2Q24 Canada E&P Recap

2Q24 Canadian E&P Recap

Key Takeaways Among the 20 E&Ps Profiled

• FY24 Canadian-based Capex (D&C and non-D&C) is estimated at ~$30.4B among the 20 E&Ps profiled

• 2H24 Capex for this year is estimated at ~$15.8B, with 63% weighted towards the four largest E&Ps in Canada (CNQ, CVE, SU, TOU)

• Forecasting 99 active rigs in 3Q24, and 93 rigs in 4Q24 equating to ~1,230 wells drilled and ~1,275 wells completed

Observations & Insights

1. Rig activity is trending higher. From the Baker Hughes rig count data, Canadian rig activity has steadily increased through August with weekly, national-level rig counts exceed the three-year peak by 16-18 rigs. Geographically, Central Saskatchewan is driving this August rig growth as rigs have been migrating from SW Saskatchewan to Central Saskatchewan. This geographic trend extends into Alberta as East Central Alberta and Central Alberta have also experienced a 3-year peak in rig activity through August.

2. Ongoing gas price erosion is equating to completion deferrals towards late 4Q24/early 2025. Since its YTD peak in January, AECO spot prices have been in a freefall, dropping below the $1.00/GJ threshold in June and continuing to decline to its current daily price below $0.50/GJ (link). AECO futures pricing suggests a seasonal improvement this Winter with a potential return above the $2.00/GJ threshold; as well, the CSV Albright 150mmcfpd Gas Plant is anticipated to be operational in 4Q24, however, the current upstream impact is leading towards gas-specific completion deferrals until late 4Q24/early 2025.

3. Infrastructure spend remains steady. While the focus of my research and analysis has weighed heavily on D&C activity, there are also the infrastructure projects that support the upstream activity. Based on the quarterly reporting and presentations, the following list outlines E&P-specific projects in the process of development, or upcoming. While Capex, start and completion dates are best estimates and subject to revisions, the approximate scheduling represents $2B+ in FY24 infrastructure-related spend, and $800MM+ in FY25 Capex.

Enjoy the analysis? Want tailored market intelligence to support your sales team?

With extensive expertise in North America’s oil and gas sector, I offer specialized consulting services that can significantly enhance your strategic planning as you approach your upcoming budget season. My modeling expertise, coupled with detailed, E&P and basin-specific operational forecasts offer a comprehensive outlook for FY25 and beyond. If you are in need of an experienced market intelligence analyst feel free to reach out to me via email at [email protected].

Companies Mentioned

• Tourmaline Oil Corp. (TOU)

• Canadian Natural Resources Limited (CNQ)

• Cenovus Energy Inc. (CVE)

• ARC Resources Ltd. (ARX)

• Baytex Energy Ltd. (BTE)

• Veren, Inc. (VRN)

• Peyto Exploration & Development Corp. (PEY)

• Tamarack Valley Energy Ltd. (TVE)

• Whitecap Resources (WCP)

• Paramount Resources Ltd. (POU)

• Birchcliff Energy Ltd. (BIR)

• Vermilion Energy Inc. (VET)

• NuVista Energy Ltd. (NVA)

• Suncor Energy Inc. (SU)

• MEG Energy Corp. (MEG)

• Imperial Oil Resources (IMO)

• Athabasca Oil Corporation (ATH)

• ConocoPhillips Canada Resources Corp. (COP)

• Ovintiv Canada Ulc (OVV)

• Murphy Oil Corp (MUR)

_{Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Patrick Enwright accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Patrick Enwright makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.}