Calgary-based independents Tourmaline Oil Corp. and Topaz Energy Corp. each built stakes in the Montney Shale in separate transactions, with an eye on helping to boost liquefied natural gas (LNG) export supply.
The recent dealmaking generated C$659.5 million ($527.6 million) in northeastern British Columbia (BC) asset purchases by the two exploration and production companies.
Tourmaline’s deals are worth an estimated C$314.5 million ($251.6 million) for Montney output, drilling targets and product handling capacity. Included is a C$205 million ($164 million) resource rights purchase from Saguaro Resources Ltd.
Tourmaline, which boosted its natural gas production by 30% year/year in 1Q2021, said the transactions would lead to higher 2021 output. It is raising its average 2021 estimated production to 405,000-420,000 boe/d from a previous forecast of about 400,000 boe/d.
“As the key sub-basin for supplying Canadian LNG, the company expects the North Montney to be the primary growth driver in the entire Western Canadian Sedimentary Basin for the next decade,” Tourmaline management said.
Meanwhile, Topaz paid Tourmaline C$245 million ($196 million) for production royalty and infrastructure working interests in the Montney and other nearby properties.
Topaz pointed to support from the LNG Canada export terminal and its Coastal GasLink supply conduit now under construction, plus additional projects by Nova Gas Transmission Ltd. and Enbridge Inc.’s Westcoast pipeline network in BC.
“The northeast BC Montney is well known as the most prolific liquids-rich natural gas resource in western Canada due to its vast geographic coverage and significant reserve potential,” Topaz said. The firm’s management team said “the BC Montney is expected to provide the largest natural gas production growth” in the Western Canadian Sedimentary Basin over the next decade.
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