Canadian Natural Resources — Canada’s second-largest independent natural gas producer and its largest producer of heavy oils — is considering the sale of about 250,000 net acres of its Montney land base, about one-quarter of its total Montney acreage, President Steve Laut said Thursday during an earnings conference call.

The acreage is in the liquids-rich fairway in the Graham Kobes area of Northeast British Columbia (BC).

“Canadian Natural has a dominant Montney land position with over 1 million high-quality net acres, the largest in the industry,” Laut said. “…Canadian Natural will consider either an outright sale of the lands or a joint venture [JV] partner with LNG [liquefied natural gas] expertise to jointly develop the lands.

“If this process meets our internal targets and a transaction is completed, Canadian Natural will continue to have one of the largest undeveloped Montney land bases in Canada, with lands contained in two major areas, Septimus in BC and Northwest Alberta.”

Presumably, a partner with LNG experience could offer the opportunity to link the Montney production with Asian markets via LNG export.

During the conference call, Laut expressed a distaste for JVs “as we believe having a high degree of control of our capital allocation allows us to maximize value. We also believe the efforts of our strong team should be directed to creating value for our shareholders, not working interest partners. That is still the case.”

However, he said, in the case of the Montney acreage, the size of the asset and the company’s need to balance its capital allocation are factors to consider. Also, there is “strong demand” for such acreage in the Montney, Laut said, and Graham Kobes is “somewhat removed” from Canadian Natural’s Montney core.

According to the Alberta Energy Resources Conservation Board, the medium estimate of the overall Montney resource base is 2,133 Tcf of natural gas, 28.9 billion bbl of natural gas liquids and 136.3 billion bbl of oil. The reserves are made more valuable by their nearness to Alberta’s oilsands patch, where gas is burned to heat and release the bitumen and natural gas condensates are used as a diluent to move product through pipe.

“…[B]ecause of our very large Montney land base, we see a unique opportunity to maximize value today and take a different approach from what we have done in the past while still ensuring we have a strong land base, which we can create significant long-term value for shareholders as we go forward.”

Laut said last year Canadian Natural “made very good progress” on transitioning to a longer-life, low-decline asset base. “We continued to balance development of our large resource base by focusing on high return assets and our ability to deliver timely results,” he said.