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Updated on Thursday, April 27, 2017
Ballard Power System making significant strides into China — April 7, 2017
A Canadian company based in Burnaby, B.C. , Ballard Power System, has been very active in securing a strong foothold in China. During the past year it has signed a series of deals with Chinese various companies.
Yesterday, the Ballard announced that it has signed an agreement with another Chinese company, Zhongshan Broad-Ocean Motor Co. Under the deal, Broad-Ocean will manufacture fuel cell modules in three strategic regions in China.
Randy MacEwen, Ballard President and CEO commented, "This transaction is an exciting step forward in our response to the converging macro trends in China, including large-scale urbanization, continued build-out of mass urban transportation, degrading air quality and a mandate to address climate change."
Ballard Power Systems Inc. is a Canadian developer and manufacturer of proton exchange membrane fuel cell products. Company has been advancing fuel cell technology solutions including engineering services. This technology is being employed into powering public transportation buses and supplying compact electric generating power units.
National Energy Board announces new whistle blower policy — April 4, 2017
The National Energy Board has in place a new reporting mechanism that will change how the public discloses allegations of company non-compliances.
Starting today ‘ClearView Connects‘, a confidential reporting service, will begin accepting anonymous disclosures on the NEB's behalf. All information reported will be collected, stored, secured and managed in a secure manner.
Disclosures that could reveal the identity of a tipster will be isolated from other NEB databases, thus protecting the information along with the identity of those who submitted them.
Cenovus Energy acquires 50% in FCCL oil sands venture — March 30, 2017
Cenovus Energy announced that it has acquired 50% of jointly owned oil sands venture operated by Cenovus. Company has also purchased the majority of ConocoPhillips' Deep Basin conventional natural gas assets in Alberta and British Columbia. The acquisition is valued at approximately $13.3 billion.
Cenovus expects that the acquired assets will boost 2017 production by approximately 298,000 barrels of oil equivalent per day. The acquisition is expected to result in an 18% increase in 2018 adjusted funds flow per share compared with Cenovus's original 2018 forecast.
The transaction is expected to close in the second quarter of 2017, subject to customary conditions, including the receipt of necessary regulatory approvals, and has an effective date of January 1, 2017. Concurrent with the acquisition, Cenovus has launched a bought-deal offering of common shares for expected gross proceeds of approximately $3 billion.
Bright outlook for natural gas producers
Natural gas prices have simply stunk during the past five years but recovering is now apparent and natural gas prices are looking much more promising.
Oversupplies of natural gas inventories have dropped below the five year average and global changes are occurring. Natural gas demand is rising. Relying on domestic demand will no longer be the single governing factor. The next decade looks very favorable. Global markets are here and demand is about to burst open.
During the past decade, significant discoveries of shale gas were made. In the US, these discoveries developed quicker than the demand was able to sustain. Natural gas prices plummeted to record lows in the past several years.
There has been a significant turnaround in the natural gas markets in the past six months, as US stockpiles have waned and are now replenished at a much slower pace than a year ago. As a result, natural gas prices bottomed last winter and by mid-summer began to recover.
Former Obama administration tightened environmental laws on carbon emissions. This spurred the conversion from dirty fuels like coal to clean burning natural gas. In particular, most US coal fired electric generating plants have been phased out and others will be replaced in the coming years with more efficient and lesser carbon emitting gas fired plants. Natural gas demand on the continent may increase quickly.
Here in Canada, we rely mostly on exporting our natural gas supplies. Exports to our southern neighbor have all but vanished. At one time, US imported most of our natural gas supplies. Today we are looking at exporting natural gas in the liquid form (LNG). Our single obstacle is the lack of infrastructure but it is in the developmental stages and is being quickly constructed. Two LNG projects are under construction in British Columbia and one is being built on the east coast near Stain John, New Brunswick. Several other smaller LNG plants are being planned for Nova Scotia.
