Canadian Insight

Online oil and gas magazine keeping investors informed ...

Updated on Thursday, June 24, 2021

Canadian oilsands producers aim to achieve zero emissions — June 10, 2021

Canada’s largest oilsands producers are aiming to achieve net zero greenhouse emissions by 2050.

Canadian Natural Resources, Cenovus, Imperial Oil ltd., MEG Energy and Suncor Energy announced their ambitious plans to help meet Canada’s climate goals.

These companies have initiated a unique alliance and will work collectively with federal and Alberta governments to achieve net zero greenhouse gas emissions.

This paticular pathways vision is anchored by carbon captures and storage connected to a carbon sequestration hub. It will enable to multi-sector tie-ins for expanded emissions reductions.

This will enable to continue developing a very valuable resource, create jobs, develop a clean sector and contribute to Canada’s gross domestic product.

 

 

Pembina Pipeline buying out Inter Pipeline for $8.3 billion — June 1, 2021

Pembina Pipeline and Inter Pipeline have signed a deal to buy out Inter Pipeline for $8.3 billion in stock.  Inter Pipeline stockholders will receive half a share of Pembina  for each Inter Pipeline that they hold. The offer is worth $19.45 per Inter Pipeline share.

The Pembina deal has topped the offer made by Brookfield Infrastructure Partners which offered stock holders of Inter Pipeline $16.50 per share.

The boards of Pembina and Inter Pipeline have unanimously approved the deal. It still requires 2/3 stock holder approval by Inter Pipeline and majority vote by Pembina stock holders.

The deal is expected to close by the end of the fourth quarter this year.

 

 

Enbridge Line 5 in operation despite threats from state governor— May 13, 2021

The May 12, 2021 deadline for Enbridge to stop using Line 5 Pipeline has passed and it continues to operate.

Michigan Governor Gretchen Whitmer has threatened Enbridge that if it continue to use the pipeline the state of Michigan will garnish all operational profits for Line 5.

A statement from Enbridge reveals that the company has no intent to stop using Line 5 pipeline unless it is ordered by a federal court.

Line 5 supplies over half a million barrels of crude oil into northeastern states, Ontario and Quebec. The pipeline was built in 1953. It snakes around the Great Lakes and crosses under water at the Straits of Mackinac.

 

Canadian Railways stepping up crude  oil shipments into eastern Canada— May 5, 2021

Observations throughout western Canada point to an increased travel of railway crude oil tankers . One instance showed a CP train heading through central Saskatchewan with well over a hundred and fifty crude oil tankers heading east.

It is obvious that refineries in Sarnia, Ontario and points east are preparing for alternative sources of crude oil should the Enbridge Line 5 be shut down. State of Michigan Legislature has passed a law closing that line on May 12, 2021 due to safety reasons.

 

House of Commons Committee affirms importance of Line 5— April 19, 2021

An all-party Canadian House of Commons Committee has released a report stipulating the importance of the Enbridge Line 5.

The report states that governments on both of the sides of the border should resolve the dispute between the Michigan state and Enbridge.

The House of Commons Committee  held hearings with labor, business groups and labor unions. Talks also included Energy ministers of Alberta, Saskatchewan and Ontario. Several organizations provided written statements in support of Line 5.

Committee members and all participants unanimously agreed of the importance of Line 5. It’s not just another pipeline. It is the lifeline to Ontario, Quebec and northeastern points in US.

It is unfortunate that the federal governments of Canada and US are not at the forefront in resolving the dispute.

 

The clock is ticking on Enbridge Line 5 before it’s shutdown — March 31, 2021

In just a little over a month, on May 12, 2021, Enbridge Line 5 will be forced to close down by the state of Michigan.

On November 2019, Michigan Governor Gretchen Whitmer  will withdraw easement rights which had previously allowed Enbridge Line 5 to carry crude oil through that pipeline.

It appears that the governing Trudeau left leaning Administration has swept this under the rug and believes that this serious energy problem will solved with solar panels and wind mills.

This line is a very critical energy artery for the provinces of Ontario and Quebec. It delivers half of the crude oil required by refineries for the two provinces.

Ontario alone receives 540,000 barrels of crude oil for the refineries in Sarnia. These refineries supply 100% of all fuel needed by the Pearson Airport.

Should Enbridge Line 5 be closed it will require a miracle to fill the void.

Shutting down Enbridge Line 5 would require 2,000 semi truck units, or 800 rail cars of crude oil a day to keep refineries in eastern Canada in a normal day operation.

Closure of the refineries in Sarnia area alone would affect the employment of 5000 skilled labor jobs and  23,500 associated jobs.

