T1 Energy shares surge on new oilfield deal

Shares of T1 Energy surged on Tuesday after the Canadian oil and gas producer announced a strategic acquisition in Alberta’s Duvernay shale play, boosting investor confidence in the company’s growth prospects.

T1 Energy said it had agreed to acquire additional acreage in the Duvernay formation, a liquids-rich shale play in central Alberta known for its high-quality condensate and natural gas production. The deal, valued at C$120 million, expands the company’s footprint in one of Canada’s most prolific unconventional resource basins. Financial terms were not disclosed.

The acquisition follows T1 Energy’s recent drilling results, which showed strong productivity in the Duvernay, with average initial production rates exceeding 1,200 barrels of oil equivalent per day. Analysts at National Bank Financial noted that the deal aligns with the company’s strategy to consolidate acreage in core areas while maintaining capital discipline.

T1 Energy’s stock rose as much as 8% in early trading on the TSX Venture Exchange, outpacing broader energy sector gains. The company’s shares have climbed roughly 25% over the past month, reflecting renewed optimism in the Canadian energy sector amid stable oil prices and improving drilling economics.

The deal comes as T1 Energy seeks to strengthen its balance sheet and fund future growth through acquisitions rather than equity issuance. The company has not provided updated production guidance following the acquisition but is expected to release full-year 2024 guidance in its next earnings report, scheduled for late May.

T1 Energy operates primarily in Alberta’s Duvernay and Montney formations, two of Canada’s most significant unconventional resource plays. The company’s focus on liquids-rich natural gas has positioned it as a key player in supplying condensate, a critical diluent for heavy oil production in the oil sands.