good questions. From somebody who knows even less: Where does Leucrotta (LXE) fit in all of this ? It seems to be a laggard. Comments from Haywood:
Leucrotta Exploration (LXE-V, Buy, $1.25 Tgt, $0.88 Cl)
Ve+ from initial agreement between BC and BRFN on O&G permits
Event. Yesterday, an initial agreement was reached between the province of BC and the Blueberry River First Nations that enables the bulk of oil and gas projects which were permitted or authorized and where activities have not yet started to proceed. We always felt there likely would be some form of settlement and the initial agreement follows a BC Supreme Court ruling this summer which issued a declaration prohibiting the BC government from issuing development permits in Northeast BC. This was not just an oil and gas issue. It also impacted forestry and hydro, but it was a ruling that impacted virtually every Montney player in NEBC, including LXE (see map below).
The initial agreement is the first step in responding to the BC Supreme Court decision and includes $65MM in funding to support restoration work, activities that protect the BRFN cultural way of life and create jobs for Nation members. Earlier, the Blueberry stated it was not against industrial development, but rather seeks to ensure industry progresses in a responsible way to the benefit of all parties. This is just a first step and the province and the Blueberry are now working to finalize an interim approach for reviewing new natural resource activities, ahead of working towards a longer-term solution to protect Treaty 8 rights, which will likely involve modifying how resource development is authorized in the area (i.e. more collaboration/consultation with BRFN).
We view this as a positive as the original ruling created some regulatory uncertainty in the region (and LXE) which held back the stock from fully participating in the recent commodity rally. With an initial agreement reached we expect some of that regulatory noise to dissipate and yesterday’s announcement is seen as favourable to our outlook.
Upcoming catalysts. In July/21, LXE commenced drilling operations on its 4-well pad (3 LM + 1 Basal Montney) at Mica with completion operations scheduled in late 3Q/early 4Q and an on-stream date in mid 4Q21. Management has pointed towards IP30 day rates in late November or early December, and where initial results should show a step change in well productivity on the back of increased completion intensity (the Mica pad will be drilled with a lateral length of ~2,400 m and ~130 frac stages which represents a material increase from delineation wells that were drilled at 1,500 m and 28-41 frac stages). We continue to see LXE as an attractive emerging Montney oil growth story with visible near-term catalysts that could drive the stock higher on execution.