Something massive is going on in the Alberta Montney.
First, there was the $3.325 billion transaction whereby Ovintiv will acquire the vast majority of Paramount’s Montney production in Alberta.
Then this week there was the $15 billion transaction between Whitecap and Veren.
On their own, these might be dismissed as one-off transactions, but beneath the surface something larger appears to be going on. The Alberta Montney is being consolidated, following in the path of the BC Montney. Recall that after the Tourmaline/Crew Energy transaction, we had written this article about how 78% of BC Montney production was now licensed to only 5 operators, and that there was not many options left for securing volumes in the area.
Fast forward to today, and the same thing appears to be happening with the Alberta Montney. After giving credit for the assumed volumes from these 2 large transactions (neither of these transactions have officially seen licences transferred yet so let’s call this an unofficial list), the Alberta Montney will have 66% of its production licensed to the top 5 operators.
Figure 1 – Alberta Montney Gross Licensed Production – December 2024 volumes** (tilt phone sideways to view on mobile)
| Company | Production (boe/d) | Oil (bbl/d) | Natural Gas (boe/d) | Condensate (bbl/d) | NGL (bbl/d) |
|---|---|---|---|---|---|
| ARC Resources Ltd. | 180,192 | 4,147 | 95,688 | 67,344 | 13,013 |
| Ovintiv Canada ULC (including estimated Paramount volumes)* | 138,622 | 761 | 84,878 | 44,105 | 8,878 |
| Proforma Whitecap Resources (including Veren)* | 129,088 | 39,507 | 64,346 | 16,832 | 8,403 |
| Canadian Natural Resources Limited | 78,025 | 9,593 | 47,733 | 11,889 | 8,810 |
| NuVista Energy Ltd.*** | 72,539 | 0 | 48,337 | 17,776 | 6,426 |
| Birchcliff Energy Ltd. | 71,043 | 1,894 | 59,087 | 3,404 | 6,658 |
| Advantage Energy Ltd. | 67,080 | 2,938 | 60,325 | 2,155 | 1,662 |
| Strathcona Resources Ltd. | 61,851 | 0 | 32,257 | 19,004 | 10,590 |
| Kelt Exploration Ltd. | 21,121 | 4,775 | 14,407 | 659 | 1,280 |
| Sinopec Canada Energy Ltd. | 12,974 | 486 | 9,330 | 2,652 | 506 |
*Well licences not yet transferred. These are best estimates only for illustrative purposes of what might be transferred assuming transactions close.
**Gross licensed volumes assume 100% working interest to all licensed production and do not reflect any working interest in wells licensed to another company.
***NuVista gross licensed volumes rebounded to ~84,000 BOE/d in January 2025.
What’s particularly notable is that there are only 10 companies on this list with production in the Alberta Montney greater than 10,000 BOE/d. In other words, there are only a few options left for producers looking to secure additional volumes in this prolific part of the Western Canadian Sedimentary Basin. Will this lead to further M&A in Alberta as large producers scramble to acquire additional volumes? Will we see more merger/combinations from producers looking to gain enough scale to remain relevant in the eyes of institutional investors while protecting their companies from the volatility often seen in oil and gas?
It feels inevitable at this point (recall the article about Kimmeridge eyeing more Canadian oil and gas activism). Which producers will be left with substantial volumes in the Alberta Montney when we look back at this list 5 years from now?