Clearwater’s ‘Land Rush’ – What It Means For Prices And Availability

The Clearwater is one of the premier economic oil plays in North America, thanks to its relatively shallow depths and its low cost of development, deploying open hole multilateral horizontal wells that require zero stimulation.

While the cost to complete wells is not a barrier to operating in the Clearwater, the cost to purchase land certainly has been. The price has been driven up due to the play’s success and strong economics, especially in the premier areas of Nipisi and Marten Hills, where little land is currently available.

The volume of acquired land in the Clearwater totalled 60,000 ha in 2019, rising to approximately 106,000 ha in 2021. This ‘land rush’ resulted in prices greater than $3,000 per ha in some areas, with bonuses surpassing $4 million.

For example, in 2021, Synergy Land Services Ltd. acquired land in Nipisi for $3,222/ha. And in 2018, Headwater Exploration acquired land in Marten Hills for $3,109/ha.

So, what happened to land sale prices this year?

Land postings have slowed to a minimum. During 2022, just a single sale popped up in either Nipisi or Marten Hills. This is primarily due to companies extending the Clearwater play fairway to the northwest, into the Peavine and PRA areas.

“Multi-leg lateral drilling technology has proven very successful in the development of the Clearwater,” said Bruce Hancock, director, Technical Advisory Group, for geoLOGIC systems ltd. “The economics have been very strong and paying out in several months, so you are seeing companies like Tamarack Valley expand their position by acquiring companies like Deltastream and Rolling Hills, who were in early and acquired land position at minimal cost.”

With the slowdown in postings, and despite significant interest, few new operators have entered the play. A total of 15 operators drilled wells in 2021. That has risen by just one so far in 2022. And with the current cost of entry trending upwards, land prices may be out of reach for some players.

Click here to view land sales for the last six years in the Nipisi and Marten Hills areas, as well as the record setting land agreements in the Clearwater. This visualized data is instantly available free of charge to guest users of geoLOGIC’s gDC Cloud.

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