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Mergers and acquisitions in the Nipisi-Marten Hills-Jarvie Clearwater heavy oil plays shifted into overdrive during the last two months of 2020. In November, newcomer Headwater Exploration (dark blue on the map) (figure 1) acquired Cenovus ’ Marten Hills assets (approximately 3,000 bopd and 270 net sections), and in December, Tamarack Valley acquired Woodcote Oil’s Nipisi assets (light green) and Highwood Oil’s Nipisi and Jarvie assets (dark green) (combined, 2,000 bopd and 167 net sections). In all, about $189MM of value changed hands—$99MM in the Headwater-Cenovus transaction; $41MM in the Tamarack-Highwood deal; and $49MM in the Tamarack-Woodcote deal (BMO, 2021) . Tamarack Valley and Headwater join Spur (purple), Deltastream (cyan) and Crestwynd (light blue) as the major operators in the play. These deals are looking pretty shiny as oil prices have strengthened from the pits of the earth in April 2020 to WTI hovering in the mid $50s in early February 2021. CDL’s analysis shows robust economics for the play when WTI is above $40 (figure 2) . The Clearwater play grew from just a few hundred barrels per day in January 2017 before peaking around 34,000 bopd in February 2020 while WTI oil prices ranged from $45 to $71 […]
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