Valhalla Field Roundup – BOE Intel

Positioned in one of the Alberta Montney’s premier producing regions, the Valhalla field is among the most dynamic in the Canadian oil patch. With exposure to both the Charlie Lake tight oil play and a gas-weighted zone of the Montney producing formation, Valhalla has been the site of regular and productive drilling by some of Canada’s blue chip producers. We believe that Valhalla will continue to occupy a central position in the industry for years to come. In order to give our readers a better understanding of this fascinating field, we’ve prepared another entry in our BOE Intel Field Roundup series. Keep reading for further details on Valhalla’s rights ownership situation, production, drilling activity and more.

Valhalla ownership overview

Situated north of Grande Prairie and west of Rycroft, Valhalla is among the most northern producing areas of the Alberta Montney play. Mineral rights ownership at Valhalla is complex, with multiple companies owning crown rights that overlap geographically with rights held by other producers. For example, in some spots we see that one producer will own rights to a specific producing formation while a different producer owns the rights to everything else. There are also multiple Land IDs associated with mineral rights that are wholly-owned by 3 different producers. In order to graphically represent this jigsaw puzzle, we’ve prepared a map of all active wells tagged to the Valhalla field. In examining the results, the overlapping positions held by producers are made abundantly clear. With respect to active wells held, Tourmaline is the clear frontrunner with 308 wells, followed by CNRL with 263 and Whitecap Resources with 145. This isn’t the end of the story, however, as 7 additional producers own the licences for more than 30 wells including Grizzly Resources, Surge Energy, Kelt Exploration and others.

Drilling activity

There has been significant drilling activity at Valhalla over the past 5 years. With an average of 42 spuds per year between 2019 and 2023, it’s clear that the field has broad appeal for producers. The most active year in terms of spuds was 2022, which saw producers drill 55 wells. Leading licensees over the period include Tourmaline (68 licences), Grizzly Resources (28 licences), Kelt Exploration (25 licences) and Whitecap Resources (24 licences).

With respect to producing formations, the Charlie Lake is the clear favourite among producers and accounts for over half of all drilling in the past 5 years. The Montney and the Doe Creek have seen similar activity levels, accounting for a combined total of 77 licences each, with the remaining 8 licences being split between the Doig, the Belloy and the Cadotte.

In examining a well map of spuds coloured by year over this period, we note that there are a number of licensing hot spots at Valhalla. The busiest areas are Township 078-08W6 and 078-07W6, which both saw high activity levels from Tourmaline, Grizzly Resources, and Kelt. Pad development at Valhalla appears to be incremental, with numerous well pads containing spuds that were drilled across multiple years.

Production

Much like its namesake was for the Vikings, Valhalla could be described as something of a paradise for Canadian producers. With February 2024 gross licensed production of just under 51,700 BOE/d, the field is quite the asset. In addition, production at Valhalla has a strong liquids component that accounted for around 49% of total production in February. As illustrated in the production chart below, both overall production and the producing well count have been fairly consistent over the past 5 years. Compared to nearby Alberta Montney fields, Valhalla is highly oil-weighted at 39.4% of total February production; Wembley, for example, had a 17.2% oil portion while Pouce Coupe South registered a 7.8% oil portion in the same month.

Who is responsible for production at Valhalla? We prepared a chart with the gross licensed production for the top 7 companies, which together comprise the majority of February 2024 Valhalla production. Please note that this chart allocates production to companies according to the current licensees of producing wells; as such, this chart does not reflect historical licence transfers. Unsurprisingly, Tourmaline and CNRL are at the top of the list. Tourmaline, a model of consistency, has largely held its average daily Valhalla production between 15,000 and 20,000 BOE/d. CNRL has steadily grown its share of Valhalla production, due in part to the company’s 8 highly productive spuds from 2021 to 2023 that generated an average IP90 of almost 1,500 BOE/d (access a Petro Ninja list of these wells here). Kelt, on the other hand, has increased its output at Valhalla significantly; the company (which considers these Valhalla wells to be part of its Progress and Spirit River assets) posted February 2024 production that was 66.4% greater than its January 2019 production.

Top Valhalla wells

In examining the top wells at Valhalla by February 2024 gross licensed production, we were impressed by the variety of producers that cracked the list. 5 different companies appear in the top 10, boasting a collection of wells that target a similarly broad variety of producing formations and production mixes; whether it’s the Montney or the Charlie Lake, impressive production can be generated at this field. Interestingly, all of the top wells were spud in 2023.

UWI	Licensee	Producing Formation	Spud Date	Recent Liquids (BBL/d)	Recent Gas (mcf/d)	Recent BOE (BOE/d)
100140607611W600	Canadian Natural Resources Limited	Montney	2023-06-10	252	9,387	1,817
100100607611W600	Canadian Natural Resources Limited	Montney	2023-06-25	289	8,468	1,700
100040807408W600	Tamarack Valley Energy Ltd.	Charlie Lake	2023-11-03	814	2,317	1,200
102050807408W600	Tamarack Valley Energy Ltd.	Charlie Lake	2023-11-23	780	2,313	1,165
100042007509W600	Whitecap Resources Inc.	Montney	2023-09-17	109*	5,894	1,092
100100707510W600	Advantage Energy Ltd.	Montney	2023-03-09	156	5,936	1,146
100140907608W600	Tourmaline Oil Corp.	Charlie Lake	2023-10-28	902	1,236	1,108
100070707510W600	Advantage Energy Ltd.	Montney	2023-02-26	219	5,403	1,120
100131507609W600	Whitecap Resources Inc.	Montney	2023-08-15	359*	3,546	950
100130907608W600	Tourmaline Oil Corp.	Charlie Lake	2023-10-29	718	770	846

* Whitecap’s top wells in this list have been given “Confidential” status. As such, we are only able to provide oil and aggregated gas production data. The liquids production entries for these wells in the table above only account for oil, with NGLs being reflected in the gas production column; as such, actual liquids production for these wells is almost certainly higher (and gas production correspondingly lower) than demonstrated above.

Looking ahead

We’ve examined producers’ corporate presentations and licensing data to develop an idea of what to expect at Valhalla through the rest of the year. Starting from the top, Tourmaline has obtained licenses that suggest the development of a 4-well pad at Township 079-08W6, a relatively undeveloped corner of the asset (see the company’s March 2024 corporate presentation for more details on the company’s operations in the area). Similarly, Whitecap has licensed 4 wells that appear to be the company’s first at Township 076-10W6. 2 of these licences have been spud, although neither have been brought on production. Whitecap specifically references targeting the Montney at Valhalla in its 2024 capital budget, although it is unclear what portion of its 36 gross West Division wells will be allocated to the field. Tamarack has obtained 2 licences that appear to be an expansion of an existing pad at Township 074-08W6, along with a well at Township 075-08W6 that came on production in March.

To keep track of the latest developments at Valhalla, check out BOE Intel.