While flagship plays like the Montney, Duvernay and the Clearwater tend to garner most of the attention in the Canadian oil and gas industry, we’ve recently tracked some significant investments in a different section of the oil patch. The Lloydminster area has seen noteworthy activity from top producers both large and small; Lloydminster area thermal and heavy oil projects are key operational focuses for public companies from Cenovus and Strathcona to Lycos Energy, along with a healthy pool of private companies. Strathcona, as an example, has allocated $450 million (34.6% of its total spending) of its 2024 budget to the Lloydminster area and highlights it as a significant component of its long-term growth plan. It should be noted that Strathcona has a wider definition of its Lloydminster assets and encompasses a wider area than the more localized field that we reference in the rest of this article.
With this in mind, we wanted to put together a Field Review covering the Saskatchewan Lloydminster and the surrounding area. For the purposes of this assessment, we are focusing on the Saskatchewan portion of the Lloydminster heavy oil play as the majority of the positions held by major producers are found on this side of the border.
Current Company Positions
With respect to current mineral rights ownership in the region, the situation is best described as an evolving patchwork of small and large producers. As a relatively mature field in the Canadian oil patch, ownership of crown mineral rights has developed organically over time. Unlike other more costly plays in Canada, Lloydminster “per well” costs are not prohibitive for many small producers. This has resulted in varied ownership of crown mineral rights; in the area we identified to create our mineral rights map, there were 106 unique rights holders. In examining the map below, it’s important to point out that this area includes many freehold mineral rights for which public ownership data is not available. Among the top rights holders, CNRL, Cenovus and Baytex stand out as the major rights holders.
Saskatchewan Lloydminster Crown Mineral Rights (Cenovus in Brown, CNRL in Purple, Baytex in Green, Strathcona in Red, West Lake in Black, Lycos in Orange, Intrepid in Yellow, Gear in White, All Others in Blue) NOTE: This map is purely for illustrative purposes and may not accurately reflect precise mineral right ownership.
Approximating the area’s commodity makeup by examining recent production for wells officially tagged to the Lloydminster field, the region is heavily-weighted towards oil. Of the over 120,000 BOE/d generated by 816 producing wells at Lloydminster in December 2023, approximately 97% of total production was oil. We also noticed that the wells at Lloydminster are generally shallow, with an average true vertical depth (TVD) of just under 1,830 feet that is in line with what we’d expect from a field with characteristics of this nature. As a reference point, active/location wells at Lindbergh and Leduc have an average TVD of 1,595 and 4,445 feet respectively.
Drilling Update
With an average of 313 licences spud per year between 2019 and 2024, the field is a highly active drilling target among producers. The 5 most active Saskatchewan licensees at Lloydminster are Cenovus, Strathcona, Baytex, Longshore and CNRL. Cenvous, due in large part to it’s dominant and concentrated land position at Lloydminster, has led the way each year. Interestingly, Strathcona is consistently 2nd in drilling despite having a smaller land position than many companies in the field. This is likely due to the company’s large developments at Edam and Meota. Longshore has devoted increased resources to the area over time, leapfrogging from 5th in spuds in 2019 to 3rd in 2022 and 2023.
| Year | Spud Count Across Producers |
| 2019 | 338 |
| 2020 | 255 |
| 2021 | 344 |
| 2022 | 335 |
| 2023 | 294 |
| 2024 | 9 |
Production Update
Both total production and the number of producing wells at Saskatchewan Lloydminster have trended upward through the past 5 years. Apart from a notable drop in COVID-impacted 2020, oil production has steadily increased year-over-year with gas exhibiting a similar pattern. Comparing December 2023 production to December 2019 production, producers in 2023 generated an additional 31,100 BOE/d while “adding” only 72 additional producing wells. This represents an average of just over 430 BOE/d per additional well, a noteworthy production increase. While traditional heavy oil wells in the area would have much smaller production rates, this per-well increase would likely be directly attributable to increased thermal (SAGD) activity in the area.
