On August 12, Tourmaline Oil Corp., Canada’s largest natural gas producer, entered an agreement to acquire Crew Energy Inc., a smaller natural gas producer with operations primarily focused in British Columbia (BC)’s unconventional Montney gas play for a total consideration of C$1.3 billion. This acquisition is the latest in a consolidation trend that has been underway for several years in the BC Montney as larger producers lock up reserves and production from smaller players and attempt to further lower costs ahead of what will be a fundamental shift in the Canadian natural gas market with the start up of several LNG export projects on the BC coastline by late 2027. This includes the first two trains of LNG Canada in Kitimat (intake capacity 2.1 Bcf/d) which are on the cusp of testing on site equipment and are expected to see first LNG exports before the end of this year.
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Shop ’Till You Drop - Is the Consolidation Trend Ending in British Columbia’s Montney Gas Formation?
British Columbia’s portion of the immense unconventional Montney formation has been the epicenter of Western Canada’s rapidly rising natural gas production in recent years. It should come as no surprise then that it has also become fertile ground for numerous acquisitions of companies — or some portion of their assets — by more nimble and financially stronger gas producers. However, as we discuss in today’s RBN blog, the most recent acquisition by Canada’s largest natural gas producer, Tourmaline Oil Corp., leaves the list of potential targets shockingly short.
Wouldn't It Be Nice - British Columbia's Montney Gas Play Revived with New First Nations Agreement
Natural gas production in Western Canada has been enjoying a steady revival in recent years, heavily assisted by enormous growth in the unconventional Montney gas formation. A sizable portion of this formation lies in the westernmost province of British Columbia, but also underlies a large contiguous land area in that province which has been the subject of land access and development issues with the province’s First Nations residents. As a result of a legal decision made in June 2021, future natural gas production growth was thrown into question as new well licenses, crucial for future gas well development, were placed on hold until a new agreement could be reached. In the nick of time, a new agreement was announced last month. In today’s RBN blog, we discuss the implications on future natural gas drilling and production.
It's Not Over - More M&A, Divestitures and Swaps as E&Ps and Midstreamers Fine-Tune Portfolios
Even with all the headline-making deals we’ve seen in the North American oil and gas industry over the past two or three years, producers and midstream companies are still at it. And the M&A, the post-acquisition divestitures and the acreage swaps aren’t confined to the Permian, which has seen more than its share of big-dollar transactions lately. In fact, as we discuss in today’s RBN blog, some of the biggest deals the past few months have involved production assets in the booming Montney in Western Canada, the generally sleepy Piceance in western Colorado, the quirky-as-heck Uinta in Utah, and — on the midstream side of things — a trio of natural gas pipelines in the Midwest.
