Top Canadian Operators Announce Merger
Last week Whitecap Resources and Veren announced that they were combining to create a nation-leading light oil and condensate producer. Whitecap Resources and Veren are both independently in the top 10 producers in Canada, and combined would become the 4th largest oil producer in the country. In this week’s spotlight we’ll break down the merger and analyze the two entities’ assets using Well Data Analytics.
The Whitecap Resources news release highlights the strategic rationale of the $15 billion all share transaction, including Capital, Operating, Corporate, and Infrastructure synergies. The associated Whitecap corporate presentation breaks down the combined assets into two major categories: Conventional High Netback Low Decline assets, and Unconventional Montney/Duvernay assets (Figure 1). Whitecap assesses the conventional assets at 150 MBOE/D with approximately 80% liquids and under 20% decline rate, and the unconventional assets at 220 MBOE/D with approximately 50% liquids.
Following the breakdown of assets used in the Whitecap presentation, we’ve split the analysis in Well Data Analytics between Conventional (Figure 2) and Unconventional (Figure 3) assets. All figures below are current through December 2024, and remaining PDP reserves estimates are based on TGS forecasting of all active producing wells.
Comparing type curves between the two entities we see a similar trend in both conventional and unconventional assets, with similar oil production profiles per well and Whitecap gas profiles per well exceeding Veren by approximately 300% in both conventional and unconventional assets.
The combined view of Whitecap Resources and Veren assets across the country (Figure 4) gives a good indication of how a combined entity could realize many of the synergies listed in the news release, as many of the key areas of focus are co-located together. The combined post-merger PDP output of nearly 350 MBOE/D firmly entrenches this new entity in the top 5 producers in the country, likely with significant economies of scale to bring down capital and operation costs, and therefore break-even prices, for future development.
With TGS Well Data Analytics, this type of comparative analysis can be completed in minutes. For more information on Well Data Analytics or to schedule a demo, contact us at WDPSales@tgs.com.
Figure 1. Whitecap Breakdown of combined assets.
Figure 2. Conventional Asset Analysis
Figure 3. Unconventional Asset Analysis
Figure 4. Total Asset Analysis
