Just last week, we pointed out that HWN Energy is set to acquire a number of assets from Bonavista Energy, pending approval from the AER. The company is at it again, as today we noticed that HWN has another acquisition pending AER approval. This time it is 642 wells, 145 facilities and 168 pipelines from Whitecap Resources. These assets appear to have been part of the larger Whitecap dispositions announced back in December.
Thanks to our AER transfer tool, we are able to map the affected locations on our Petro Ninja maps and take a look at what assets will be changing hands, assuming that it is approved.
The map below is the bigger picture. The yellow sections are the current mineral rights held by HWN. The pink sections are the affected locations from the pending AER transfer with Bonavista, while the blue sections are the affected locations for the pending AER transfer with Whitecap. There may also be additional land as part of the transfer that does not show up as an affected location with the AER. This certainly gives HWN Energy an impressive footprint in Alberta with lots of optionality. Recall that HWN is the company formerly known as Hawthorne Energy that acquired Tangle Creek back in July of 2021. The company is backed by Carnelian Energy Capital Management, a private equity firm out of Houston.
What does it mean for HWN?
While HWN Energy has largely targeted Dunvegan opportunities to date, HWN clearly looks to be a Cardium consolidator. The company is set to acquire Cardium assets at Pembina, at Lochend, and throughout Alberta.
Drilling down into some of the assets, we can learn a little more and try to figure out what else HWN might be up to. The map below shows that the Whitecap acreage ties in nicely with the Bonavista acreage down around Crossfield. There is definitely the known Cardium opportunity in the area, including at Lochend. We had also speculated last week that HWN might see some Viking opportunity in the area, based on 4 recent Viking licences that we could see.
As we zoom in and look northeast of Crossfield near Beiseker on the next map below, we see some intriguing Wabamun wells recently drilled by Aspenleaf. Those wells are coloured green. This well here has cumulatively produced 83mbbls of oil in 6 months. These wells are very promising, and Aspenleaf has been licencing more. There is lots of land associated with this HWN-Whitecap transfer surrounding these Wabamun wells.
What does it mean for Whitecap?
Whitecap is reducing its Cardium footprint, as its transition to a more high impact Montney and Duvernay company is becoming clearly evident. Up around Pembina, we can see all of the Whitecap licences over time in black on the map below, and most of those around the periphery of the Pembina field appear to be set to transfer over to HWN (the blue lands). These would have been non-core assets for Whitecap. The main Cardium unit, Unit 11, is not part of this transfer, as well as a couple other smaller units adjacent to unit 11.
It’s clearly part of the larger strategy for Whitecap that ties back in with the XTO acquisition last summer. The company acquired top tier Montney and Duvernay assets in that acquisition, and is reducing its reliance on a higher number of lower productivity wells. The Montney and Duvernay are clearly more capital intensive per well, but fewer wells and bigger productivities per well seems like a solid strategy for a company of Whitecap’s size.