Imagine this transformation: once-neglected Permian Basin wells, corroded and weather-beaten, now revitalized into peak-efficiency production hubs.
It’s what makes Wedgemount Resources Corp (CSE:WDGY, OTCQB:WDGRF) and its approach to the Permian unique, centred around proprietary chemical treatments and innovative recompletion initiatives designed to breathe new life into neglected wells. By doing so, Wedgemount not only amplifies production but also keeps costs in check.
Wedgemount’s assets in Runnels, Taylor, and Coleman Counties in the Eastern Shelf of the Permian Basin offer a wealth of untapped potential. The Eastern Shelf is a key but somewhat lesser-known region in West Texas, contributing to the area's status as a top oil and gas producer. Unlike the deeper, more prolific Midland and Delaware Shale Basins, the Eastern Shelf is characterized by shallower sandstone and limestone formations that were formed millions of years ago in a marine environment.
Stretching across counties like Coleman and Runnels, this subregion has been a steady source of hydrocarbon production since the early 20th century. While it doesn't boast the same output as other parts of the Permian, ongoing developments in drilling technology, including horizontal drilling, are continuing to unlock its potential.
CEO Mark Vanry and his team are positioning Wedgemount as a small yet highly promising player in one of the world’s richest oil-producing regions. The company is affectionately referred to as “Wedgie” around its corporate headquarters due to its ticker symbol rhyming with a favorite schoolyard prank. “We take our work very seriously, we don't take ourselves too seriously,” Vanry told Proactive.
Breathing new life into the Permian
While its humor may be lighthearted, the focus on execution is serious. Rather than being an exploration play, Wedgemount’s approach focuses on revitalizing underperforming oil wells. Some of these wells, 16 years old and long neglected, represent untapped potential. Vanry compares them to a high-performance sports car that hasn’t been tuned up in years. By applying advanced maintenance techniques, including chemical treatments, Wedgemount aims to restore and optimize production to these wells.
“These are well-defined reservoirs with well-designed wells, and nine times out of 10, we have a very good idea of what to expect,” Vanry said. “Once we return non-producing wells to production and enhance existing producers, we still have a lot of drilling inventory and room to grow. But right now, for shareholders, the best return on invested capital comes from chemical treatments and workovers. It’s not glamorous work, but it’s incredibly effective and economically sound.”
One of Wedgemount’s key acquisitions, the Huggy asset, perfectly exemplifies this strategy. The company was able to acquire this package of conventional vertical wells for just $840,000—a bargain compared to the standard price of similar assets in the Permian, which typically range from $35,000 to $45,000 per flowing barrel. The Huggy acquisition not only complements Wedgemount’s existing assets but also significantly boosts the company’s size and production potential.
Huggy sits right across the street from Wedgemount’s existing TCS asset, making it an ideal operational fit, said Vanry.
Vanry’s bold and strategic moves reflect Wedgemount’s broader goals. The company is not just aiming for incremental growth but is setting its sights on substantial production increases. With an initial goal of 1,200 barrels of oil equivalent per day (BOE/d) in 12 months, Wedgemount expects to expand to 2,100 BOE/d within two years—assuming no new acquisitions or drilling.
“We have up to eight bypassed pay zones above where we’re currently producing that are hydrocarbon-bearing,” Vanry said. “This is similar to what happened in Alberta, where people ignored formations like the Clearwater, thinking they weren’t economically viable. Now, modern technology has made them one of the most profitable plays in North America. We’re in a similar position with our bypassed pay zones, and the growth potential is enormous.”
The Wedgemount formula
Vanry’s journey into oil and gas began in 1999. Despite lacking a formal geological or engineering background, his capital markets career deeply shaped his understanding and passion for the sector. Working with firms like Raymond James and Canaccord Genuity (TSX:CF, LSE:CF), Vanry honed his expertise in North American energy.
Neither a geologist nor an engineer, Vanry – born and raised in western Canada – still developed a passion for oil and gas. However, it wasn’t until a conversation with two geoscientists in 2020 that Vanry began contemplating Wedgemount’s current venture. His friends had approached him with an oil and gas opportunity in West Central Texas. Initially skeptical, Vanry’s due diligence eventually convinced him that this was a high-upside, low-risk investment with strong potential.
After several months of due diligence on the people, assets, and opportunity, Vanry felt it was a deal he couldn’t pass up, calling it the “highest upside, lowest risk deal I’d seen in 25 years in the oil and gas industry.”
One of the defining features of Wedgemount’s strategy is its focus on the Eastern Shelf, which offers significant promise for smaller, nimble operators like Wedgemount.
“Texas is so geologically rich; it's the second-largest basin on the planet, outside of Saudi Arabia,” Vanry explained.
“The Permian Basin is so big and so resource-rich that many opportunities slip through the cracks, especially at this stage in the cycle. The major players—everyone from Conoco to EOG, to Marathon, and other household names like Diamondback—need large-scale opportunities to make an impact. As a result, they're not focused on smaller assets, even if they are economically or geologically attractive with great upside."
Big returns in the Basin
This disconnect between larger companies and the smaller, more fragmented assets creates a rare chance for growth. Thanks to a deep understanding of the area’s geology and operations, along with strong relationships with local landowners, Wedgemount is poised to capitalize on these overlooked opportunities.
With an eye on strategy, Vanry believes the growth potential is “huge.”
“We have a great team, and I’m confident we’ll hit our goals. Our ultimate objective is to create long-term shareholder value, and we’re on track to do just that.”