Private Company Review – Aspenleaf Energy Ltd.

For the fourth entry in our Private Company Review series, we’re focusing on a producer that has frequently shown up in our Top Well lists (see articles from June 7, May 11 and April 5). Headquartered in Calgary, Aspenleaf Energy Ltd. is a liquids-heavy private producer that was founded in 2013. With three primary clusters of assets spread across Alberta, the company has grown steadily both organically and through acquisitions over the past decade. Aspenleaf has been doing things a little differently, particularly with respect to its Leduc assets, and we are excited to provide our readers with some additional context on the company’s operations.

A tale of 3(ish) positions

Aspenleaf’s assets can be broken roughly into three main sections, designated here by their primary fields: Beaverhill Lake at Swan Hills, Leduc-Woodbend, and Workman/Wabamun. The company’s Beaverhill Lake assets appear to have been held by Aspenleaf for the longest, and there has generally been less new activity in these fields compared to the other two sections. The Leduc-Woodbend assets were largely obtained as part of the company’s acquisition of NEP Canada Ulc in 2018, while many of the Workman/Wabamun assets were held by Huron Resources Corp. until the company was acquired by Aspenleaf in late 2020.

Starting with the company’s Beaverhill Lake assets near Swan Hills, we’ve observed what appears to be a continuous decline in licensing activity in this area over the past few years; the company has not licensed a single well there so far in 2023 and only licensed 2 wells in 2022. Check below for a full map of Aspenleaf’s Swan Hills licensing activity since 2018. Having said that, the company’s production from these assets has proven quite resilient. Apart from a sharp pandemic-related decline in early 2020 and a one-month drop in February 2023, the company’s Swan Hills area production has oscillated predictably between around 3,000 and 4,500 BBL/d of oil. While existing licensing/drilling trends suggest we shouldn’t expect production from these assets to increase substantially in the next few years, it is reasonable to expect that the region will continue to supplement volumes produced from the company’s other assets.

The company has devoted increased resources to its Wabamun/Workman position over the past few years. As illustrated in the table below, Aspenleaf’s recent licensing activity in this area has increased from a pandemic-era lull and there have been 23 licences since the start of 2022. This program appears to be bearing fruit, as production from these assets has increased notably. Total production has increased from 844 BOE/d in May 2021 to 4,862 BOE/d in May 2023, and this growth may continue as the company continues to license and drill in this region.

In our view, Aspenleaf’s most interesting activity is taking place in its Leduc assets. One of the oldest oilfields in North America, Leduc largely slipped off the radar until recently; producing formations in this area are generally quite shallow, and companies were unable to effectively exploit these reserves with traditional vertical wells. This is why the vast majority of the wells we observe in this area have been abandoned. The advent of horizontal drilling changed this, however, and Aspenleaf has been drilling some incredibly productive (and lengthy) horizontal Leduc-Woodbend wells. As seen in the map below, the company has been drilling wells in this area that sometimes exceed 14,000 feet laterally. In order to highlight Aspenleaf’s unique and dominant position, we’ve highlighted proximal wells owned by competing companies Hesc and Tenaz Energy (the only other companies that seem to be attempting to exploit this resource). 5 of the company’s top 10 wells in terms of recent production are located in the Leduc-Woodbend field. The company continues to license and drill new wells in this area, and it would not be surprising to see this continue in the coming years.

Lastly, the company owns 5 mineral rights in northeastern BC. While this does invite some speculation with respect to potential future activity in this region, the company does not have any active wells/licences in this area. In addition, its rights holding is sandwiched between some of the largest producers in the Canadian oil patch; CNRL, ARC Resources and ConocoPhillips have adjacent rights, and Kelt Exploration is not far off either. We thus view it as being unlikely that the company will pursue expanded activities in this region based off of currently available information.

Production Overview

Aspenleaf’s gross licensed production chart tells an interesting story (note that gross licensed production only includes output from wells licensed to the company, and thus differs from corporate production). While it would initially appear that the company’s production increased significantly in Q2 2022, this is actually the result of well licenses obtained in the NEP acquisition being transferred officially to Aspenleaf; in reality, the company was almost certainly producing from many of these wells for years prior to the well licence transfer processing. As such, the company’s production volumes were likely a lot more consistent than the chart below might lead observers to believe. The company’s production has hovered between around 18,000 and 24,000 BOE/d since early 2022. Check the table below for a list of the company’s top wells in terms of production in the last month.

Top 10 Wells

We wanted to conclude this private company review with a final comment on Aspenleaf. This company has grown significantly through private company acquisitions in the past five years, and this appears to mesh well with the management team’s base of expertise; CEO Bryan Gould completed over $25 billion in acquisitions through his career with Shell and Athabasca, while VP Corporate Development Robert Bowie has completed $17 billion in acquisitions. Past behaviour doesn’t perfectly predict future actions, but it is possible that the company might not be done making acquisitions just yet. With current data on asset, mineral right, and well licence transfers, BOE Intel is just the tool you need to stay abreast of any big future moves from Aspenleaf and every other company in the Canadian oil patch.