CALGARY — Shares in Veren Inc. jumped as the oil and gas producer said it finished 2024 with improved performance out of its wells in northwestern Alberta and would take a breather from big asset deals.
Veren, which changed its name from Crescent Point Energy last year, saw its share price rise around 10 per cent in afternoon trading to $7.60 per share on Thursday.
Chief executive Craig Bryksa told analysts on a conference call that the company expects to generate excess cash flow of between $625 million and $825 million this year based on West Texas Intermediate oil at US$70 to US$75 a barrel and Alberta natural gas prices at $2.25 per mmBTU.
“We are confident about our 2025 outlook and remain focused on operational execution, strengthening our balance sheet and returning capital back to our shareholders,” he said.
Average daily production during the last three months of 2024 amounted to 188,721 barrels of oil equivalent per day, up from 162,269 a year earlier. More than three quarters of that came from Veren’s key operations in the Alberta Montney and Kaybob Duvernay areas, where production grew 10 per cent from the first quarter.
Veren brought two multi-well pads on stream late last year in the Karr South area of the Alberta Montney and two more in the Kaybob Duvernay. In their first 30 days of production, the Montney wells bested average production in the region by 30 per cent and in the Duvernay, they exceeded the average by 25 per cent.
It also increased capacity from its Gold Creek West Facility in the Montney to accommodate future production and has worked to minimize future disruptions by investing in connections to gas plants.
At Gold Creek, Veren had been testing a new type of well design called “plug and perf” to create multiple hydraulic fractures in a horizontal well. But it announced last October that it didn’t work as well as it had hoped, and that it would return to single-point-entry well design.
“Although we view the update as another positive step in rebuilding confidence in the story following last October’s meltdown, we still believe the company needs to deliver several additional quarters of improved operational performance while successfully resuming activity at Gold Creek with single-point entry completion design to restore faith in the story,” Desjardins analyst Chris MacCulloch wrote in a note to clients.
The company has been busy in recent years expanding its presence in northwestern Alberta through acquisitions, including $900 million for Shell Canada’s Kaybob Duvernay assets in 2021, $1.7 billion for Spartan Delta Corp.’s Montney assets in 2023 and $2.55 billion for Hammerhead Energy Corp.’s Montney assets shortly after.
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