Interest in developing natural gas reserves in the provinces of Ontario, Quebec, New Brunswick, Nova Scotia and Price Edward Island is starting to heat up. Even the left leaning provincial Liberal government has eased restrictions on natural gas development in the eastern townships of Quebec. Natural gas companies are optimistic that fracking will soon be approved.
Alberta and British Columbia, the most prominent natural gas producers, have taken the lead. The Montney, Horn River Basin and lesser known discoveries have attained unprecedented development levels. According to COADC, rig utilization in British Columbia has been the highest in Canada during the past five years.
A study, commissioned by B.C. provincial government and released three years ago, estimates that the British Columbia has 2,933 trillion cubic feet of recoverable natural gas in the Horn River Basin and the Montney region. British Columbia’s natural gas reserves have surged to the highest level in Canada and if the study is accurate – one of the largest global natural gas reserves.
These new natural gas reserve estimates have tripled the previous evaluation in British Columbia. Alberta's shale reserves in the Montney have also risen in comparison to a decade ago.
British Columbia's provincial government claims that there is enough natural gas to be capable of developing a viable LNG export operations for 150 years and still being capable of meeting all domestic needs.
The start of 2017 has brought elevated optimism. According to COADC data, rig utilization in British Columbia and Alberta is climbing to record high levels of past decade. Interest is picking up pace in Horn River and the Montney region is continuing to be strong. Producers are preparing for big exports into the Pacific Rim.
T. Boone Pickens predicts that America’s transportation sector could be the next beneficiary if the industry follows through with a conversion to natural gas. The oil tycoon has spent much time in convincing the transportation industry of the merits to change fuels. Pickens believes that conversion to natural will occur despite a slow start. Truckers are now realizing the benefits of lower fuel costs and lower maintenance.
Low oil prices and political uncertainty has had implications on the natural gas industry. If oil prices had been higher, natural gas demand would have grown at a much faster pace. These factors stalled development of all natural gas reserves. Most oil and gas companies tightened their budgets in response to low energy prices and global uncertainty.
Natural gas drilling throughout North America slowed to a standstill from 2015 to 2016. Despite the short term doom, many natural gas producers knew that the oversupplies of natural gas would drop once US economy recovered and domestic demand picked up .
The return of colder weather this winter has brought further depletion of US working gas stockpiles; presently, stockpiles have fallen below the five year average. Slower development of US shale natural gas reserves has helped curb oversupplies. Should oil prices recover, rig availability may further hamper natural gas development in northeastern US and keep supplies of natural gas tight in that region.
Canadian natural gas stalwarts like Canadian Natural Resources, Devon Energy Corporation, EnCana and Penn West Exploration have witnessed budget restraints due to low energy prices. Stalwarts, such as EnCana, have laid-off significant numbers of their workers and proceeded in the same direction as Devon Energy and Penn West, the three have liquidated some of their most promising natural gas assets.
Other companies, who were more optimistic, budgeted accordingly and took advantage of the situation. Natural gas properties were attained at bargain prices. Canadian Natural Resources Limited is one that has taken over the lead. During the past two years, this company has drilled over 12,000 natural gas wells in western Canada.
While size of a company may help sustain it through the tough times, some smaller companies have made significant strides. Painted Pony Petroleum, who prior to the oil price downturn sold their valued oil properties, and turned their resources to acquire vast properties in northeastern British Columbia. This company has shown that sound management is the key to being successful.
Energy investors should be aware of the developments occurring globally. Political changes throughout the world may hasten change. Should crude oil prices stay low, rising natural gas prices may stall in the range of $3.00 to $3.50/MMBtu. Should oil prices rise, natural gas prices may spike at $5/MMBtu or even high should demand rise.
There is growing optimism amongst natural gas producers. Asian rim markets are looking very good and may be the key to a rise in natural gas exports. China has shown a strong interest in converting from coal to natural gas. The Chinese government has realized that it can no longer set aside the problems created by carbon emissions and pollution.
