Everything that’s old is new again, including parts of western Canada’s largest oil pool.
The Cardium zone has been catching much attention lately, thanks to new technology that is allowing oil and gas outfits to get at hydrocarbons otherwise beyond their reach. Peters & Co. published a 54-page guidebook on the Cardium this week, and it came with this warning: “The recent focus has been on unconventional opportunities in the Cardium, with a proliferation in blanket statements and assumptions concerning the zone.”
Fair enough. But, hey, sometimes you sweeping statements are helpful.
“Nevertheless, as long as oil prices remain high (>US$75 per barrel), activity levels will mirror the commodity price and, although the long-term economics can still be debated, the payouts appear short (~32 months at US$75 per barrel), thereby limiting the economic downside,” the report said.
Peters believes it is “critical” to distinguish between conventional and unconventional opportunities in the Cardium, and that medium-sized entities have the best shot at making a go of it.
The break-even price for the play, Peters estimates, is about US$53 to US$64 per barrel, with the east Pembina coming in at the low end, and its western counterpart at the top.
Among companies operating in the unconventional Cardium Garrington zone, Peters’ top picks are NAL Resources, and Wild Stream Exploration Inc.
Bonavista Energy Trust Ltd., Bonterra Energy Corp., and PetroBakken Energy Ltd. are Peters’ favourites among those in the unconventional Cardium Pembina East category.
Finally, the Calgary-based independent brokerage favours Bonterra, PetroBakken, Daylight Resources Trust Ltd., and Vermilion Energy Trust in the unconventional Cardium Pembina West group.