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Updated on Friday, February 23, 2018
Federal Regulator sets tighter regulations on pipelines — February 22, 2018
The National Energy Board announced tighter regulations on pipeline pipe and components. NEB is ordering that all regulated companies report any identified pipe or components that do not meet industry standards.
NEB stated that to date there have not been any reported accidents due to faulty pipe or components. The federal regulator is taking a proactive approach to insure public safety and prevent possible future incidents.
Trans Mountain Pipeline expansion cleared by NEB — February 16, 2018
Kinder Morgan Canada Limited received word yesterday from Canada’s energy regulator. The National Energy Board has issued three decisions that collectively provide Trans Mountain Pipeline ULC the ability to start construction on the Burnaby Mountain tunnel entrance, subject to other applicable federal, provincial and municipal permits.
The decisions enables Trans Mountain to begin clearing and grading work now at the entrance of the Burnaby Mountain tunnel, or portal, on its Westridge Marine Terminal property to avoid potential impacts on migratory birds that could use that area later in the spring.
Specifically, the NEB issued two detailed route hearing decisions that approved the pipeline route where the Burnaby Mountain tunnel will be constructed.
Trans Mountain also sought relief from the NEB on the applicability of the remaining pre-construction conditions to allow tunnel portal construction to commence within the Westridge Marine Terminal property. NEB has granted relief from all remaining pre-construction conditions specific to the tunnel portal at Westridge Marine Terminal.
Trans Mountain now has the NEB's regulatory approvals to begin work at Westridge portal for the Burnaby Mountain tunnel, but construction is not yet authorized along the rest of the pipeline route. Construction in those areas can begin once the necessary preconstruction conditions have been satisfied, and the applicable portions of the detailed route are approved.
Progress Energy plans extensive growth plan as result of selling Alberta assets — February 16, 2018
Calgary based Progress Energy Limited announced ambitious plans in British Columbia following disposal of Alberta oil and natural gas assets.
The company stated that the sale has brought considerable domestic and international interest. The proceeds of the sale will be used to grow the company's world-class unconventional natural gas assets in British Columbia's North Montney.
Mark Fitzgerald, Progress President & Chief Executive Officer, commented, "Together with our parent company, PETRONAS, we have built our long-term strategy in Canada based on the commitment that we will operate as a best-in-class unconventional natural gas operator. This sale further supports our ability to consolidate our focus on the vast unconventional resource we have in the North Montney in northeast B.C."
TransCanada announces a $2.4 billion natural gas pipeline expansion for western Canada — February 15, 2018
TransCanada Corporation announced a $2.4 billion project to expand its Nova Gas Transmission Ltd. natural gas system in western Canada.
Company reported that Nova Gas Transmission has recently completed an open season. It is reported that it has exceeded expectations and has been oversold.
TransCanada reported that shippers have committed binding agreements with a total of over a billion cubic feet. The service is expected to begin in November of 2020 and April 2021.
TransCanada expects to file the necessary application forms with the National Energy Board in the second quarter of this year. If approved, it expects construction to begin in 2019.
British Columbia’s government intends to implement tighter regulations on crude oil shipments— February 1, 2018
British Columbia’s Environment and Climate Change Minister George Heyman announced recently that the province will be proceeding in implementing tighter regulations on bitumen diluted crude oil.
The provincial government will set up an independent advisory panel to scrutinize the implications and safety aspects of transporting bitumen diluted crude oil through his province and provincial coastal waters. Heyman stated that he is respond to environmental concerns of pipeline expansion (Kinder Morgan Trans Mountain Pipeline).
Hyman stated that he intends to introduce new and tighter regulations on all diluted bitumen entering his province. These new regulations may come as soon as in 2019.
Alberta’s Premier Rachel Knotely has responded quickly to this announcement. Knotely stated that her government will challenge to British Columbia’s restrictions and take legal action.
Knotely said that the new regulations could stymie future oil shipments through the west coast and impose economic hardships on Alberta’s oil producers.
National Energy Board announces a new process to resolve future permit disputes — January 19, 2018
Canada’s National Energy Board announced today that it is implementing a new generic process in an attempt to resolve future disputes between Trans Mountain Pipeline ULC and provincial and municipal governments.
The Board has implemented a regulation where Trans Mountain Pipeline must adhere to its commitment to apply for or seek variance with the NEB regarding provincial and municipal authorization or permits.
Under this process, a decision must reached within a period of 3 to 5 weeks after filing a request with the National Energy Board.
In a request by Trans Mountain Pipeline, dated December 7, 2017, NEB has ruled that Trans Mountain Pipeline does not have to abide by two sections of the Burnaby municipal bylaws.
Following the NEB announcement, Kinder Morgan responded that it is pleased with the NEB decision and will adhere to all future requirements.
TransCanada receiving very strong commercial support for Keystone XL Pipeline — January 18, 2018
TransCanada announced that it has concluded and filled its open season for the Keystone XL project with 20 year contract commitments.
The Calgary based Canadian energy transporter stated that it has received very strong support for the project from Canadian and American politicians. Company thanked President Donald Trump and Premier Rachel Knotely for their support.
