Market context: Land sales and prices are up. Is NW Alberta a new exploration frontier?
Land sales across Alberta increased in 2024 and prices per hectare rose significantly with the Duvernay, Glauconitic Sandstone and heavy oil formations all major targets. Northwest Alberta could be a new exploration frontier for operators in 2025 given recent licensing and drilling.
- In 2024, land sales increased to $474 million, reflecting a rise of $40 million from 2023 and an increase of $14 million compared to 2022.
- The average price per hectare increased by 32.1% to $707 in 2024.
- The highest prices targeted the Montney area near Elmworth; land at Pembina and Willesden Green has also been in demand.
- High bonuses have been paid in heavy oil areas, including at McMullen, prospective for the Wabiskaw, and at Cold Lake where operators target the Mannville stack (Sparky, Waseca, Rex, Lloydminster, and GP formations).
- In West Central Alberta operators hope to build on drilling success in the Glauconitic Sandstone.
South Duvernay liquids plays take shape
Positive drilling results in the Pembina and Willesden Green Duvernay plays resulted in strong land sale activity in 2024.
At Pembina, 65,312 ha of rights were acquired for approximately $25 million. A posting at Pembina’s Carrot Creek totaling 8,320 hectares was sold that included P&NG rights from below base Rock Creek to the basement. Teine Energy has been developing the Duvernay in the area, and recently drilled an eight well pad, 10km to the east of the posting.
At Willesden Green, 43,700 ha of rights were acquired for approximately $71 million.
The largest posting was an amalgamated checkerboard of 14,720 ha acquired for a combined bonus of $46.79 million. Spartan Delta and Paramount Resources have been drilling the Duvernay in the area. The posting is due west of the Homeglen Rimbey Reef complex, with the majority within the liquids-rich gas area with ratios greater than 400 bbl/mmcf.
Multilaterals expanding heavy oil plays
Operators continued building land positions around key heavy oil plays in 2024 as multilateral wells open more reservoirs for economic production.
At McMullen, 34,304 ha were acquired for $57 million, including these highlights:
- Synergy Land purchased 21,760 ha of oilsands rights for a bonus of $39.13 million (March 6 sale). The parcels are approximately 10km north of the Marten Hills Clearwater activity, and 5 km southeast of Spur Petroleum’s McLeod Lake Clearwater development. Tamarack Valley has been drilling longer laterals in the northern end of the Marten Hills Clearwater play.
- 75 sections of oilsands rights sold for $10 million in the Driftwood area (September 18 sale). These parcels are due south of CNRL’s recent Wabiskaw development. The nearby CNRL Wabiskaw 102/15-36-078-23W4/00 well produced at a daily calendar rate of 459 bbls/d in the last month from a seven-leg multilateral.
- At Pelican, approximately 10km north of Clearwater Marten Hills, 39 sections of oilsands rights sold for a bonus of $7.89 million (December 11 sale). The land is adjacent to 24,320 ha previously purchased in 2024 for a combined bonus of $49.14 million. No wells have been drilled on the 2024 land sale purchases to date.
At Cold Lake, 37,347 ha of rights sold for $37.26 million, including these highlights:
- 7,296 ha of oilsands Mannville rights sold for $12.75 million (April 3 sale). Since 2020, CNRL, Baytex, and Caltex Trilogy have been targeting the Mannville Sparky with open-hole multilaterals in the area.
- Six sections of Mannville rights sold for a bonus of $1.34 million (May 1 sale). The closest Sparky pad is 9.5 km to the northeast, and this 11 well CNRL pad produced at a calendar daily rate of 119 bbls/d/well in the last month.
Glauconitic Sandstone target of west central Alberta land sales
Approximately 20,175 ha prospective for the Glauconitic Sandstone in west central Alberta sold for $41 million in 2024, including these highlights:
- A large land posting of 7,472 ha sold for a bonus of $26.28 million in the Ricinus area (August 21 sale). In the last five years, the Glauconitic Sandstone has been targeted by Whitecap Resources, Tourmaline and Taqa in this area.
- A parcel consisting of 10 sections sold for a bonus of $2.84 million at Caroline (October 16 sale). Forty-seven of the most recent Glauconitic wells in the townships to the north averaged a calendar daily rate of 112 bbls/d in their first month.
Northwest Alberta land sales could be new exploration frontier
The Rainbow/Zama and Haro areas of northwest Alberta saw large rights purchases in 2024.
Almost 77,000 ha sold at Rainbow/Zama for $8.52 million, including a large posting of 53,952 ha that sold for a bonus of $6.87 million. The Keg River reefs, Muskeg interbedded dolomite layers, Muskwa source rock, and lithium brine waters are of interest over these lands.
Cenovus recently licensed and drilled two Jean Marie wells offsetting these recent land sales which would open a new play concept in the area. Interestingly, most wells in the area that have drilled through the Jean Marie, and have a mud log, have oil shows through the Jean Marie interval.
At Haro, $6.08 million was spent on 47,808 hectares for an average of $128/ha. The last time wells were drilled in this area was 2012, targeting the Pekisko, and only produced at 15 bbls/d in the first month. With new drilling and completions technology this play could potentially see some new life.
Given the large size of the posting, the operator may also be revisiting the Muskwa resource play in the area.
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