Canadian Oil Companies Boast Strong Production Rates

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Canadian oil producers posted higher output during the first quarter. Their break-even prices, meanwhile, are well below current market levels.

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Athabasca Already Planning for More

Canadian energy companies continued to boast of strong production gains for the first quarter, with Athabasca Oil announcing Thursday its overall output improved 7% over year-ago levels.

Industrial Info Resources data show nearly 130 drilling-related projects with at least an 80% chance of completion that combine for a total investment value of US$17 billion. The largest project by spend for Athabasca is the Leismer steam-assisted gravity drainage (SAGD) program in Fort McMurray, Alberta, carrying an initial value of US$200 million in addition to possible expansion projects. It can yield as much as 60,000 barrels per day (bpd).

On Thursday, Athabasca said its overall production averaged 40,242 barrels of oil equivalent per day (boe/d) during the three-months ending March 31, which marked a 7% increase over the same period last year.

At Leismer, the company said a winter drilling program that ended in March saw 12 new well-pairs come online with laterals extending about a mile.

"These wells pairs will begin steaming in the second half of the year on a phased basis following the facility turnaround in May, driving strong production growth in the back half of 2027," Athabasca said in a statement.

The expansion, which could be completed in late 2027, could add another 40,000 bpd to Athabasca's portfolio. Elsewhere, the company said its break-even price ranges from $44 per barrel for West Texas Intermediate (WTI) to $55, depending on the assets.

In January, U.S. federal estimates pointed to WTI averaging $52 per barrel in 2026, but conflict raging in the Middle East since February has added a significant risk premium to crude oil. WTI was trading at around $90 per barrel on Thursday, well below recent highs above $100 per barrel, on signs of a tentative cease-fire.

Canadian Prime Minister Mark Carney is working on a trade diversification initiative in response to the frequent barbs from U.S. President Donald Trump, who is pursuing a decidedly protectionist trade policy. With some of the largest oil and gas deposits in the world, Carney wants to establish Canada as a global energy superpower.

"In a period of global uncertainty and heightened demand for reliable energy, Canadian producers are well positioned to develop our natural resources, create high paying jobs, and support long term prosperity across the country," Lisa Baiton, the head of the Canadian Association of Petroleum Producers, said last week.

Don't Forget About Canada's Natural Gas

In terms of natural gas, TC Energy, formerly TransCanada, reported Friday that natural gas pipeline deliveries to the Canadian market averaged 29.7 billion cubic feet per day (Bcf/d), up 3% from the same period. The company set a record with 33.2 billion cubic feet in deliveries on January 22.

TC Energy's Coastal GasLink Pipeline stretches some 416 miles to Kitimat, helping to support ambitions for more exports of liquefied natural gas (LNG) from the coast of British Columbia. TC Energy in March said it signed commercial agreements to expand the project to accommodate more LNG deliveries.

LNG Canada recently said it has delivered 80 cargoes of LNG to global markets since operations began last year. From two liquefaction units, the facility can churn out about 14 million metric tons per year of LNG. LNG Canada, the only facility in North America capable of exporting from the Pacific Coast, started operations only last year.

By the Numbers

• 80 cargoes of LNG from LNG Canada since last year
• $44-$55 per barrel break-even for Athabasca

Key Takeaways

• Canadian break-evens below current market levels
• Companies are reporting year-on-year gains in production

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).