Canadian natural gas production surpassed 20 BCF/d in November, despite relentlessly low Canadian natural gas prices. Liquids-rich drilling and firm demand is providing operators confidence in capital programs, while the prospects of more LNG demand pull from the west coast continues to support consolidation. In an infrastructure constrained basin, scale increasingly determines access to takeaway capacity, LNG exposure, and balance sheet durability.
This trend has been on display for years. Consider the following articles that we have put out over the last 18 months highlighting the trend towards the desire for companies to get bigger in the Montney:
In that vein, and considering that the Montney is the dominant natural gas play in Canada, it should be no surprise to learn that 69% of natural gas production comes from only 9 operators. Below you can see the gross licensed production for these 9 operators, and how their volumes have trended over the last number of years. Keep in mind that these are gross volumes licensed to a company, so won’t include the impact of any joint ventures or production sharing agreements. Ovintiv will add ~365 mmcf/d of gross natural gas volumes once the public data catches up to the NuVista acquisition.
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