February-March Licence Activity Review – Keeping an eye on the Clearwater. Plus, Baytex begins licensing on its new farm-in acreage?

In a slow start to 2024, Canadian licensing declined for the third consecutive month. Between February 13 and March 12, 363 licences were obtained. This represents a noteworthy 42.7% decline compared to the previous month, which saw companies obtain 633 new licences. This past month’s licences were spread across 68 unique licensees, representing an average of 9.3 licences per licensee. Overall, licensing activity for the month was dominated once again by producers operating in the Montney. The Clearwater is what really caught our eye, however, on account of a flurry of competing Clearwater licensing activity by the play’s major companies. The Clearwater is also in focus after a very large Alberta Crown land sale targeting the Clearwater north of Marten Hills. Using data from BOE Intel and Petro Ninja, we’ve identified a number of trends across the various producers and producing formations.

Licensees

• Tourmaline was the busiest licensee this month, obtaining 33 licences across its various asset groups. 20 of these licences targeted the BC Montney at various fields including Sunrise, Groundbirch and Flatrock. The company also obtained 2 licences at Mirage in its Peace River High Complex Triassic Oil development, with the remainder of this month’s licences found in the SE corner of the company’s Deep Basin asset. We’re interested by these Deep Basin licences in particular, as they appear to be close to assets the company brought on board through its acquisition of Bonavista last year. The licences are in close proximity to mineral rights obtained from Bonavista, suggesting the company is in the process of building upon its acquired positions in the Deep Basin. Even more intriguing: two of the wells target the Duvernay, an exceedingly rare move for Tourmaline. Note that back on January 15, 2024, Tourmaline press released that it would “commence a process to sell the Duvernay assets which were acquired pursuant to the acquisition of Bonavista Energy Corporation.”
• CNRL obtained 25 licences last month. We were most interested in the company’s licences at the intersection point between its Montney and Deep Basin assets. If you’re confused what we mean by “intersection point”, check out CNRL’s latest corporate presentation here (p.54). The licences in this area target the Dunvegan, the Falher and the Montney producing formations. The licences all appear to be extensions of CNRL’s many existing developments in this region.
• Baytex Energy engaged in noteworthy activity at Cold Lake. The company refers to this asset as its “Lloydminster (Mannville)” play, and we believe that some of the company’s licences in this area are associated with rights that are covered by a farm-in agreement on 17.75 sections of land announced in its March 2024 Corporate Presentation. This is a new and developing initiative from Baytex that isn’t visible in public mineral right data, so we have provided a side-by-side comparison with the company’s corporate presentation for additional context. BOE Intel users can use our licensee mismatch tool to easily flag who owns mineral rights in cases when they are not owned by the well’s licensee. In this case, it looks like Baytex’s farm-in agreement was made with a rather large E&P. We’ll leave it to our subscribers to visit BOE Intel to figure out what company it is…

Producing Formations

• In a turn of events that will not surprise regular readers of our licence activity reviews, the Montney was the most targeted producing formation last month. Ovintiv led all producers with 26 Montney licences while Tourmaline obtained 20. In an intriguing development, Shell was among the top Montney licensees for the first time in months. All of Shell’s new licences were at Groundbirch and Sunrise.
• The Clearwater was active as usual this month, with two producers obtaining double-digit Clearwater licence counts this month. Among the top licensees were the usual suspects: Spur Petroleum topped the list with 15 Clearwater licences, followed by Headwater Exploration (14 licences) and Tamarack Valley (9 licences). Woodcote Oil & Gas had 7 Clearwater licences; all at Nipisi, which represented a sizeable component of the 19 total licences obtained at the field last month.
• Regular Licence Activity Review readers might be surprised to see the Falher crack the top 10 producing formations list. Tucked in between the Notikewin and the Wilrich, the Falher formation was targeted by 4 different producers last month: Obsidian (5 licences),  Headwater Exploration (4 licences), CNRL (3 licences) and Islander Oil & Gas (1 licence). These licences are targeting two different plays; CNRL appears to be targeting liquids rich gas at Wapiti, while the other 12 wells are likely targeting Falher oil as a Clearwater comparable West of Utikuma Lake. CNRL has made our TOP WELL REPORTS a number of times with its Falher drilling program at Wapiti, including two big wells in this month’s report.

To keep track of the latest licensing activity in the Canadian oil patch for yourself, check out BOE Intel.