BOE Report readers with a keen eye on our AER Licence Transfers page will note on November 2nd that Cenovus filed an application with the AER to transfer 99 wells over to Spur Petroleum. These are predominantly vertical stratigraphic wells with little to no current production, with the intention here that Spur Petroleum is acquiring the mineral rights in the affected sections. We have gone ahead and mapped the affected locations on Petro Ninja to get a sense of where these lands are in relation to Spur’s current acreage (purple), but it should be noted that this is the minimum land that is being acquired by Spur. It is likely that some other Cenovus land without any older vertical wells on them are part of the deal as well.
For example, if you zoom in on the affected locations (map below), and filter for Cenovus mineral rights, you can see Cenovus has more mineral rights that would likely be part of the deal. The yellow sections are the ones listed on the AER transfer, and the green sections are also owned by Cenovus, so one might assume that they would be included as well, in addition to other Clearwater lands not shown here.
Recall that Cenovus initially began selling down its Clearwater assets to Headwater Exploration back on November 9, 2020. At the time, Headwater acquired a 100% working interest in ~2,800 b/d of oil production and ~270 net sections of Clearwater rights. Cenovus received $35 MM in cash, 50 MM shares of Headwater and 15 MM warrants for Headwater exercisable at $2/share. After Headwater shares more than tripled in the short time after the acquisition, Cenovus sold its 50 MM common shares of Headwater at $4.55 in a bought deal on September 27, 2021.
Spur remains one of the dominant land holders in the Clearwater play and has been one of the most active operators as well. This has been one of the most popular plays in Western Canada over the last several years, with producers citing some of the strongest per well economics in the basin. M&A in the area continues to be strong as well, with Tamarack Valley recently acquiring Delta Stream to become a dominant player in the area, while Canadian Natural Resources, Baytex Energy and Headwater Exploration have been quite active Clearwater producers as well.