calgary-based Tanager Energy (TAN: TSXV
) with the February 5th announcement of a Letter of Intent (LOI) for an agreement in principle to purchase a significant oil and gas property in central Alberta.
While details are being held until closing on February 28th 2014, this deal provides its first production to the aggressive western junior.
Tanager activities concentrate on the acquisition, development and production of petroleum and natural gas. Currently Tanager is focused on opportunities such as suspended wells, by-passed pay zones, enhanced oil recovery, with potential for further production with the appropriate technologies.
Tanager also announced an agreement in principle with a US institution to secure debt financing for the acquisition.
The acquisition adds to TAN's central Alberta property Leduc D-3 Oil Unit No. 1 acquired in 2013. The area is located in an oil reservoir already known for producing over 6 million barrels and 26 BCF from 7 wells.
Prior to this announced deal, Tanager projected it would deliver production of 2000 barrels per day by 2015. This acquisition markedly advances that timetable to reaching that target with 12-18 months. The new deal will immediately add 160 barrels of oil equivalent (90% oil) per day of production from 3 producing properties in an acreage package of over 2900 acres. Within these properties additional probable reserves are available for additional wells and production optimization to increase the daily production.
Tanager has evaluated the proved reserves in the four properties included in the purchase at approximately 11.6 Mbarrels.
Management continues to have discussions with other groups to add significant production and reserves.
Along with growing production in this new area, Tanager is in process of re-entering Leduc's four suspended and one suspended water injection well.
"This strategic acquisition-with more to come-solidly puts Tanager on investors' radar," states John Squarek, President and CEO of Tanager. "This high quality property comes with immediate production and exceptional potential for
growth. The deal falls directly within our mandate to acquire production of oil and gas to ensure we deliver consistent and significant value for our shareholders."
Tanager's Leduc property in Central Alberta, which it is 100 percent owner and operator, has total proven and probable reserves of 377 Mbarrels and 2153 MMCF.
The key to ongoing success in the Alberta oilpatch, whether raising money or acquiring properties is the quality and experience of management. The salad days of the virtually automatic ability to raise money enjoyed by juniors prior to 2008 ended with the economic meltdown. Allocation of funds and a substantial track record are critical to the ability to keep investment dollars coming in. Tanager checks both of those boxes.
Between seasoned veterans CEO John Squarek and VP Production Randall Marshall, there is almost a century of direct oil and gas experience. Mr. Squarek is past President and CEO of two listed companies, Bellevue Resources and First Star Energy.
Marshall has been a Sole Proprietor Professional Consulting Engineer providing services to numerous Public and Private Oil and Gas Exploration Companies as well as Senior Executive in the Upstream Sector of the Oil and Gas industry. His experience and strengths include economics, property evaluations, drilling, completions, work overs, facility design and construction, pipeline design and construction, production operations, project management, engineering and administration.
Both have held or currently hold senior positions in several established O&G trade and industry groups. Mr. Marshall also sits on several Boards of Directors.
Tanager also has a gold property in Northern Ontario, which was part of predecessor company MGold. The Burchell Lake Property is currently not a core focus and the Company is waiting for an assessment report to decide whether to sell it or develop the asset.
The Bottom Line
What is impressive about Tanager is the Company's ability to execute its acquisition strategy and bolt on production. Should it reach the stated production goal of 2000 barrels per day, it leaves the realm of a developmental company far behind and becomes a decent sized player with plenty of room for growth.
The depth of management is critical to Tanager's success. With the quality of experience of the Principals, not to mention an unrivalled network of contacts, it's much easier to progress. Particularly when you know or have worked with all the major players in a space.
A potential strategy here would be to buy some, put it away and as news comes out, maybe add to a position. Shares trade for around a dime. Seems a decent spec for those who like aggressive, early stage energy plays.
The Bottom Line Report
TANAGER ENERGY INC.
3058 - 409 Avenue South
Lethbridge, AB T1K 6Z9
403 388 0969
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