This private company has tripled oil production over the last two years by producing wells from a formation that almost no one else is targeting – BOE Intel

As we were pouring over the public data from February, one company caught our eye. Islander Oil & Gas seems to have been having some success with a play that is off the radar for most. The company has been drilling predominantly Pekisko oil wells, and has been producing excellent results in the Seal field. The wells have been noteworthy because of the high oil rates, but also because we just don’t see too many Pekisko oil wells drilled these days.

In fact, there have only been 30 Pekisko wells spud in the last two years. 19 have been by Islander, and 7 by Pine Cliff Energy.

No surprise then that if we look at the top 10 Pekisko producing oil wells for February, it is dominated by Islander. The daily rates are impressive. 3 of its newer wells have calendar day production rates of 648 bbl/d of oil or higher.

Figure 1 – Top Pekisko oil wells – February 2024

While the peak rates for these wells are extremely impressive, the public data suggests that some of these wells have had significant declines over time (Figure 2). So the question becomes whether new production can replace the declines.

Figure 2 – Oil production rates (bbl/d) for Islander Pekisko wells brought on production in 2022 and 2023

**y-axis on the left should read: “Oil (bbl/d)”

So far, Islander seems to have been able grow volumes significantly despite these declines, with gross licensed oil volumes growing from 1,920 bbl/d in February 2022 to 5,813 bbl/d in February 2024* (Figure 3). All of the growth in that timeframe appears to be organic as we don’t see any well licence transfers in the company’s recent history.

Figure 3 – Islander Oil & Gas – Gross licensed production

*gross licensed production would assume 100% working interest for all wells licensed to a company

While the company has been exclusively drilling into the Pekisko formation up until 2024, that may be changing. The company’s two most recent spuds have been into the Falher, which would be a Clearwater analogue in the area. While these new wells look to have been placed on production in March, there are no production results yet for those two spuds in the public domain.

Time will tell if the Falher becomes a new area of focus for Islander. And what will happen to the Pekisko? How big can it get? Will others attempt to replicate these results nearby? Will the declines moderate or will the declines be too much to overcome? One thing is for sure, these results have got our attention.

Figure 4 – Islander spuds since start of 2022

Figure 5 – Crown mineral rights held by Islander (yellow) + Islander spuds since the start of 2022 (red)