Private Company Review – Westbrick Energy Ltd.

Incorporated in 2011, Westbrick Energy is a longstanding private producer focused within the Greater Pembina region of the Deep Basin. With over 1,800 net locations of mapped drilling inventory and mineral rights that extend from the Belly River through to the Duvernay, Westbrick has steadily grown since receiving a $250 million investment from private equity firm KKR & Co. in 2012. According to Petro Ninja production data, Westbrick’s average daily natural gas production over the past 6 months ranks 23rd out of all producers in Canada.

Using Petro Ninja data on gross licensed production (which differs from corporate production in that it only accounts for wells licensed to the company and assumes 100% working interest), we can develop an understanding of how Westbrick’s production volumes have developed over time. Since growing steadily between 2020 and around April 2022, Westbrick’s average daily production has oscillated between around 45,000 and 50,00 BOE/d. On account of limitations for NGL and condensate reporting in Alberta, we are unable to precisely determine the company’s production share of these commodities. According to the company’s July 2021 corporate presentation, Westbrick’s Q1 2021 production mix was approximately 78% natural gas, 19% NGLs and 3% oil.

In the past 6 months, Westbrick’s most prolific wells targeted the Rock Creek formation. The company operates 5 wells that produce more than 1,000 mcf/d, 2 of which produce more than 2,300 mcf/d. With respect to oil production, 5 wells produce more than 100 bbl/d. 3 wells appear on each of these lists, highlighting the high quality of Westbrick’s Brazeau and Columbia assets. These wells are also quite new, with spud dates ranging between December 2020 and October 2022.

Transfers (Asset and Mineral Rights)

Westbrick has not been particularly active with respect to asset transfers in the past 12 months; their most recent major asset acquisition (a ~7,000 BOE/d purchase of Edson assets from Velvet Energy) took place in August 2021. Apart from a single well that was obtained from Knowledge Energy Inc. in October 2022, the other transferred assets were either facilities or pipelines. In total, 3 facilities and 5 pipeline assets were transferred with an additional facility transfer listed as “pending” as of May 23. Westbrick has obtained multiple assets from Tidewater in 2023, all of which appear to be located within the company’s Badger area and may have been acquired to better service a number of wells spud in that area.

With respect to mineral rights transfers, Westbrick has been highly active. While mineral right transfers were recorded across the Greater Pembina region, there has been particularly significant activity from Columbia southwards. With that said, over 70% of these transfers were from land brokers and thus may have been possessed de facto by the company for some time. Many of the rights transferred to Westbrick from other producers or midstream companies have not been targeted with drilling or licensing activity in the past 12 months, however, and are thus worth keeping an eye on in the coming months.

Turning to organic growth, Westbrick has been active with respect to both licensing and drilling in the past year. Since June 9, 2022, the company has spud 50 wells and licensed 51. Of the wells drilled, 34 were targeting either the Upper or Lower Mannville formations. Other formations targeted more than once include the Rock Creek and the Cardium. The company appears to largely have remained within close proximity of its existing wells, which likely enables the efficient use of existing infrastructure. We do find it interesting that Westbrick conducted over 10% of its drilling activity in its Badger assets, however, which is an area that has generally seen a bit less activity from them in the past. Given the company’s acquisition of Tidewater pipeline and facility assets in this same area, there could be even more activity to come.

A Reuters report published in November 2022 suggested that KKR & Co. was looking for a buyer for Westbrick in a deal with the potential to net $1.5 to $2.0 billion dollars. This may help explain the high volume of mineral rights transferred to the company from land brokers in the past 12 months, as companies sometimes consolidate their land positions in advance of significant transactions. To date this sale has not taken place, although the company’s continued strong organic growth and production are sure to keep Westbrick on the radar of potential buyers.

If you’re looking for more information on private (or public) E&P companies in Canada, visit BOE Intel and Petro Ninja. We have a diverse set of data and analytics tools that can help make sense of the latest developments in the Canadian oil and gas industry, and we’re adding new functionality all the time.