Whitecap and Veren Combined – XI Takes a Look at the Analytics Involved
March 18, 2025
Whitecap Resources Inc. (“Whitecap”) and Veren Inc. (“Veren”) have announced a strategic combination for $15 billion. The result of this all-share merger is the creation of the largest landholder in Alberta’s Montney and Duverney regions, two of North America’s most important shale plays. In this article, XI Technologies uses AssetBook – the largest asset evaluation tool in the Western Canadian Sedimentary Basin (WCSB) – to analyze the potential strategies involved.
First, AssetBook has identified Whitecap at roughly 170k barrels of oil per day (BOE/d) and Veren at $167k BOE/d, jumping this new company into the 5th spot of largest producers in the WCSB, with the top spots still held by Canadian Natural Resources Ltd at $948k BOE/d, Cenovus Energy Inc. at $779k BOE/d, Tourmaline Oil Corp. at 542k BOE/d and Ovintiv Canada Ulc at $343k BOE/d.
This deal would translate to a new company valuation of roughly $44,500 a flowing boe using the AssetBook ownership module. XI uses a 6:1 Boe ratio which, given the liquid nature of the main gas play for this deal, will be a little conservative. Using the valuation from the press report, the company is claiming a combined boe of $370,000 or $40,540 a flowing boe. As AssetBook does not include any production from mined operations, our numbers are for production that is coming from wells only.
Next, XI Technologies evaluated the Whitecap and Veren combination through different lenses using AssetSuite software tools, looking at each company’s asset profile plus the combined entity, to gain valuable insight into the transaction. Consideration was given to the fall out and which other players in the area may be affected. This deep dive gives a comprehensive understanding and full picture of the resulting acquisition.
While the absolute numbers tell one story, accretion and dilution metrics tell us more. Looking at the AssetSuite summary, we can calculate some accretion and dilution metrics for this transaction relative to the increase in production.
Per Figure 2 below, based on Whitecap absorbing Veren, Whitecap’s production base will almost double through this acquisition, while liabilities will only increase by 37%. The Veren assets don’t appear to be quite as long lived as Whitecap’s base, but they do potentially add operational efficiency with a substantial increase in the average well rate.
The best way to see the core of this deal is to overlay Veren’s production heat map on Whitecap’s well map. Both companies are quite spread out making it unlikely that anything will become a fall out property from this deal.
We can also view the combined production in a heat map (Figure 4 below) to see where the largest increases are.
Figure 4 – Map of Whitecap and Veren assets. Source: XI Technologies AssetBookAs this arrangement augments the production in Montney and Duverney plays, it is worth looking at the production graph for each.
Figure 5 & 6 – Graph of zones for Whitecap and Veren combined assets – Montney Play and Duvernay Play respectively. Source: XI Technologies AssetBook
A CORE AREA OVERVIEW
With the AssetBook we can create an area around the different plays or geographical interests and analyze the competition or potential further acquisition opportunities. Let’s view their Duvernay area and see what strategic moves could be addressed.
Drawing a box from 59-16 to 65-24 below gives us a good bounding around this play for this new entity. This area is predominantly Duvernay production with approximately 74% of the production coming from this zone.
The new Veren/Whitecap entity is the largest player in this area with approximately 56,213 boe/d of the 174,448 boe/d producing from this area, representing 32.23% of the region’s total production. The area has 55 producers and over 80% of the production is held by the top 10 producers. This is primarily a gas producing area with slightly more than 85% of the production coming from gas. Download more information on the companies in this area here.
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