*Note: For mobile readers, the red line in the chart above corresponds to natural gas production and the green line corresponds to oil production
We also wanted to specifically highlight the top performing wells at Saskatchewan Lloydminster with respect to recent production (accessible in a Petro Ninja list here). In an impressive display of productivity, Cenovus is the licensee for 9 of the top 10 Saskatchewan Lloydminster wells with Strathcona claiming well #3. Similarly, 7 of the 10 wells produce from the Waseca, with 2 Lloydminster wells and 1 General Petroleum Group well to round out the collection. Interestingly, all of the top wells were spud during or before 2021, and all are thermal oil wells (SAGD). This might suggest a gradual ramp-up in productivity for wells in this play, an important well economics consideration.
| UWI | Licensee | Producing Formation | Spud Date | True Vertical Depth (ft) | Oil (BBL/d) | Gas (mcf/d) | Recent Total (BOE/d) |
| 116012805321W300 | Cenovus Energy Inc. | Waseca | 2020-02-29 | 1617 | 2205 | 91 | 2220 |
| 107042705321W300 | Cenovus Energy Inc. | Waseca | 2020-03-05 | 1618 | 1618 | 66 | 1629 |
| 103071304618W300 | Strathcona Resources Ltd. | Lloydminster | 2021-11-27 | 1700 | 1592 | 42 | 1599 |
| 102133104823W300 | Cenovus Energy Inc. | Waseca | 2021-11-19 | 1743 | 1485 | 620 | 1589 |
| 102042705321W300 | Cenovus Energy Inc. | Waseca | 2020-03-08 | 1617 | 1564 | 64 | 1575 |
| 103073604719W300 | Cenovus Energy Inc. | Lloydminster | 2020-11-02 | 1618 | 1527 | 161 | 1554 |
| 108010104924W300 | Cenovus Energy Inc. | Waseca | 2021-11-23 | 1740 | 1421 | 593 | 1520 |
| 112111204820W300 | Cenovus Energy Inc. | General Petroleum Group | 2019-03-08 | 1529 | 1484 | 180 | 1514 |
| 110042705321W300 | Cenovus Energy Inc. | Waseca | 2020-03-10 | 1617 | 1449 | 59 | 1459 |
| 104101605321W300 | Cenovus Energy Inc. | Waseca | 2021-03-17 | 1613 | 1356 | 437 | 1429 |
Noteworthy Transfer Activity
Like many plays across the WCSB, companies operating in the Lloydminster Heavy Oil play have been involved in considerable M&A and A&D over the past few years. In general, the big movements in this mature oil producing region have been among smaller players; larger E&Ps operating at Saskatchewan Lloydminster usually have an established position and trade bite-size pieces back and forth at the edges of their land holdings. The most substantial transfer in terms of overall land changing hands was related to the formation of Lycos Energy through the merging of Chronos Resources and Samoth Oilfield. The merger saw 43 net sections shift from Chronos Resources to the post-merger combined entity. The transfer involved the acquisition of 579 total licences (including active and inactive UWIs) that accounted for 1,483 BOE/d of total production in the month the transaction closed (December 2022).
Another noteworthy transfer was 13 net sections that changed hands from West Lake to Marlboro Energy. The transfer involved 270 licences (including active and inactive UWIs) that accounted for total production of 496 BOE/d in the month the transfers closed (June 2023).
We also wanted to highlight a small private producer that appears to have consolidated a number of land positions held by brokers in June and July 2023. Intrepid Petroleum Ltd. obtained a combined 27 net sections of land from numerous brokers, and it appears to be a significant extension beyond the company’s existing position. It’s unclear the extent to which they will develop these consolidated mineral rights, but noteworthy nonetheless.
Overall, the Saskatchewan Lloydminster area boasts productive assets that have clearly caught the eye of a variety of Canadian producers. To keep track of the latest developments in the region, check out BOE Intel.