Paramount Resources hasn’t released a corporate presentation since November 2023, leaving some wondering what the latest changes at the company might be. We’ve already covered news of Paramount’s joint venture with Woodside Energy group at Liard, and much will be illuminated when the company announces its year-end 2023 financial and operating results, but for now we wanted to narrow in on some developments that the company touched on in a January 2024 press release. The company’s ~240,000 net acre Willesden Green Duvernay asset appears to be an emerging, increasingly important part of its portfolio. While tagged as being somewhere between an “Appraisal” and “Develop” stage play according to the company’s internal criteria, the successful (and early) commissioning of Paramount’s liquids handling expansion at the Leafland natural gas processing plant in December 2023 may suggest that the company’s pace could pick up sooner than previously indicated. The expansion means that the plant now has a raw handling capacity of 6,000 BBL/d of liquids and 22 MMcf/d of natural gas. With this in mind, we’ve prepared a review of Paramount’s recent activities at Willesden Green and suggested some things to watch out for in 2024.
Source: Paramount’s November 2023 Corporate Presentation
With respect to crown mineral right ownership in the area, Paramount is among the top players at Willesden Green. Tourmaline has the strongest presence in the area with 476 associated rights followed closely by TAQA (409 mineral rights), BTG Energy (394 rights) and Cenovus (391 rights). Paramount Resources itself is owner or part owner of 249 mineral rights in the area, with a sizeable rights position that is largely contiguous. Please note that the map below does not account for shared ownership of different geological formation rights at the same geographic point, and as such does not fully represent crown mineral right ownership at Willesden Green.
Willesden Green Area Crown Mineral Right Ownership (Paramount in Black, BTG in Light Green, CNRL in Grey, Canlin in White, Obsidian in Yellow, i3 in Dark Green, Cenovus in Brown, TAQA in Red, Tourmaline in Purple, Yangarra in Blue) NOTE: Ownership of mineral rights is often split between companies across different geologic formations at the same point on the map. As such, this map does not capture the comprehensive mineral rights ownership situation and is intended for illustrative purposes only.
Beyond the company’s infrastructure expansion success, Paramount’s January 2024 press release also announced the completion of 4 Duvernay wells at its 4-7N pad in early December, 2 of which have been flowing in-line for over 2 months now while the other 2 came on line more recently. Strong initial results seem to suggest significant potential for this asset, with the company suggesting in November 2023 that the Willesden Green asset may ultimately achieve a production plateau of ~50,000 BOE/d. It’s worth noting that, while the company’s own drilling at Willesden Green has been limited, there are quite a few legacy wells on its Willesden Green properties that have surely helped Paramount understand the asset’s potential value.
Paramount Wells Near Pad 4-7N (Recent Licences in Blue, All Other Paramount Wells in Red)
Taking a step back, we wanted to assess the company’s drilling activity for the past 5 years. Interestingly, the company’s activity since 2019 has been focused entirely on pad 4-7N. There is a single well drilled in 2019 at Township 040-03W5, but it appears that this well was acquired from Crescent Point in 2022. It appears as if Paramount has been treating its wells at 4-7N as something of a proof of concept, and the results have been positive. We only have one full month of production data that includes any of the company’s 2023 spuds, but the company’s December 2023 data suggests strong, liquids-weighted production. Of the roughly 3,187 BOE/d output by the 7 producing wells (4 of which were brought on production part way through the month), liquids accounted for 62.8% with pentane alone accounting for over 54.2%. For some additional context, Paramount’s 2 spuds from 2021 at 4-7N had gross initial 30-day production of 1,533 BOE/d per well. While full January 2024 NGL data is not yet available (but should be any day), we do have data on oil and “gas equivalent” production. To clarify, gas equivalent production is a figure that combines natural gas and NGL production into one output measure. Before Alberta NGL data became available, this was the only data that we used to have for liquids rich production, although in general it does a poor job of showing volumes for the liquids rich plays like the Montney and the Duvernay. With that said, it is useful for showing trends from month to month. Compared to December 2023, gas equivalent production increased by 20.4% in January.
Paramount Willesden Green Spuds Since 2019 (2019 in Purple (Drilled by Crescent Point and Acquired in 2022), 2021 in Green, 2023 in Black, 2024 in Blue)
As a last note, Paramount’s November 2023 presentation also remarks on the company’s plans to bring 4 wells at pad 4-7S onstream in the second half of this year along with 5 wells spud at pad 11-1S in late 2024. We haven’t seen any hint of activity at pad 11-1S yet, but the company has already spud 5 wells (seen in blue on the well map above) with an additional well licensed at 4-7S already in 2024. With this in mind, it will be worth tracking initial production outcomes from Paramount’s Willesden Green asset throughout 2024. Interested readers can track the ongoing development of production from the wells included in the chart above by revisiting this article as new data becomes available; the chart will update continuously. To get an even more comprehensive view of Paramount’s activities at Willesden Green, BOE Intel and Petro Ninja provide various tools to give you access to new oil patch information right as it becomes available.