RE:What will happen when CVS Albright comes onlineBased on the ratio of historical production vs plant capacity, my guess with what's been announced we're looking at ~30,000 boepd nameplate at Wembley and ~25,000 boepd at Pouce Coupe etc... Wembley will be 50%+ liquids (57% 2023). Pouce Coupe if all the increase is Charlie Lake type liquids (50%), could in theory get to 40% (33% 2023). Kelt Alberta overall excluding Other, would then be 55,000 boepd 45% liquids (37% oil???). Wild guess obviously.
What I find really interesting and of tremendous value IMO is if they can interconnect Wembley and Pouce Coupe gas processing wise, then they could accelerate Charlie Lake drilling. This would increase liquids % quite a bit. It lowers the RLI (# of years of wells remaining to be drilled) of course but those gas processing facilities could be filled with Wembley production.
Eventually, there's probably no need to report Wembley and Pouce Coupe reserves separately. If (wild spec) Wembley gets to 350MM 2P @ 50% and Pouce Coupe 150M 2P @ 30%, the overall is 500MM @ 44%. Compares favourably to ARX 2P @ 33.5%.
And then its a matter of adding gas processing, growing production, acquiring lands here and there, all from cashflow. And that's what eventually gets sold. Way higher valuation IMO.
The key in all this is that from this amateur point of view, it doesn't matter what gas gets sent to be processed at the gas processing facilties as long as it left a lot of liquids behind at the wellhead. If that makes any sense.
Overall, this approach leverages AB infrastructure. The idea being to treat Alberta Montney (and Charlie Lake) as one integrated field, drilling the most economical wells first and feeding gas plants with what is essentially associated gas from those.
I like this a lot more than Oak. I know Oak is huge and LNG Canada is the __________ land, but those are big boy plays IMO: Secure an LNG contract, build a huge plant, drill a whole bunch of wells, ramp up production. Its not really what Kelt does (or can afford to do).
Even if Kelt takes the cashflow from Alberta to fund Oak (I think that's what they're doing now to some extent), the selling problem will remain: do you have an LNG contract? Otherwise you could end up selling 100,000 boepd of gas at times for 1 cent per MMcf. That would be a good way of away juicy cashflow from the Wembley and Charlie Lake plays (Shell and their partners will gladly invite you to all the dinners you want).
Oak dilemma is the same as dry gas production down south has been facing recently. If you werent hedged (most were), you've basically been going out of business until recently. Everybody thought they'd struck gold with LNG not realizing they were being played so to speak by the exporters. That's why all of them but esp the biggest and largest dry gas producers (CHK/SWN and EQT) hedge out or they don't drill and complete now (latest EIA report was abysmal in that regard), and they especially want to be on the head of LNG contracts going forward. No Mas. Fool me once, shame on you. Fool me twice, shame on me.