E&P | Canada | FY24 Outlook

Key Takeaways:

• Halfway through 4Q23 earnings season, eight of twenty Canadian-based E&Ps covered have released their 4Q23 financial and operating results

• Among these twenty (20) Canadian-based E&Ps,

  • Aggregated FY24 Capex is estimated at ~$30B, representing +7% YoY growth from FY23 ($28.1B)

  • Aggregated FY24 production forecasted to average 6.0mmboepd, equating to +5% YoY growth from FY23 (5.8mmboepd)

Halfway through 4Q23 earnings season, I have updated eight (8) producers with their 4Q and year-end 2023 financial and operating results, while also confirming their FY24 guidance that has been released over the past three months. The producers include Murphy Oil (MUR), Imperial Oil (IMO), ConocoPhillips (COP), ARC Resources (ARX), Birchcliff (BIR), Cenovus (CVE), Suncor (SU), and Whitecap Resources (WCP). 

Halfway through 4Q23 earnings season, I have updated eight (8) producers with their 4Q and year-end 2023 financial and operating results, while also confirming their FY24 guidance that has been released over the past three months. The producers include Murphy Oil (MUR), Imperial Oil (IMO), ConocoPhillips (COP), ARC Resources (ARX), Birchcliff (BIR), Cenovus (CVE), Suncor (SU), and Whitecap Resources (WCP). 

Model adjustments include a material change to WCP’s capital spend plan as I was originally incorrect with the rig/frac crew counts against shorter well depths, which impacted the Capex per drilling foot assumption. I have reconciled the well/completion/well depth counts for FY22 and FY23 while also reconciling D&C Capex and non-D&C Capex. Additional amendments since my initial FY24 outlook include higher-than-forecasted 4Q23 production rates among the eight E&Ps, which in turn impacts the D&C cadence sequence for completed wells getting turned in line. As such, FY24 modeled production is aligned to each producer’s FY24 guidance parameters.

From a quarterly perspective, the adjustments illustrate a steady pace in production though recognize that oil sands-based turnaround activity in 2Q24 and 3Q24 will likely account for a steeper decline in production. For Capex, plummeting 2Q24 capital spend accounts for the seasonal break-up that occurs through late April/early May. 1Q24 Capex is forecasted to surpass the $8B threshold among the twenty (20) E&Ps before declining to ~$5B in 2Q24. FY24 capital spend is modestly weighted towards the second half of the year (52%) with oil sands/in situ spend forecasted to account for ~$5.8B in capital spend, representing 43% of modeled 2H24 Capex.

Overall, annual forecasted production and capex metrics among the 20 Canadian-based E&Ps (“Coverage Universe”) are as follows:

_{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.}