Key Investor Insights on the Montney Formation’s Rich Natural Gas Resource

Unique geology

The Montney Formation is part of the Western Canadian Sedimentary Basin. The Montney resource spans an area over 130,000 square kilometers, making it Canada’s largest source of natural gas.

Deposited during the Triassic era, the Montney is composed of sandstones and dolomites along its eastern margin and siltstones to the west. It is over 300 meters thick in the west and thins in an easterly direction. Its depth ranges from 700 to 3,500 meters.

Oil and natural gas were first discovered in the Montney in the early 1960s. With the advent of new drilling and completion technologies beginning in 2005, the Montney has steadily grown to become Canada’s most prolific natural gas resource. It is estimated that it represents over 60 percent of Canada’s natural gas production, and will be the key resource for liquefied natural gas (LNG) exports to help reduce coal demand in the rest of the world.

A federal and provincial resource assessment published in 2013 indicated the Montney is expected to contain 450 trillion feet of marketable natural gas, 14.5 billion barrels of natural gas liquids and 1.2 billion barrels of marketable oil. The study concluded that this represented over 145 years of Canada’s natural gas needs.

Montney’s advantage

The rich resource of the formation offers an opportunity to extract clean natural gas for Canada’s use and for export to Asian natural gas markets through new LNG terminals opening as early as May 2025.

While Canada is moving to a green economy, it still has considerable needs for certain fossil fuels. Natural gas is the most common energy used for heating the residential sector, with 6 million homes using it for home and water heating. In total, 36 percent of Canada’s energy demands are met by the use of natural gas.

Elsewhere, in Europe and Asia, demand for natural gas continues as these jurisdictions seek diverse and politically stable sources of energy. In 2022, Russia reduced its supply of gas to many of its export partners, causing a spike in prices. In 2022, there were concerns of a European shortage for 2023 of 30 billion cubic meters.

Gas from Montney has advantages of being from a stable and highly regulated region. Canada and its provinces have strict environmental regulations to help protect land, habitats and peoples.

Land reclamation is required by law in Canada. The Montney Formation already has a strong legacy of positive remediation efforts after oil and gas drilling. As well, many projects in this region have signed agreements with local Indigenous peoples.

Activity in the region

Montney hosts some established and emerging explorers and producers. Coelacanth Energy (TSXV:CEI) owns approximately 150 net sections in the Two Rivers natural gas region, boasting 1.53 million barrels of oil equivalent (boe) in proved and probable reserves per well in its Two Rivers East area.

The company recently commenced a four well drilling program at Two Rivers East, and has reported three of its wells tested at a per-well average of 1,338 boe per day. One of Coelacanth’s value propositions is its strategic geographical location surrounded by major producers. The company is fully permitted and has embarked on a $80 million infrastructure program that will enable its transition from explorer to producer.

Larger companies working at the formation include Tourmaline Oil (TSX:TOU,OTC Pink:TRMLF), Canada’s largest natural gas producer, generating approximately 260,000 boe per day from NEBC Montney. Another producer is ARC Resources (TSX:ARX,OTC Pink:AETUF), which generates 350,000 boe per day in the region. The company controls over a million acres at six sites on the formation.

Petronas Canada, owned by Petronas Global (NASDAQ:PNAGF) has a number of joint ventures and, through these partnerships, owns more than 800,000 gross acres of mineral rights at the Montney Formation. It has worked with partners to drill over 750 wells and has 4,800 wells planned over the next 45 years.

Smaller outfits working in the area include Birchcliff Energy (TSX:BIR,OTC Pink:BIREF), which has been ramping up production in 2024 at its Montney/Doig resource play, and Crew Energy, which was recently acquired by Tourmaline for nearly $1.3 billion.

Investor takeaway

The Montney Formation is a key resource for Canada today and in the coming years as part of a gradual move away from fossil fuel reliance, domestically and abroad.

The region is already a leader in sustainable, responsible development, making it an appealing target for investors seeking projects with lower environmental and social risk.

This vast geological formation has ample resources for decades of coming development. Large and junior companies are participating in discoveries, offering investors considerable choice in the region.

This INNSpired article is sponsored by Coelacanth Energy. (TSXV:CEI). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Coelacanth Energy in order to help investors learn more about the company. Coelacanth Energy is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Coelacanth Energy and seek advice from a qualified investment advisor.