Canadian Natural Resources gas, oil businesses grow on acquisitions, activity
Two recent acquisitions have solidified Canadian Natural Resources Ltd.'s formidable positions in the natural gas and heavy oil businesses in Canada and expanded its land inventory in western Canada.
By OGJ editors
HOUSTON, Aug. 12 -- Two recent acquisitions have solidified Canadian Natural Resources Ltd.'s formidable positions in the natural gas and heavy oil businesses in Canada and expanded its land inventory in western Canada.
After focusing on gas exploration in Canada in 2001, CNRL exited the first quarter of 2002 as the country's second largest gas producer.
Companywide production at the end of the second quarter averaged 1.5 bcfd of gas and 205,000 b/d of oil.
Acquisition of conventional heavy oil properties in the Lindbergh area of eastern Alberta on Aug. 9 followed the $2.3 billion (Canadian) acquisition of Rio Alto Exploration Ltd. as of July 1, 2002. The acquired properties at Lindbergh are making 13,000 b/d of oil and 10 MMcfd of gas, and Rio Alto's pre-acquisition production was better than 410 MMcfd.
Second quarter 2002 was CNRL's seventh straight quarter of gas production growth.
During the quarter the company filed for regulatory approval to construct, operate, and reclaim the proposed Horizon Oil Sands Project 80 km north of Fort McMurray. Production of 34-36° gravity synthetic crude oil would begin there in late 2007 (OGJ, June 10, 2002, p. 24).
CNRL drilled 404 stratigraphic test wells on oil sands leases at Horizon and in northern Alberta and western Saskatchewan in the first half. The property has 16 billion bbl of oil in place, of which 6 billion bbl is considered recoverable.
Oil and liquids production decreased from the comparable periods in 2001 as a result of the gas focus, due partly to the drilling of fewer oil wells and to the intentional shut-in of some heavy oil production in December 2001 through early second quarter 2002.
The Rio Alto assets and teams were integrated within days of closing, CNRL said, and the acquisition is proceeding better than expected. The acquisition gave CNRL a new core area for gas exploration and exploitation in Northwest Alberta that contains 2 million net undeveloped acres.
This brought the companywide holding of undeveloped lands to 10.6 million net acres, second largest in western Canada. The largest sectors are 3.7 million acres in North Alberta-West Saskatchewan and 1.5 million acres in Northeast British Columbia-Northwest Alberta.
CNRL has other core areas in the North Sea and West Africa.