Last November, TransCanada received approval for the project but the pipeline route must be shifted away from sensitive ecological regions to safer alternative areas. TransCanada said that it is working with landowners along the new route.
Initial preparations for the pipeline are underway and primary construction work is expected to begin in 2019.
Renown advisor sees a positive recovery in Canadian oil industry — January 4, 2018
Deloitte's Resource Evaluation and Advisory group predicts that there will be a strong recovery in the global oil prices this year. The renown advisor sees a lesser rise oil prices in Canada but believes there is room for a remedy.
Deloitte’s analyst Andrew Botterill says, "Canadian oil prices lagged behind those in the United States during 2017 largely due to increased U.S. production and possible transportation difficulties getting Canadian oil into that market.”
Botteral goes on to state, "But if Canada can take advantage of declining Venezuelan and Mexican exports to the U.S. and access some of its heavy oil refining capacity, the price differential between WCS and WTI should at least be moderate compared to the historical differential."
While US is boosting its oil production quickly, it is also entering the oil exports scene at a historic pace. One third of US production is entering the export markets.
Canada has a golden opportunity in increasing its heavy oil into the US while Mexico and Venezuela disappear from marketing their heavy oil into the US. It’s a golden opportunity that Canadian oil producers should take advantage of.
Deloitte predicts that there will be a continued significant price spread between US’s WTI crude oil and Canadian WCS, but it will narrow with decreasing US bottle necks. Botterill predicts that WTI will trade at an average of $55 per barrel in 2018 and WCS will average during the same period at $46 per barrel. This is significantly better than the present WCS price situation.
Our most recent ‘Shouts & Toots’ from the Oil Patch — February 23, 2018
Altura Energy Inc. (ATU:TSXV) announced results of the independent evaluation as of December 31, 2017 and an operational update.
Proved developed producing reserves increased by 45 percent from 1,099 mboe to 1,595 mboe. Total proved reserves increased by 71 percent from 1,821 mboe to 3,107 mboe. Total proved plus probable reserves increased by 68 percent from 3,195 mboe to 5,370 mboe.
Altura drilled and completed a 1.5-mile ERH well (100/02-02-049-26W4 or "02-02") at Leduc-Woodbend in the first quarter of 2018. The well was drilled to a vertical depth of 1,300 meters with a horizontal length of approximately 2,000 meters with 46 frac stages and is expected to be placed on production by the end of February. Drilling and completion costs for 02-02 are estimated at $2.4 million.
Altura's 2018 capital budget is expected to be $15.0 million. The budget is split approximately 60% to drilling, completion, equipping and tie-in capital and 40% to infrastructure and other capital. The significant weighting to infrastructure investments positions Altura to reduce operating costs and grow production profitably as it continues to evaluate the Leduc-Woodbend pool.
Altura Energy is a Calgary based oil and gas company engaged in the exploration, development and production of oil and natural gas in the Western Canadian Sedimentary and Williston basins. Altura has a market cap of $36.5 million and approximately 109 million shares outstanding.
BlackPearl Resources Inc. (PXX:TSX) announced its financial and operating results for the three and twelve months ended December 31, 2017. Q4 2017 revenue was $43 million, 23% higher than Q4 2016. For the year, oil and gas revenue was $151 million or 39% higher than 2016. Company reported a net income of $6.47 million in the fourth quarter and a net income of $17.16 million for the year 2017.
John Festival, President of BlackPearl, commented, "2017 was another successful year for BlackPearl. Our focus was to continue operating phase 1 of Onion Lake thermal at or above design capacity and to build phase 2 on time and within budget. We believe that Onion Lake is a top tier thermal project in Western Canada that provides long life, low decline, low cost production. We see additional expansion opportunities at Onion Lake over the next few years and we have sufficient reserves for 25+ years of activity. We should be able to fund this growth from our cash flows and our existing or expanded credit facilities without any additional dilution to shareholders. Longer-term, development of Onion Lake will put us in a better position to continue our growth with our Blackrod SAGD project."
BlackPearl Resources Inc is a Calgary based company engaged in the business of oil and gas exploration, development and production. The Company's focus is on heavy oil and oil sands projects in Western Canada. Company has a market cap of $347 million and approximately 336 million shares outstanding.
Pembina Pipeline Corporation (PPL:TSX) announced its financial and operating results for the fourth quarter and full year 2017. Cash flow from operating activities was $523 million and $1,513 million for the three and twelve months ended December 31, 2017 compared to $286 million and $1,077 million for the same periods in 2016, an increase of 83 percent and 40 percent, respectively. Company reported a net revenue of $709 million in the fourth quarter and a net revenue of $2.4 billion for the year 2017.
Throughout the year, $4.8 billion of new projects were placed into service. These assets include our Phase III expansion, third fractionator at Redwater, Canadian Diluent Hub, four major gas processing facilities (including Veresen Midstream), additional pipeline expansions as well as several other value-added capital projects.
