Canadian Natural Eyes Peace River Gas Deal With Tourmaline

Canadian Natural Resources Limited CNQ, Canada’s largest energy producer, is reportedly in talks to acquire a major natural gas portfolio from Tourmaline Oil Corp. TRMLF in Alberta’s Peace River region. The potential transaction, estimated to be worth about $1 billion, would further strengthen Canadian Natural’s already sizable presence in Alberta’s gas market. The company filed paperwork with the federal Competition Bureau on Dec. 30, signaling that it is seeking preliminary regulatory feedback before formally announcing any deal.

While neither Canadian Natural nor Tourmaline has commented on the regulatory filing, sources say the talks center on Tourmaline’s Peace River assets, which were put up for sale in November. Regulatory approval is required due to the scale of the transaction.

Strategic Importance of the Peace River Assets

Tourmaline’s Peace River operations are extensive, comprising 2,428 horizontal wells, 34 gas plants and about 15,500 kilometers of pipelines. Canadian Natural already owns gas wells and infrastructure in the area, making the assets a strategic fit with its existing Alberta network.

Canadian Natural, currently carrying a Zacks Rank #3 (Hold), has steadily grown into one of the country’s largest natural gas producers through a series of acquisitions. Natural gas is also critical to its oil sands operations, with about 32% of its gas production used internally in refineries. Roughly 33% is exported, with the remainder sold into domestic markets. In a recent investor presentation, the company highlighted how improved drilling technology and its pipeline network create significant opportunities to grow liquids-rich natural gas production.

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Tourmaline Considers Asset Sale Deal to Fuel Montney Expansion

Tourmaline is selling the Peace River assets to fund expansion in northeastern British Columbia’s Montney region. The Montney is considered one of North America’s most prolific gas plays, offering an estimated 45 years of drilling inventory at current activity levels. Tourmaline is also pursuing one of the largest expansion projects in the Western Canadian Sedimentary Basin and is targeting total production of 850,000 barrels a day by the early 2030s. The sale is also expected to lower Tourmaline’s operating costs by around 7% this year.

Tourmaline’s interest in the Montney has been rising, supported by record Canadian gas production — averaging 18.3 billion cubic feet a day in 2024 — and the launch of the LNG Canada project led by Shell plc SHEL. The project led by Shell has an export terminal in Kitimat, British Columbia, which began production in June 2025. The LNG Canada project is a joint venture comprising Shell (40%), Malaysia’s Petronas (25%), Mitsubishi Corporation (15%), PetroChina (15%) and Korea Gas Corporation (5%).

Although ATB forecasts a slowdown in Canadian oil and gas M&A activity in 2026, it notes that well-positioned assets, particularly in the Montney, continue to command strong valuations.

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This article originally published on Zacks Investment Research (zacks.com).

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