OGFJ, CanOils present 2007 year-end data, analysis on Canadian firms

Richard Krijgsman, CanOils, Calgary

OGFJ has teamed up once more with CanOils, Canada’s independent provider of oil and gas company information and analysis, to create the OGFJ Canadian 100. This report contains information from the CanOils database for year-end 2007.

Canadian Natural Resources (CNRL) maintained its position as Canada’s top producer, growing its output by 8% during the year to 520,000 barrels of oil equivalent per day (boe/d). The leader was closely followed by EnCana, Husky, ExxonMobil (via its 69.6% share in Imperial Oil and wholly-owned ExxonMobil Canada), Suncor, and Petro-Canada.

Firms with substantial international operations, such as ConocoPhillips, Talisman, and Devon Energy continue to dominate the top ranks, while PennWest Energy Trust maintained the position in the top 10 reached last year. These top 10 companies produced three million boe/d in Canada in 2007, up 2% from the previous year, and equivalent to two-thirds of total output from the Canadian Top 100.

Industry consolidation has caused a significant number of companies to disappear from the list compared to the mid-2007 CanOils Canadian 100 ranking published in the December issue of OGFJ. Most new entrants to the Canadian market have been interested in the oilsands - for example, Total with its Deer Creek, and more recent Synenco deals, Marathon with the acquisition of Western Oilsands, and BP with its joint venture with Husky. Norwegian StatoilHydro has also bought into the sector, but has no current production.

Acquisitions from outside Canada of conventional reserves – as done by Abu Dhabi-based Taqa who acquired Northrock, Primewest Energy Trust, and the Canadian assets of Pioneer and Pogo – were rare.

The Energy Trusts are busy consolidating, with Canetic Resources, Focus, Thunder, Sound, and Vault all being acquired by existing Energy Trusts since mid-2007. The total 116,000 barrels of oil equivalent these Trusts produced have swelled the production profile of those companies that are left in the sector. Some of the Trusts have also been actively acquiring junior companies such as Grand Petroleum (acquired by Harvest Energy Trust), Titan (acquired by Canetic before it was itself taken out by Penn West), Capitol Energy Resources (Provident Energy Trust), and Innova Exploration (Crescent Point).

Mergers and acquisitions among the juniors have also featured over the last six months and caused a number of companies to fall out of the rankings as one junior acquired another. Companies that have left the rankings include Real Resources, Rider, Cyries, Bear Ridge, Caribou Resources, Peerless Energy, Fairquest, Diamond Tree Energy, Rockyview Energy, and ExAlta.

The dozen or so new entrants to the Canadian 100 include Sabretooth, Twin Butte, Wrangler West, Masters Energy, Flagship Energy, Open Range, TransGlobe Energy, Questerre Energy, Yoho Resources, Cinch, Arsenal, Great Plains, and Arcan; however, average production of the new entrants is less than 1,500 boe/d - 500 boe/d – less than the smallest producer in the mid-2007 rankings. Thus, it would appear that the process of industry consolidation is reducing the size of the company at the lower end of the rankings as well as increasing the average size at the upper end.

Note that financial data are for the entire company (in Cdn$), not just the Canadian operations, and the list excludes private companies. Some firms (mainly US-based) report production after royalties while the majority of Canadian companies report production before royalties. Not included in the list are a number of Toronto Stock Exchange-listed companies such as Niko Resources, Denbury, Addax, and others that have substantial production, but whose operations are based entirely outside Canada.

Click here to download a .pdf of the OGFJ Canadian 100 Companies ranked by total Canadian oil and gas production: year-end 2007