Crescent Point Energy Corp. is among players with a toehold in the oil-rich central Alberta region, though its chief executive is coy about whether it is one of the more recent buyers.
A land rush in central Alberta is accelerating, pushing up prices and stoking expectations of big spending in the oil-rich area.
Several publicly listed companies have joined a handful of private explorers in snapping up drilling rights in the eastern portion of the Duvernay shale deposit, making large wagers on prospective land even as crude prices teeter around $50 (U.S.) a barrel.
The jockeying by producers shows potential for investment outside the capital-starved oil sands remains high, and marks a rare display of exuberance in an industry rife with cutbacks.
Crescent Point Energy Corp. is among players with a toehold in the region, though its chief executive is coy about whether it is one of the more recent buyers.
The company, better known for its Saskatchewan operations, picked up lands in the Alberta zone through its 2015 acquisition of Legacy Oil + Gas Inc. It has also partnered on a well there with private-equity-backed Artis Exploration Ltd., raising questions about its future plans.
For competitive reasons, CEO Scott Saxberg would not say if he is adding to the position through land buys. Nor did he completely tamp speculation.
"All of these plays take several years to develop, so I think it's super-early days still," he said in an interview, adding: "It's definitely an interesting play for Alberta."
Industry land purchases are closely guarded and often conducted by agents on behalf of companies that want to shield their identities, making it difficult to tell who is buying what. But the area, located near Red Deer, Alta., has drawn hefty premiums at recent auctions.
One sale last month generated proceeds of $34.3-million (Canadian), the second-highest in Alberta this year and more than double the year-to-date average of $16-million, according to TD Securities Inc. Several leases fetched more than $5,000 a hectare.
Gregg Scott, president of Scott Land & Lease in Calgary, said there are also thousands of so-called freehold leases that have expired or will expire in the next year, giving companies access to lands exempt from government royalty payments.
"For astute and well-funded companies, it is an ideal time to be building a land position," he said.
To be sure, development is in its infancy, with much of the activity so far driven by private companies. They include Vesta Energy Corp., backed by Riverstone Holdings and JOG Capital, and Artis, which is supported by Calgary-based Annapolis Capital.
New arrivals include publicly traded Traverse Energy Ltd. and InPlay Oil Corp. Each licensed their first wells last week. Raging River Exploration Inc. will drill its first well by year end, with another six planned for 2018.
It costs around $7-million right now to drill a well in the area, but that will likely fall as productivity increases, making development viable at lower crude prices, Raging River president Bruce Beynon said.
"It's a little early to define where the sweet spots are," he cautioned.
For its part, Calgary-based Crescent Point has faced pressure to show it can grow production without making deals financed through big share issues.
But a move into Alberta would mark a departure for a company that has made much of its preference for Saskatchewan and has emerged as a staunch ally of its departing Premier, Brad Wall.
Last year, Mr. Saxberg appeared in ads produced by Mr. Wall's government touting the advantages of investing in the Prairie province. Mr. Wall has repeatedly sparred with his counterparts in Edmonton and Ottawa over climate policies.
Mr. Saxberg said the company is always interested in developing new areas, but its current focus is expanding operations in the Uinta area of Utah, as well as its home base of Saskatchewan.
"We have assets for sale in Alberta at the moment, and we just sold some Alberta assets," he said. "So directionally, I think that's, at this stage, where we're headed."