Gas production in Alberta has taken a major hit in recent days following ongoing wildfires in two major producing regions of the province. Several operators have been forced to shutter production temporarily in an effort to ensure the safety of its employees.
Production has been largely shuttered in two major areas of the province, the first being the Kaybob Duvernay region in west-central Alberta. Crescent Point Energy (TSX: CPG) has indicated that it was forced to temporarily shutter 45,000 boe/d of production due to the risk posed by the fire. The production figure represents the company’s entire production capacity within the region, which it acquired over the last several years via purchases from Shell, Repsol, and Paramount Resources for a combined $1.35 billion.
READ: Crescent Point Drops $1.7 Billion To Acquire Spartan Delta’s Montney Assets
Paramount Resources (TSX: POU) meanwhile has been impacted on multiple fronts by the ongoing wildfires, reporting that operations in both the Kaybob region, as well as the Grande Prairie region, have been shuttered to some degree. Collectively, the company has temporarily halted 50,000 boe/d of production from the fires. The company in its most recent quarter saw 19,201 boe/d of production from the Kaybob region, and a further 69,507 boe/d production in the Grande Prairie region, suggesting that all infrastructure in the affected regions has not yet been shuttered.
Kiwetinohk Energy (TSX: KEC) was more vague than its peers, announcing a partial shutdown of its its Placid operations, which are in the Duvernay region. The company failed to indicate an impact in terms of production, and blamed the temporarily production halt on downstream third part interruptions. Chevron (NYSE: CVX) was also vague, stating that all personnel have been evacuated and operation sites secured, without providing specifics on the production impact.
The fires in the Grande Prairie region have also impacted Pipestone Energy (TSX: PIPE). The company has been forced to temporarily curtail 20,000 boe/d production from the region.
Operations by Vermillion Energy (TSX: VET) in West Central Alberta have also been impacted, with the company indicating this morning 30,000 boe/d of production has been taken offline due to wildfires. The figure represents over half of the firms 54,991 boe/d of production in Canada during the first quarter.
In terms of damage, Vermillion has indicated that “minimal damage to key infrastructure” has occurred, while Pipestone has stated that it is “not aware of any significant damage or loss to owned or third party infrastructure.” Similar commentary was reiterated by Paramount Resources, while Crescent Point stated that no damage has been reported to the company’s assets.
There are currently 105 active wildfires in Alberta, of which 27 are labeled as being “out of control,” with 405 wildfires occurring year to date.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