Vigilant natural gas producers have realized that China alone could change the direction of natural gas demand and supply. Natural gas industry is truly entering a new and golden era.
By Jim Klemchuk
EnCana on track in developing its Montney condensate assets — April 21, 2017
President and CEO of EnCana, Doug Suttles said that his company is on track to develop its Montney assets and expects that full production will begin in two years.
Suttles went on to state the he believes that the Montney assets are world class and there is an opportunity for a significant upside.
EnCana has drilled four wells in the Pipestone area. Initial 60 day tests show very positive results. Production during the testing period show over 100,000 barrels of high margin condensate in less than 100 days.
EnCana’s initial production from the Montney is expected to begin in the fourth quarter of this year The company is aiming at producing 70,000 of high margins condensate by 2019.
EnCana has hedged about 475 MMcf/d of AECO basis for the 2018 to 2020 period at approximately NYMEX less $0.87 per thousand cubic feet (Mcf), a level strongly supportive of the company's development plans in Western Canada.
Our most recent ‘Shouts & Toots’ from the Oil Patch — April 27, 2017
AltaGas Ltd. ( ALA:TSX) announced on April 27th the final director election results from its 2017 Annual General Meeting of Shareholders held April 26, 2017. All nominees recommended by management for election were elected for a term ending at the next annual meeting. Results for all agenda items will be available on SEDAR (www.sedar.com) soon. For more information visit: www.altagas.ca
AltaGas is an energy infrastructure company with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources. Company is headquartered in Calgary. Altagas has a market cap of $5.2 billion and approximately 169 million shares outstanding.
Ballard Power Systems Inc. (BLDP:TSX) announced on April 27th that Randy MacEwen, President & Chief Executive Officer will attend the Oppenheimer Emerging Growth Conference at the InterContinental Barclay Hotel in New York City on Tuesday, May 16th. Throughout the day, Mr. MacEwen will be available for 1-on-1 meetings with interested investors.
Ballard Power Systems is a Burnaby, BC headquartered company engaged in the design, development, manufacture, sale and service of proton exchange membrane fuel cell products for a variety of applications, focusing on commercial stage and development stage markets. Ballard has a market cap of $699 million and approximately 175 million shares outstanding.
CNOOC Limited (CNU:TSX) announced on April 27th its key operational statistics for the first quarter of 2017. For the first quarter of the year, the Company achieved total net production of 119.1 million barrels of oil equivalent, representing a decrease of 4.2% year-on-year, mainly due to the natural decline of the producing oil and gas fields.
To date, for the projects planned to commence production this year, Penglai 19-9 oil field comprehensive adjustment project and the Enping 23-1 oil fields have already come on stream, and the other projects are moving smoothly.
Mr. Yuan Guangyu, CEO of the Company, said, "Despite the continued challenging market conditions, the Company has maintained smooth production and operations during the first quarter of the year. We will continue to enhance quality and efficiency, pursue quality growth, and increase profitability-oriented production volume."
CNOOC Limited is a Hong Kong based Chinese oil and gas company. CNOOC has a market cap of $1.6 billion and approximately 10.0 million shares outstanding.
Crescent Point Energy Corp. (CPG:TSX) announced on April 27th its operating and financial results for the quarter ended March 31, 2017. Funds flow from operations totaled $427.1 million, or $0.78 per share diluted. Company had a net income of $119.4 million.
During first quarter, the Company acquired approximately 8,500 net acres contiguous to its core assets in Williams County, North Dakota for a total cash consideration of US$100.0 million. The assets have a high working interest of 76 percent and are primarily undeveloped with approximately 50 net high-quality internally identified drilling locations.
Crescent Point drilled 106 (103.6 net) oil wells during first quarter in southwest Saskatchewan. The Company's development strategy focused on low-risk, high-return infill development in the Shaunavon resource play and the continued testing of its extended reach horizontal program in the Viking resource play. Crescent Point is encouraged by the results of its extended reach program, which provide the potential for additional drilling locations and improved play economics.
