Word To The Wise: February Expiring Lands Report
February 14, 2023
XI Technologies: February 2023 Alberta Expiring Land Report
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Last week, XI Technologies published an article on the drilling activity on Bakken Formation. This week, we’ll discuss February 2023 Alberta Expiring Land Report. It is especially important because it can provide useful business development intel for service companies and E&Ps alike.
For service companies, expiring lands provide insight into where drilling activity is most likely to occur over the coming months, and who is behind it. For E&Ps, the expiring land report helps flag farm-in opportunities and/or land that may come available in your core area(s).
According to AssetBook data, these are the top 25 companies with expiring lands in Alberta over the next 12 months:
(Download our February Expiring Land Report here)
*Figure 1 – Top 25 expiring hectares
When looking at the top 25 companies (Fig. 1), it is also useful to look at the land numbers in context to the overall total of expiring land. These 25 companies represent 68% of the total 3,077,198 ha expiring in Alberta in the next 12 months. An additional 280 companies represent the remaining 32% of expiring land.
25 of 305 companies represent 68% of land expiring in the next 12 months.
It makes sense, as these are generally also the largest operators in Alberta.
Looking at the same land search after removing the expiry criteria, and grouping by company, we can calculate that the top 25 companies by total hectares in Alberta represent 60% of the total land in Alberta. They represent only 2% of companies but hold 60% of the total 30.2 million crown hectares in the province. From a total percentage expiring, the 3,077,198 hectares represents 10% of Alberta’s total 30.2 million crown hectares.
10% of the total land in Alberta is expiring in the next 12 months.
Comparing expiring land to total land by company for the top 25 companies listed above, we can see how the expiring land compares to their total land base. The percentage of total expiring ranges from 4% to 66% with an average of 11%.
*Figure 2 – Expiring land as a percentage of the total company land in Alberta.
Of the top 25 companies with expiring land, the land represents an average of 11% of their total land holdings.
The total percentage of the company’s land expiring might be a factor when looking at potential opportunities. This percentage, however, is only one piece of the puzzle when looking at opportunities.
In addition to knowing the top 25 companies with lands nearing expiry, it may be useful to know the bonus amounts that were paid on those lands. AssetBook allows you to easily identify and rank expiring lands based on the size of bonuses paid. This will help you prioritize companies that have the most money on the line and therefore may be more open to farm-in or partnership opportunities.
*Figure 3 – Top 25 expiring bonuses
As with the total land, the top 25 companies, or 8% of the total companies, represent 67% of the total expiring bonuses.
By comparing the two charts, and corresponding values, you can calculate the average $/ha for these top 25 companies. They may have significant value expiring, but how does the total compare to the total ha expiring? How valuable is the land expiring relative to the total pool of expiring land?
By plotting $/ha from highest to lowest, you can see the value of the land expiring by company. This gives you an understanding of how valuable the land may be to each company, which may correlate to motivation to explore opportunities.
Figure 4 – The top 25 expiring average bonuses by $/ha are ranked from highest to lowest by company.
There is a significant range of value per hectare on the lands expiring in the next 12 months.
The value per ha of land expiring in the next 12 months ranges from +$5000 to <$100.
When looking at potential opportunities, the total numbers are only a starting point. Looking at the totals in context of both overall company totals as well as the unique value of the land itself can give you a better picture of how valuable the land may be to each unique company.
Also, in our blog Expiring lands vs Drilling Activity we dug deeper into expiring land by region. Click here to read about it
Is there more you would like to see in the expiring land report? Contact us here.
AssetBook allows you to search for expiring lands by province, by company, or by any geographic area. The results can be viewed in tabular format or displayed on a map to help with visualization. To learn more about how the data in AssetBook can help you, contact XI Technologies.