#Canada #Strathcona Resources #Calgary, Alberta #Vawn Thermal #thermal project

Strathcona Resources Completes Vawn Thermal Acquisition

On December 1, 2025, Strathcona Resources Ltd. proudly announced the successful closing of its previously discussed acquisition of the Vawn thermal project alongside several other undeveloped thermal lands. This strategic move signifies an expansive enhancement to Strathcona's operational capabilities in the thermal oil sector.

Details of the Acquisition

The overall transaction comprises a total consideration of $75 million in cash, alongside a contingent amount that could reach an additional $75 million. This contingent payment is structured with a unique formula: for each dollar per barrel that the Western Canada Select (WCS) index exceeds C$70 in any quarter over the next 14 quarters, Strathcona will pay $1 million, up to the capped total.

Vawn Project Overview

The Vawn thermal project has reliably produced an average of approximately 5,000 barrels per day (bbl/d) of heavy oil, with a nameplate capacity of 10,000 bbl/d. Strathcona anticipates that there are about 48 million barrels of recoverable resources available in both the Lloydminster and Waseca formations, which equates to an anticipated resource life of 26 years, based on current production rates.

Notably, the field's performance seems promising, showing a third-quarter operating netback of $43.87 per barrel, which closely mirrors Strathcona's existing thermal operations.

The acquisition also positions Strathcona favorably, as Vawn sits adjacent to its existing Edam project, thereby allowing for easier integration. Plans are underway to connect both facilities, anticipated to yield $10 million in annual cost synergies and enhanced marketing options.

Development of Undeveloped Lands

Alongside Vawn, Strathcona has also secured approximately 43 net sections of undeveloped land across Glenbogie, Plover Lake, and Lindbergh. Each of these regions is strategically placed to offset Strathcona's existing operations, thus unlocking further potential.

• - In Glenbogie, an additional 16 net sections are expected to escalate the estimated initial oil-in-place to approximately 370 million barrels, allowing for multi-phased development aimed at reaching 35,000 bbl/d.
• - For Plover Lake, the acquisition includes 22 net sections, which will intensify the area’s oil reserves to around 500 million barrels, expected to contribute an additional 13,000 bbl/d.
• - Lastly, the Lindbergh asset with 5 net sections is ideally positioned for future development, capitalizing on existing facilities.

In summary, total production capacity augmentation based on these lands is estimated at an additional 35,000 bbl/d compared to earlier forecasts.

Updated Future Projections

Following this acquisition, Strathcona has increased its 2026 production forecast to between 120,000 to 130,000 bbl/d, up from a prior estimate of 115,000 to 125,000 bbl/d. The projected capital budget remains stable at $1 billion.

This acquisition reinforces Strathcona's five-year plan, which proposes consistent yearly production guidance increases of 5,000 bbl/d from 2027 to 2031, promising to achieve a total production culmination of 200,000 bbl/d by mid-2031. Strathcona anticipates soaring toward 300,000 bbl/d by 2035, maintaining an impressive growth rate of 10% CAGR.

Strathcona aims to remain adaptable in its capital allocation and is committed to reassessing its operations based on risk-adjusted returns and market dynamics. The clear strategic vision places Strathcona Resources as a highly competitive player in the thermal oil sector moving forward into this new chapter.