Gold Creek Montney
Chinook
June 3, 2015 |
Bigstone Montney
Delphi Energy
June 10, 2015 |
Dawson Montney
Arc Resources
July 6, 2015 |
Optimum Montney
Painted Pony
July 6, 2015 |
Chinook Energy is a Montney-focused growth company with nearly $50 million cash on hand plus an undrawn credit facility and poised to strike on the buyside. The company has two Montney focus areas – the Birley/Umbach in northeast BC and Gold Creek in the Grande Prairie area of Alberta. The slide above shows Chinook’s lands in the Gold Creek area and offsetting acreage and wells that includes operators Shell, CNRL and CIOC (a Riverstone PE-backed private company led by Scott Scobie). CKE’s two Gold Creek 2014 mid-Montney wells tested 1,500 boepd (33% oil) and 900 boepd (38% oil), respectively. The two wells resulted in net booked reserves of 380 Mboe of 1P and 593 Mboe of 2P. CKE’s WI was 37.5% and 75%, respectively. |
Delphi Energy touts healthy current cash generation with its Bigstone Montney top growth asset. Wells pay out in 1.3 years with $2.00/boe free cash flow. The slide above shows a dominant land position with 117 net sections in this liquids-rich area surrounded by Exxon, Chevron, Conoco and Encana. From this core asset, Delphi has built 8,000 boepd on net capital of $80 million. In 2014, 2P reserves increased 21% to 74.4 MMboe. Based on GLJ’s 2015 price deck, the current type curve yields IRRs of 85% and well NPV’s of $13.9 million. Individual well data indicates that new wells are 3X better using slickwater hybrid fracs. The latest wells use 30-40 fracs and show IP90 rates of over 1,200 boepd. |
Arc Resources has a clear line of sight to value creation underpinned by a fundamental strive toward low-cost production. The Montney comprises 70% and 77% of ARX’s production and 2P reserves, respectively. The company is the 3rd-largest landholder, behind Petronas and CNRL. As the slide above shows, the Dawson area leads the way for Montney performance and is a cash flow machine. At $3 gas, ARX has lowered DCET costs to $4.4 million and touts a remarkable 95% IRR. On a comparative play basis Dawson ranks number one. ARX is producing 168 MMcfpd of Dawson gas and has 2P reserves of 963 Bcf and 4.8 MMbbls of liquids. The company has planned nine wells this year. |
Painted Pony Petroleum is “driving forward” in the Optimum area in northeast BC. The slide above shows that PPY holds 217 net sections surrounded by Shell and Petronas. PPY has the top wells among all Montney operators with an average peak month rate of 6.2 MMcfpd – twice the industry average. Key Montney attributes in PPY’s area include thickness (4X greater than Marcellus), sweet gas, reservoir (dolomitic siltstone) and multiple zones. In the Blair-Daiber area, technological advances have driven a step-change in type curves – the latest being drilling parallel-pairs. As PPY drives toward development and infrastructure buildout, the company projects a 73% production growth rate from 2015-2017 and will be positioned to benefit from West Coast LNG proposed projects. |
