Canada's gas goliaths: how they've grown and what comes next Report

Insight 08 November 2021

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Report summary

The October average AECO price of US$4.4/mmbtu has not been seen since 2014. A lot has changed since 2014. Gas producers in Western Canada have had to face severe discounts to US Henry Hub prices and the major players in the market have markedly shifted. Tourmaline has nearly doubled its gas production over the past four years. It has achieved this through both organic and inorganic growth while CNRL has marginally increased its production through acquisitions. ARC Resources has also seen its status rise, nearly tripling its gas production as a result of drilling its Montney acreage and its recent merger with Seven Generations. Operators remain disciplined with respect to drilling and capital allocation. Western Canada gas supply has been increasing as producers return to 2019 activity levels and increasingly drill for dry gas. We expect a new peak production level shortly. Corporate discipline will be tested for the first time in years.

Executive summary
Canada’s leading gas producers
- Big stays big
- Pure play specialists mix between drill-to-fill and growth
- LNG players chill out
- Several international names bid adieu or allow declines to set in
- Tourmaline on an astronomic rise from organic and acquisitive growth
Survival tactics
Rig trends support our growth forecast
Lessons applicable to other regions