Birchcliff Energy Ltd

Introduction

Birchcliff Energy Ltd. is a stock-listed and profit-oriented public company based in Calgary, Alberta, Canada, that acts as an intermediate oil and gas company. The company’s main field of business is the exploration and production of natural gas, light oils, and natural gas liquids. Birchcliff’s operations are limited to the Peace River Arch in Alberta, which is the most desired natural gas and weak oil drill zone in North America. The main focus of Birchcliff Energy Ltd. is the development of the Montney/Doig resource play. At the same time, it also still has a high working interest in undeveloped land to control the infrastructure in the operational areas (“Birchcliff Energy,” n.d.). The primary sector of customers for Birchcliff Energy Ltd. is the energy corporate industry that uses natural gas and light oil. The company’s products are vital. The company is primarily engaged in business trade in Alberta, Canada; the destinations of its products, however, could vary depending on the distribution and sales. The company’s products are critical to energy production, and they supply different sectors and residential use. The distribution and sales of its products are probably under the influence of market demand, regulatory policies, and logistics.

Industry Analysis

Birchcliff Energy Ltd. operates in the oil and gas industry, specifically in the exploration and production sector (“BIRCHCLIFF ENERGY Financial Statements – TSX: The difficulty in estimating microfinance return on investment demonstrates the intangibility or immeasurable returns of microfinance programs (Sen & Thurman, n.d.). This sector comprises the search for hydrocarbon deposits, the drilling of exploratory wells, and the drilling and operation of wells that recover the crude oil or raw natural gas and bring it to the surface.

The major competitors of Birchcliff Energy Ltd. are Tamaska Oil and Gas, Altima Resources, Matador Resources Company, and Strikewell Energy (GlobalData Plc, 2021). These companies are also involved in the exploration, development, and production of natural gas, light oil, and natural gas liquids.

The economic projections of the oil and gas industry depend on some factors, including world oil and gas prices, regulatory policies, and technological trends. Earned record profits in 2022 and having plenty of cash flow for their programs despite geopolitical and macroeconomic uncertainties remained the trend within the oil and gas industry. It is foreseeable that the sector will have a robust beginning in 2024 due to its healthy financial position and high oil prices (Chronis, Hardin & Mittal, 2023). For example, the global upstream industry is expected to keep its $580 billion hydrocarbon investment level in 2023 and generate more than $800 billion in free cash flows in 2024.

Some of the external factors that affect the industry include regulatory changes, technological developments, economic factors, social and cultural trends, and environmental and climate concerns. Climate change, as well as technology, are shaping almost every sector across the world, such as the oil and gas industry. The lobby for sustainability is moving the oil and gas industry toward a fundamental change. Moreover, oil exploration and drilling may interfere with land and marine systems. The implementation of technology in the exploration, production, and transportation of oil, as well as the enforcement of laws and regulations aimed at safety and environmental protection, helps to avoid and reduce the negative effects on the environment.

Marketing Mix of Birchcliff Energy Ltd.

Operations:

Birchcliff Energy Ltd. is a public intermediate oil and gas company based in Calgary, Alberta. It is a resource company that explores, develops, and produces natural gas, light oil, and natural gas liquids. Lexicon Energy consolidates its operations in Peace River Arch of Alberta, which is regarded by management as one of the best gas and oil exploration territories in North America (“Corporate Overview | Birchcliff Energy,” n.d.). In 2022, Birchcliff drilled 44 horizontal wells (44.0 net) and produced 39 wells (39.0 net). These wells were drilled on multi-well pads, thus pushing Birchcliff to reduce the per-well costs and minimize the environmental footprint.

Pricing:

The state of the market impacts Birchcliff Energy Ltd.’s pricing strategy in the energy sector. The dynamics of global oil and gas prices, supply and demand, and regulatory policies play critical roles in determining product prices. For example, in 2024, Birchcliff changed its capital budget plans to bring substantial production online towards the end of the year when commodity prices were forecasted to be much higher.

Place:

Birchcliff’s operations are focused on the Montney/Doig Resource Play in Alberta.

Specifically, the company operates in the Peace River Arch area, known for its desirability as a natural gas and light oil drilling region in North America.

Promotion:

Birchcliff Energy Ltd. communicates its commitment to responsible energy production as part of its promotion strategies. The company regularly announces its financial and operational results, which serves as a form of promotion. For example, in January 2024, Birchcliff announced its 2024 budget and guidance, along with its updated five-year outlook.

Ethics & Corporate Social Responsibility.

