June 29th, 2010 
Category: 
The last post explained briefly what the Cardium oil formation was all about. Today we will cover the Cardium producers and land owners who are operating in this patch along with a view on mergers and acquisitions.
The companies operating in the Cardium trend have been there for years. After all, this area has been producing oil and gas since 1953. With the technological breakthrough of horizontal drilling and multi-stage fracturing unlocking deep light oil reserves (8.5 billion barrels untouched by vertical drilling), companies who wished to expand their presence in that area had not much of a choice but to take the acquisitions way since very little Cardium land remains in Crown hands.
In the last few months at least 4 companies were bought out by rivals:
- Nexstar Energy was acquired by Result Energy in December 2009.
- Berens Energy was acquired by PetroBakken in February 2010.
- Result Energy was acquired by PetroBakken in January 2010.
- West Energy was acquired by Daylight Energy Trust on March 2010.
Mergers and Acquisitions have played a major role in increasing valuations per acre of land and per flowing barrel of oil. This should not be surprising as companies scramble to secure land in this area. There is intensive development on this play; hundreds of horizontal wells have been licensed for drilling in 2010. I expect further mergers and acquisitions along the way as juniors get taken out by bigger rivals.
The following list of companies with prospective Cardium oil land is provided by BeatingTheIndex.com with no guarantee as to the accuracy of the data (updated June 1, 2011):
| Company Name | Trading Symbol | Cardium Land |
| PenWest Petroleum | TSE:PWT | 880 net sections |
| Bonavista Energy | TSE:BNP | 300 net sections |
| Peyto E&D | TSE:PEY | 288 net sections |
| PetroBakken | TSE:PBN | 240 net sections |
| NuVista Energy | TSE:NVA | 215 net sections |
| Encana Corporation | TSE:ECA | 200 sections |
| Angle Energy | TSE:NGL | 190 net sections |
| Talisman Energy | TSE:TLM | 150 net sections |
| ARC Resources | TSE:ARX | 126 net sections |
| Enerplus Resources | TSE:ERF | 123 net sections |
| Vermilion Energy | TSE:VET | 117 net sections |
| Bonterra Oil & Gas | TSE:BNE | 117 net sections |
| Daylight Energy | TSE:DAY | 112 net sections |
| Vero Energy | TSE:VRO | 111 net sections |
| NAL Energy | TSE:NAE | 110 gross sections |
| Bellatrix Exploration | TSE:BXE | 86 net sections |
| Crew Energy | TSE:CR | 67 net sections |
| Anderson Energy | TSE:AXL | 60 net sections |
| TriOil Ressources | TSXV:TOL | 56 net sections |
| Perpetual Energy | TSE:PMT | 55 net sections |
| Midway Energy | TSE:MEL | 52 net sections |
| SkyWest Energy | TSXV:SKW | 40 net sections |
| Whitecap Resources | TSE:WCP | 39 net sections |
| Pengrowth Corp. | TSE:PGF | 35 net sections |
| Hyperion Energy | TSXV:HYX | 35 net sections |
| Fairborne Energy | TSE:FEL | 32.4 net sections |
| Seaview Energy | TSXV:CVU.A | 22.8 net sections |
| Spartan Exploration | TSE:SPE | 24.4 net sections |
| Yangarra Resources | TSXV:YGR | 22 sections |
| Longview Energy | TSE:LNV | 17 net sections |
| Delphi Energy | TSE:DEE | 16.5 net sections |
| Cequence Energy | TSE:CQE | 15.5 net sections |
| Wildstream Exploration | TSXV:WSX | 15 net sections |
| Equal Energy | TSE:EQU | 11.25 net sections |
| Westfire Energy | TSE:WFE | 5-10 sections |
| Tamarack Valley Energy | TSXV:TVE | 11 net sections |
| Novus Energy | TSXV:NVS | 9.5 net sections |
| Avenex | TSE:AVF | 9 net sections |
| Petroglobe | TSXV:PGB | 9 net sections |
| Base Oil and Gas | TSXV:BOG | 6 net sections |
| Insignia Energy | TSE:ISN | 4.5 net sections |
| Open Range Energy | TSE:ONR | 0.8 net sections |
This is by no means a complete list of companies operating in the Cardium trend since many companies are private and I might have missed other public companies. The net sections reported in the list are extracted from company websites/news releases or the latest presentations available. I decided to use the net sections when possible since it is more accurate. Of course this post does not encourage you to buy or sell any of the securities mentioned above, please do your own due diligence before buying or selling any securities. Please do not hesitate to contact me if you spot any mistakes in the data.
As we enter the second half of 2010 the industry will be ramping up activity in this area considerably. Well production rates are improving as more and more horizontal wells are drilled optimizing recoveries and fine tuning the process of drilling, casing and fraccing.
If you know of any qualifying public company not figuring on this list please feel free to contact me or post a comment and I will gladly add it. I will try to keep this table updated as developments occur since I will be using it as a reference in my research.
My DIY stock portfolio is overweight in Canadian oil producers for a reason. I believe Oil consumption is on the path of growth for the next decade and I intend to take every advantage possible of it:
Updated BXE’s land, noticed in their last news release they acquired 4.25 net sections of Cardium rights.
Added both TriOil Resources and Cequence Energy to the list, thanks for pointing it out.
[...] The Index talks about Alberta’s cardium oil formation, who the key players are, and what they are currently sitting [...]
Might add Compton Petroleum to the list with 133 Sections of Cardium rights. Currently, Compton is the 15th largest Cardium land owner.
Hi Feb,
Thanks for pointing CMT out. The company sold some of their Cardium holdings lately and could not answer me on their land position. We’ll have to wait until the dust settles down with them.
Cheers!
Thanks for compiling this list. I’ve not seen this comparison done elsewhere and it is very useful.
I’ve slowly been picking up some of the players from your list MEL, SPE, BXE, SKW and today Anderson Energy AXL. My thinking was that NG has just about hit the bottom with a cold winter predicted and AXL doing more drilling for oil. Do you have any comments about AXL?
@ken, AXL currently has crappy netbacks and they’ve used 82% of their $125 MM credit line. Having said that, the company is planning a 100% oil focused program for 2011 which will lower debt to cf ratio and increase their netbacks significantly. If oil prices remain stable throughout the year you are looking at an upside of at least 30% from this level ($1.05). Don’t count on NG too much as the fundamentals have not changed yet. For AXL oil is the name of the game, if you believe they can execute, it’s a great buy at this level.
Petrobakkens November Presentation slide 18:
240 net sections in the Cardium.
http://www.petrobakken.com/wp-content/uploads/2010/11/PBN-November-Powerpoint-View.pdf
@C, Thanks!
How do you see VRO now after the recent sale of non core NG asset for about $220 million to reduce debt and pay one special time div of .30 per share to be paid end of March 2012.
Do you see VRO in a good position to get back into the $4.00.
I own a 1/2 full truck at $4.15 av.
Thanks
Hi Jose,
I think it will be hard for VRO to see $4 again this year. They need time to execute and grow production in order to justify a $4/share valuation.
In my opinion, the stock price will wane once the dividend is paid. Of course, I could be wrong.
Mich