Pembina's Board of Directors has approved the construction of fractionation and terminalling facilities at the Company's Empress, Alberta extraction plant. The new facilities will add approximately 30,000 barrels per day of propane-plus fractionation capacity to the Company's Empress East NGL system.
Pembina Pipeline Corp is a Calgary based company which caters to the oil and gas industry. Its services include transportation of oil and gas through its pipelines. Company has a market cap of $22 billion and approximately 503 million shares outstanding.
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Gear Energy Ltd. (GXE:TSX) announced its fourth quarter operating update to shareholders. Company achieved record high sales production for the fourth quarter averaging 7,090 boe per day. This was a nine per cent increase compared to the prior quarter and a 14 per cent increase compared to the prior year fourth quarter. As a result of takeaway bottlenecks experienced in the fourth quarter, Gear built its heavy oil inventory by approximately 27,000 barrels to exit with approximately 189,000 barrels in storage.
Gear realized quarterly cash flow from operations of $14.6 million, a 46 per cent increase from the third quarter cash flow of $10.0 million and the highest quarterly cash flow in 10 consecutive quarters. Company achieved operating netback of $25.88 per boe and a corporate netback of $22.40 per boe, an increase of 34 per cent and 35 per cent, respectively, from the third quarter, principally as a result of increased prices and lower costs.
Gear drilled 7 gross (7 net) wells during the quarter with 100 per cent success including; three multi-lateral unlined heavy oil wells in Wildmere, two fracture stimulated medium oil wells in Killam, one horizontal heavy oil well in Paradise Hill, and one multi-lateral unlined heavy oil well in Hoosier. Based on preliminary results, aggregate production for the new wells is meeting expectations. Total development capital expenditures during the fourth quarter totaled $12.3 million.
In 2017, Gear successfully drilled 33 out of 34 gross wells (32.8 out of 33.8 net) including 15 Paradise Hill heavy oil wells, 11 Wildmere heavy oil wells, three Hoosier heavy oil wells, two Killam medium oil wells, and three Wilson Creek light oil wells. The one unsuccessful well experienced an underground blowout prior to reaching the target reservoir and was abandoned after being safely and effectively contained. All associated expenditures were insured.
Gear Energy is a Calgary based oil and gas company with heavy and light oil production in Central Alberta and West Central Saskatchewan. Company has a market cap of $148 million and approximately 195 million shares outstanding.
Lightning Ventures Inc. (LVI:CNX) announced that, as part of an overall effort to reduce debt and streamline operations, it has agreed to sell all of the issued and outstanding shares of its wholly-owned New Mexico subsidiary, Lightning Industries, Inc. , to Titan Products, LLC, an unrelated limited liability company with offices in Overland Park, Kansas.
Lightning Subco's principal assets include its intellectual property and a small production facility located in Hobbs, New Mexico that was used during the development of the Company's Hot Trailer and Chemical Injection System but is not suitable for commercial production.
At Closing, Lightning Subco will grant to the Company an exclusive license to manufacture, distribute, sell and service the Hot Oil Trailer and Chemical Injection System in all countries, together with the exclusive right to patent these products anywhere in the world other than in the United States.
Lightning Ventures Inc. is a Vancouver based oil and gas industrial services company engaged in the manufacture and sale of products intended to enhance efficiency and increase the production of oil and gas wells. Company has a market cap of $5.6 million and approximately 140 million shares outstanding.
Manitok Energy Inc. (MEI:TSXV) announced that the Court of Queen's Bench of Alberta ( made orders appointing Alvarez & Marsal Canada Inc. as receiver and manager of the assets, undertakings and properties of the corporation and its wholly owned subsidiary Raimount Energy Corp.
Decisiont is terminating the time within which Manitok, Raimount and Corinthian Oil Corp. were permitted to file proposals to their creditors under section 50.4(11) of the Bankruptcy and Insolvency Act (Canada). It is substituting Alvarez & Marsal Canada Inc. in place of FTI Consulting Canada Inc. as trustee in bankruptcy of Manitok, Raimount and Corinthian.
As a result of the termination, Manitok, Raimount and Corinthian are deemed to be bankrupt. All of the directors of Manitok, Raimount and Corinthian resigned as a result of the appointment of the Receiver and the bankruptcy.
Manitok is a Calgary based oil and gas exploration and development company focusing on Lithic Glauconitic light oil in southeast Alberta and Cardium light oil in west central Alberta. Company is prohibited from trading due to bankruptcy.
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Quotes are directly taken from a book entitled, ‘Phrase A Day Inspirations’, written by Bernie Shimko. ‘Canadian Insight’ wishes to thank Bernie and his wife Adeline for permitting the use of their inspiring quotes.
Did you know?
Liquefied Natural Gas (LNG) is natural gas that has been cooled to -162°C and becomes a liquid allowing it to be safely transported over long distances in special tankers. Natural gas in its liquid state is neither combustible or explosive. LNG occupies 1/600 the space of natural gas in its gaseous state.
prices compiled and updated on a regular basis by Canadian Insight
$ / liter
WCS / WTI
Price Spread ↑$28.00
February 23, 2018
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