Environmental Commitment: Birchcliff Energy Ltd. is among the lowest emitters of greenhouse gases (GHG) in Canada’s oil and natural gas industry. The company continuously decreases its GHG emissions intensity throughout the business processes, for instance, through its Methane Reduction and Retrofit Compliance Plan, Fugitive Emissions Management Program, carbon sequestration projects, and focus on innovation that enables the lowering of emissions in operation stages.

Social Responsibility: Community and Stakeholder engagement is critical in the smooth running of Birchcliff Energy Ltd.’s projects as it has a close relationship with the community. The company has a team of experts who work with local stakeholders in order to understand their values and priorities as well as to solve any problems that may appear during its field operations (“ESG | Birchcliff Energy,” n.d.). Birchcliff understands that communities are critical to the company’s flourishing and therefore looks for chances to be involved in giving back. It assists the communities, enterprises, and educational programs of the Indigenous communities that belong to the areas where it operates. Annually, the company is involved in many of the social supports in the areas adjacent to its field operations and Calgary.

Governance: The company Birchcliff Energy Ltd. aims to keep a high standard of corporate governance practices. It holds this view that proper governance increases a company’s performance and benefits all stakeholders. The Birchcliff’s Board of Directors is responsible for the management of the company’s business and affairs, with a view to pursuing the best interests of the company. Birchcliff Energy Ltd. exhibits corporate social responsibility by implementing various ESG initiatives. The company’s endeavors to take care of the environment, social issues, and governance are proof of its involvement in ethical business practices and corporate social responsibility.

Swot analysis

In conclusion, Birchcliff Energy Ltd. is a Calgary-based intermediate oil and gas firm that concentrates on the Montney/ Doig Resource Play.

The company has a significant reserve base, operational entities, and a strategic orientation towards the busy area. Nevertheless, this difficulty includes mounting trade receivables. The global demand for oil is a chance for the company, but climate change policies are emerging as a severe risk.

The firm is part of an unpredictable sector affected by international oil and gas prices, governmental requirements, and technological improvements. Due to the uncertainties in global and macroeconomic policies, the oil and gas industry made record profits in 2022. In 2024, the industry is predicted to have a successful beginning as a result of its sound financial position and elevated oil prices, which are the contributing factors to its growth. The global upstream industry will continue to invest at a level of around US$580 billion in hydrocarbons in 2023 and produce a cash flow of about US$800 billion in 2024. Taking into account the company’s strengths, the opportunities in the industry, and the company’s commitment to ESG initiatives, Birchcliff Energy Ltd. is a solid business venture.

References

Birchcliff Energy. (n.d.). Retrieved February 25, 2024, from www.birchcliffenergy.com website: https://www.birchcliffenergy.com/

BIRCHCLIFF ENERGY Financial Statements – TSX: BIR. (n.d.). Retrieved February 25, 2024, from TradingView website: https://www.tradingview.com/symbols/TSX-BIR/financials-overview/

Birchcliff Energy Ltd. Announces Excellent Q3 2022 Results, Including Record Q3 Adjusted Funds Flow and Free Funds Flow. (2022, November 9). Retrieved February 25, 2024, from Yahoo Finance website: https://finance.yahoo.com/news/birchcliff-energy-ltd-announces-excellent-210000987.html

Challenge Validation. (2024). Retrieved February 25, 2024, from Dnb.com website: https://www.dnb.com/business-directory/company-profiles.birchcliff_energy_ltd.538da577dd22a484bc369182e7615337.html

Chronis, A., Hardin, K., & Mittal, A. (2023). 2024 oil and gas industry outlook. Retrieved from Deloitte Insights website: https://www2.deloitte.com/us/en/insights/industry/oil-and-gas/oil-and-gas-industry-outlook.html

Corporate Overview | Birchcliff Energy. (n.d.). Retrieved February 25, 2024, from www.birchcliffenergy.com website: https://www.birchcliffenergy.com/about-us/corporate-overview

ESG | Birchcliff Energy. (n.d.). Retrieved February 25, 2024, from www.birchcliffenergy.com website: https://www.birchcliffenergy.com/esg/

GlobalData Plc. (2021). Birchcliff Energy LtdSWOT Analysis. Retrieved February 25, 2024, from Globaldata.com website: https://www.globaldata.com/company-profile/birchcliff-energy-ltd/swot-analysis/

Mayor, R., & Moritsch, S. (2022, October 3). Top Risks Facing the Oil and Gas Industry in 2022 – and What You Can Do About It – KPMG Global. Retrieved from KPMG website: https://kpmg.com/xx/en/home/insights/2022/04/top-risks-facing-the-oil-and-gas-industry-in-2022.html

Statista. (2023). Global crude oil demand 2023. Retrieved from Statista website: https://www.statista.com/statistics/271823/global-crude-oil-demand/