Canadian Natural Pulling Montney Sale Eases Energy Asset Glut

Canadian Natural Resources Ltd. (CNQ)’s decision not to divest 250,000 acres in British Columbia’s Montney Shale may help ease a glut of energy assets for sale in the nation.

Retaining the Montney acreage removes the biggest asset on the block to supply proposed liquefied natural gas plants on the Pacific Coast, said Todd Kepler, an analyst at Cormark Securities Inc. in Calgary. Canadian Natural said today none of the bids for the acreage, which hold the equivalent of 6.7 trillion cubic feet of gas, were sufficient. The land may have been worth C$1 billion ($922 million), said Kyle Preston, an analyst at National Bank Financial.

Other companies with Montney land, including Crew Energy Inc. (CR), Painted Pony Petroleum Ltd. (PPY) and Birchcliff Energy Ltd. (BIR), stand to gain from a reduction in available acreage for sale, Kepler said. The potential to ship Canadian gas overseas as a liquid helped prompt a flood of assets for sale in the region as companies including Exxon Mobil Corp. (XOM) and Petroliam Nasional Bhd. consider building multibillion-dollar export terminals.

“What it does do is remove that overhang,” Kepler said today in a phone interview. “It moves up the other players who may have felt they were crowded out.”

Canadian Natural’s decision follows the C$1.5 billion November sale by Talisman Energy Inc. of Montney acreage to Malaysia’s Petroliam Nasional. Calgary-based Canadian Natural put the holding up for sale in March and said at the time it would sell or partner with a buyer that has LNG expertise.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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