Athabasca Oil Corp., Calgary, has closed a deal with Cenovus Energy Inc. to create Duvernay Energy Corp., a privately held subsidiary of Athabasca.
Athabasca and Cenovus both contributed assets into Duvernay Energy combining Athabasca's existing Duvernay assets, Athabasca’s new 100% working interest Duvernay assets, and Cenovus' 100% working interest Kaybob Duvernay assets.
Athabasca owns a 70% equity interest in Duvernay Energy with Cenovus owning the remaining 30%. Duvernay Energy, to be managed by Athabasca through a management and operating services agreement, is owned 70% by Athabasca Oil and Cenovus owning the remaining 30%.
Creation of the privately held company is designed to provide “a clear path for self-funded production and cash flow growth in the Kaybob Duvernay resource play…without compromising Athabasca’s capacity to fund capital in its Thermal Oil division or its return of capital strategy,” as Athabasca Oil and Duvernay Energy have “independent strategies and capital allocation frameworks,” according to a release by Athabasca Oil Feb. 6.
Guidance for Athabasca’s Thermal Oil division remains unchanged with a $135 million (Can.) capital budget and production guidance of 32,000-33,000 b/d. At Leismer, the company is currently steaming well pairs at Pad L8 South and infills on Pad 7. The facility expansion is on track to be commissioned in the spring and following the tie-in of behind pipe wells production is expected to reach 28,000 b/d mid-year. At Hangingstone, two 1,400 m well pairs will spud in third-quarter 2024.
Duvernay Energy 2024 guidance
Current production from Duvernay Energy assets is 2,000 boe/d (75% liquids). Production is expected to grow to 3,000 boe/d this year (75% liquids). Athabasca Oil said development plans under way and expected to drive estimated production of 6,000 boe/d into 2025.
The 2024 capital program is $82 million (Can.) and includes the drilling of 12 gross (7.1 net) Duvernay wells. The program includes 5 net 100% working interest wells and 2.1 net 30% working interest wells on the joint venture lands.
Duvernay Energy recently rig released a two well pad (100% working interest) at 03-18-64-17W5 with an average horizontal length of 4,150 m per well. Completion operations are planned for first-quarter 2024 with on-stream timing at the end of second-quarter 2024. A three well pad (30% working interest) is expected to spud in February with completions and tie-in to follow in the spring.