 

Supreme Court Ruling on Canada’s carbon tax introduces very serious implications March 31, 2021

Last week’s  Supreme Court ruling that the federal government has the legal right to tax carbon emissions has very serious implications.

This ruling has made it legal for the federal government to encroach on provincial rights to tax and infringe on provincial jurisdiction to govern.

It is viewed by Western Canadians as another demonstration by the federal government to refuse to listen and alienate the west even further.

Some political pundits fear that this decision by the Supreme Court will help push Alberta and Saskatchewan to separation from Canada.

 

CP Railway announces takeover of Kansas City Southern  — March 23, 2021

Canadian Pacific Railway announced that it will proceed to takeover Kansas City Southern Railway. The proposed  deal is worth US $25 billion.

The resultant merger would make a railway network expanding from Canada into the US Gulf states and Mexico.

The merger could impact the crude by rail volumes and increase movement of Canadian crude oil into the Gulf coast refineries.

The cancellation of Keystone XL project has stopped expansion of crude oil sales into southern US and exports into the global marketplace.

The business combination of the two railways is expected to pass by US and Canadian regulators by second quarter of 2022.

 

Energy Information Administration predicts US will import more oil than it exports in 2021 &  2022—February 18, 2021

 Energy Information Administration reports that  US crude oil imports are expected to increase in 2021 and 2022. This is a reversal to 2020 when US was exporting more crude oil then it had imported.

EIA predicts that US will increase its crude oil imports from 2.7 million barrels per day in 2020 to 3.7 million barrels per day in 2021 and 4.4 million barrels per day in 2022.

US crude oil production had declined in 2020 by 0.9 million barrels per day in 2020. EIA expects will average at 11.3 million barrels per day in 2021 and rise to 11.9 barrels per day by the end of 2022. This is still lower than the peak in 2019 which reached 12.9 million barrels per day.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — June 24, 2021

Cathedral Energy Services Ltd. (CET:TSX) announced that it has agreed to a series of amendments to its existing credit facility. In addition, Cathedral has secured a further $1 million of liquidity through the Highly Affected Sectors Credit Availability Program that sees Business Development Bank of Canada guarantee a fixed interest rate loan made available to the Company by ATB.

Cathedral Energy Services Ltd. Is a Calgary based company focused on high performance directional drilling services. It offers its services in Canada and US. Cathedral has a market cap of $36 million and approximately 50 million shares outstanding.

Ensign Energy Services Inc. (ESI:TSX) and Nabors Industries Ltd. announced that they, through their subsidiaries, have entered into an agreement for Ensign to acquire, subject to certain closing conditions and receipt of required regulatory approvals, Nabors' fleet of 35 land-based drilling rigs located in Canada, as well as related equipment and certain real property. Ensign will be funding the purchase price with cash on hand and available Credit Facilities.

Ensign Energy Services is an oilfield services company headquartered out of Calgary, Alberta, operating in Canada, the United States and internationally. Company has a market cap of $691 million and approximately 157 million shares outstanding.

Gear Energy Ltd. (GXE:TSX) announced that it has successfully completed its annual borrowing base redetermination with the maturity date extending to May 27, 2023. This has translated into continuous and significant debt reductions. Gear is forecast to be drawn $38 million on its credit facilities on June 30, 2021.

Gear Energy limited is a Calgary based oil and gas company with operations and assets in western Canada. Company has a market cap of $158 million and approximately 219 million shares outstanding.

Permex Petroleum Corporation (OIL:CNX) announced that it has closed on multiple non-operated royalty interest ("RI") acquisitions in 29 oil and gas wells located in the Permian Basin of west Texas, all of which have established long-term production. In addition to its own working interest ownership and operations across 4,000 acres in the Basin, Permex now holds royalty interests ownership in a total of 73 wells and 5 permitted wells across 3,800 acres within the Permian Basin of West Texas and southeast New Mexico.

Parex Resources is a Calgary based international oil and gas company with activities in Columbia. Company has a market cap of $2.9 billion and approximately 129 million shares outstanding.

Reconnaissance Energy Africa Ltd. (RECO:TSX) announced on June 24th an update on drilling and seismic operations in the Kavango Sedimentary basin as well as a response to Namibia's serious outbreak of coronavirus infections. Company has taken a short break in drilling operations due to maintenance issues and expects to start drilling ahead in the next couple of days to a permitted total depth of approximately 3,800 m (12,500 feet). Reaching total depth on this second well (6-1) is anticipated during the first week of July 2021.

Reconnaissance Energy Africa Ltd, formerly Lund Enterprises Corp is a Vancouver based oil and gas company engaged in the exploration and development of oil and gas in Namibia. Company has a market cap of $31 million and has approximately 61 million shares outstanding.