Company's unaudited financial statements and management's discussion and analysis for the quarter ended March 31, 2017, are available on www.sedar.com, and on Crescent Point's website at www.crescentpointenergy.com.
Crescent Point Energy is a Calgary based oil and gas company with operations in western Canada and Williston Basin. Company has a market cap of $7.0 billion and approximately 545 million shares outstanding.
DIVERGENT Energy Services Corp. (DVG:TSX) announced on April 27th an operations update. The Linear Electromagnetic Submersible Pump installed on March 24, 2017 has been running continuously since start up and has achieved the major milestone of one month of run time. The pump continues to operate consistently with production rates and operating parameters having little variance from day to day.
Divergent's submersible pumping business in Gillette, Wyoming continues to see solid demand for services and is well positioned to grow with the improving markets in both Colorado and Wyoming. The business also continues to expand the geographic regions it services, with an increase in activity expected from new drilling activity in Colorado.
The Linear Pump eliminates the ongoing cost of rod and tubing wear in oil wells, which can help oil and gas producers drive down operating costs, enhance field efficiencies and improve operations. In the current weak commodity price environment, such cost savings can represent a significant benefit to producers seeking to maximize netbacks and control operating and capital costs.
DIVERGENT Energy Services Corp. is a Calgary based company which provides an array of artificial lift products and services that are used in the oil and gas industry, including its revolutionary Linear Electric Submersible Pump. Company has a market cap of $18 million and approximately 100 million shares outstanding.
Leucrotta Exploration Inc. (LXE:TSX) announced non April 27th its financial and operating results for the three months and year ended December 31, 2016. Company had $2.3 million of revenue and experienced a loss of $(1.7) million.
In Q4 2016 and early Q1 2017, Leucrotta completed its infrastructure project to tie-in four previously drilled delineation wells and has drilled three additional step-out/delineation wells that materially extend the productive boundaries of the Company's Lower Montney Turbidite Light Oil Resource Play.
Leucrotta Exploration Inc. is a Calgary based Montney focused producer with lands located in the Doe/Mica area in northeast British Columbia. Leucrotta. Company has a market cap of $5.7 million and approximately 165 million shares outstanding.
Manitok Energy Inc. (MEI:TSXV) announced on April 27th that it has completed an acquisition from an Alberta based oil and gas company to acquire a 100% working interest in approximately 1.1 Mmcf/d (175 boe/d) of natural gas production, based on field estimates, in the Carseland, Alberta area.
The acquisition includes 13 sections of developed P&NG rights to the base of the Belly River formation complete with full 3D seismic coverage, and approximately 170 kilometers of related gathering systems extending over 3 townships. Corporation paid a cash consideration of $75,000 and assumed discounted abandonment liabilities of approximately $400,000 (10% discount rate) for the acquisition.
Manitok is a Calgary based oil and gas exploration and development company focused on Lithic Glauconitic light oil in southeast Alberta and Cardium light oil in west central Alberta. Company has a market cap of $35.5 million and approximately 263 million shares outstanding.
Pan Orient Energy Corp. (POE:TSX) announced on April 27th an operations update. The operator of the East Jabung Production Sharing Contract indicated to the company on April 25 that due to delays related to unusually heavy monsoon rainfall, the estimated commencement of drilling of the AYU-1X exploration well has been delayed from late April to late Q2 2017. This delay has been due to the implementation of extraordinary measures that were required to mitigate the extremely wet conditions caused by continuous rainfall with some days recording as much as 7.6 centimeters of precipitation.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada. Company has a market cap of $80 million and approximately 55 million shares outstanding.
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Did you know?
.Refining technologies have made it possible to produce over 21 gallons of gasoline from a 42 gallon barrel of crude oil. It’s a remarkable advance over the industry's early days when a barrel of oil yielded only 11 gallons of gasoline.
prices compiled and updated on a regular basis by Canadian Insight
$ / liter
WCS / WTI
Price Spread -$10.35
April 27, 2017
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