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3Q24 Canadian E&P Recap

Across the twenty E&Ps covered, production came in largely as expected with actual aggregated production totaling 5,768Mboepd, down -1% from my estimated 5,811Mboepd. Major variances occurred with ConocoPhillips (COP) overestimated by 53Mboepd (-29%), offset by Murphy Oil’s (MUR) NE BC production underestimated by 20Mboepd (+30%). For FY24, modeled production has remained largely unchanged following 1Q and 2Q updates. While M&A activity has occurred, notably the Chord Energy acquisition of Enerplus (February 2024) and the recent Paramount (POU) divestment/Ovintiv (OVV) acquisition of the Montney AB assets (link), acquisitions and divestments this year have largely been bolt-on transactions with minimal adjustment to full-year production. Looking ahead to 4Q24, aggregated production is expected to sequentially grow 4% to a little over 6Mboepd.

Capital spend totaled $7.15B for 3Q24 with ~53% of quarterly Capex spent by Canadian Natural Resources Limited (CNQ), Suncor Energy (SU) and Cenovus Energy (CVE). My aggregated Capex estimate for 3Q24 was +6% high at $7.57B, which can largely be attributed to a higher than expected inflation rate. In turn, each E&P has seen their annual inflation rate adjusted downwards.

For FY24, aggregated Capex is anticipated to reach ~$29.6B across the 20 Canadian-based E&Ps covered. Similar to production, modeled capital spend has remained largely consistent with the aggregated variance slightly increased by $166MM or 1% from my March 2024 forecast. Looking ahead to 4Q24, aggregated Capex is forecasted to sequentially increase 7% to $7.65B.

Canada & United States 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.}