ShaMaran Petroleum Corp. (SNM:TSX) announced that at the company's Annual General Meeting ) held today in Vancouver, shareholders received the consolidated audited financial statements of the Company for the year ended December 31, 2020 and approved all of the resolutions put forward at the Meeting.

ShaMaran Petroleum Corp. is a Vancouver based international company. It is a Kurdistan focused oil development and exploration company with interests in the Atrush oil discovery. Company has a market cap of $184 million and approximately 2.2 billion shares outstanding.

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ARC Resources Ltd. (ARX:TSX) announced that its shareholders approved all resolutions at its Annual and General Meeting of Shareholders held on June 22, 2021. During the business proceedings of the Meeting, ARC's shareholders approved resolution to appoint 11 board members, with 96.20 per cent to 99.35 per cent of shares represented at the Meeting voting in favour of individual directors. PricewaterhouseCoopers LLP, Chartered Professional Accountants were approved as the Corporation's auditors. Resolution to accept the Corporation's approach to executive compensation was approved with 94.56 per cent of shares represented at the Meeting voting in favour of the advisory resolution.

Arc Resources is a Calgary based oil and gas company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. Company has a market cap of $3.2 billion and approximately 354 million shares outstanding.

Enerplus Corporation (ERF:TSX) announced on June 23rd the release of its 2021 ESG report, which provides an update on the Company's progress relative to its environmental, social and governance initiatives. Enerplus' board of directors continues to be actively engaged in the Company's approach to managing ESG issues under a governance framework that provides clear oversight and accountability. The 2021 ESG report is available on Enerplus' website at www.enerplus.com.

Enerplus is a Calgary based independent North American exploration and production company focused on its crude oil and natural gas assets in Canada and the United States. Company has a market cap of $2.8 billion and approximately 244 million shares outstanding.

Leucrotta Exploration Inc. (LXE:TSXV) announced that it has closed its non-brokered private placement offering previously announced on June 15, 2021. Each Warrant entitles the holder thereof to acquire one CDE Common Share at a price of C$1.00 for a period of 36 months from the closing date of the Private Placement.

Leucrotta Exploration Inc. is a Calgary based oil and natural gas company operating in Canada. It is mainly engaged in the acquisition, development, exploration, and production of oil and natural gas reserves in northeastern British Columbia. Company has a market cap of $106 million and approximately 200.5 million shares outstanding.

Surge Energy Inc. (SGY:TSX) announced that they have entered into an arrangement agreement for total consideration of approximately $160 million. The Transaction is to be funded by the issuance of Surge common share, and the assumption of approximately $15 million of net debt.

The Astra assets include more than 4,100 boepd (90 percent liquids) of operated, light oil production, focused primarily in SE Saskatchewan with an operating netback of more than $42 per boe at US $65 WTI pricing.

Surge Energy Inc. is an oil-weighted production and development company based in Calgary. Company has its operations in western Canada. Surge has a market cap of $450 million and approximately 309 million shares outstanding.

Tidewater Midstream and Infrastructure Ltd. (TWM:TSX) announced on June 23rd that its Board of Directors has declared a dividend for the second quarter 2021 of $0.01 per common share payable on or about July 30, 2021 to shareholders of record on June 30, 2021. The ex-dividend date is June 29, 2021. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).

Tidewater Midstream and Infrastructure Limited is a Calgary based company engaged in providing infrastructure and natural gas storage facilities in North America. Company has a market cap of $447 million and approximately 331 million shares outstanding.

Wilton Resources Inc. (WIL:TSXV) announced that it intends to issue, by way of a non-brokered private placement, units of the Corporation at a purchase price of $0.35 per Unit for gross proceeds of a minimum of $185,000.

Wilton Resources Inc. is a Calgary based oil and gas company with assets and operations in western Canada. Company has a market cap of $25 million and 59 million shares outstanding.

More news on Oilpatch Review

 

Quote of the day

Willaim Castle, "An expert is a man who tells you a simple thing in a confused way in such a fashion as to make you think the confusion is your own fault."

Did you know?

Two French inventors, Conrad and Marcel Schlunberger, were the first to, invent an electric  device which could measure well bore properties and identify oil bearing formations. The two brothers were successful in 1927 to design an electrode connected to a lengthy cable which was lowered into a freshly bored oil well. Electric conductivity was measured at one meter intervals and recorded. This survey data was the beginning of well logging and introduced to America in 1938.

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prices compiled and updated on a regular basis by Canadian Insight

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     WCS  / WTI

 Price Spread -$13.28

  June 24, 2021

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