Canadian Insight

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Updated on Friday, December 14, 2018

Alberta government to legislate crude oil production cuts — December 3, 2018

Premier Rachel Notley announced on Sunday that her NDP government will introduce legislation which will make mandatory crude oil production cuts in Alberta. The legislation will take effect on January 1, 2019.

Alberta’s premier stated that her government intends to legislate a production cut of 8.7%, or approximately 325,000 barrels per day.  Once the oil glut is down (possibly by spring), production cuts will drop to approximately 95,000 barrels per day.

Last week, Premier Notley announced that her government intends to purchase 80 locomotives and 7000 tanker cars to move crude oil to markets. In the announcement, the premier estimated that this investment should move 120,000 barrels of crude oil daily.

The federal government appears to be in favor of the two proposals but has not offered any financial help in Notley’s endeavor, or help oil industry through the crisis.

WCS crude oil prices have hit all time lows in recent weeks. The Alberta government is hoping to end the oil glut in her province which would also boast the oil prices in western Canada.

 

Imperial Oil Ltd. about to begin construction of its Aspen Oilsands project — Nov. 7, 2018

Imperial Oil announced today that it will go ahead with its Aspen Oilsands project northeast of Fort McMurray. Construction will begin immediately and be completed by 2022.

The oil sands project is estimated to cost $2.6 billion and is expected to employ 700 jobs during the peak of its construction.

Imperial Oil stated that it will be employing new technology in its operations. It will use 25% less water in its operations compared to traditional steam assisted means.

The project when completed will produce  75,000 barrels of crude oil daily. It will have the capability to expand to double its initial production volumes.

 

National Energy Board releases schedule of Trans Mountain Expansion hearings and summation  — Oct. 15, 2018

National Energy Board released a hearing schedule  for Trans Mountain; this is as required by Federal authorities for its reconsideration of aspects of the Trans Mountain Expansion Project pertaining to project related marine shipping.

The hearings will start this month and end in December. Oral summary arguments will be presented in January, 2019. Complete process and issue resulting report will come no later than February 22, 2019.

 

British Columbia’s carbon tax squeezing the profitability out of natural gas in that province — October 11, 2018

Doug Suttles, CEO of EnCana  Corporation, stated that British Columbia’s carbon tax is costing his company $100,000 per each natural gas well drilled in that province. He went on to say that carbon taxes are making it unprofitable to compete with USA

Suttles went on to say that natural gas is a very clean fuel which produces very low carbon emission, and yet, it is not being credited for its benefits but instead taxed. Natural gas is used extensively to produce electricity worldwide.

Doug Suttles went on to conclude that Canada needs stronger voice in this country to steer the its direction in global energy leadership.

 

Federal government of Canada freezes all offshore Arctic oil and gas drilling and development— October 4, 2018

Minister of Intergovernmental and Northern Affairs and Internal Trade, Dominic LeBlanc,  announced Canada's next steps on future Arctic offshore oil and gas development for current license holders. Government of Canada will freeze the terms of the existing licenses in the Arctic offshore.

The federal government will work with Northern partners to co-develop the scope and governance framework for a science-based, life-cycle impact assessment review every five years that takes into account marine and climate change science.

LeBlanc stated that the federal government will negotiate a Beaufort Sea oil and gas co-management and revenue-sharing agreement with the governments of the Northwest Territories and Yukon, and the Inuvialuit Regional Corporation.

Two years ago, Prime Minister Justin Trudeau stated that his government would engage in a one-year consultation process with the current license holders, and a moratorium on new oil and gas exploration licenses in the Arctic, renewable every five years based on the best available science.

 

LNG Canada Project participants reach a final investment decision — October 2, 2018

Petronas and its five joint partners have reached a final investment decision on a major liquefied natural gas (LNG) project in Kitimat, British Columbia.

The LNG export facility includes the design, construction and operation of a natural gas liquefaction plant and facilities for the storage and export of LNG, including marine facilities. Included with the project is  a 670 kilometer pipeline delivering natural gas from the northeast corner of the province.

LNG Canada project will initially consist of two LNG liquefaction processing units with a total capacity of approximately 14 million tonnes per year.  The project has the potential to expand to four times the initial production capacity. The total project is appraised to cost $40 billion.

Eagle Spirit Energy Holdings waiting and willing to construct a northern route pipeline — Sept. 27, 2018

An all indigenous group of investors, Eagle Spirit Energy Holdings, wants the federal government to withdraw legislation which would prohibit oil tankers from using the northern B.C. coastal route.

Eagle Spirit Energy stated that it has a plan to construct a  quadruple 48 inch pipeline from Alberta through northern British Columbia. Two of the pipelines would carry crude oil and the other two would transport natural gas to the west coast.

The leader of the investment group, Calvin Helin stated that the proposed pipeline would be far more advantageous and far more environmentally friendly than the failed Northern Gateway  Pipeline, as the proposed pipeline would not carry any condensate.

Helin went on to conclude that shipping crude oil through Prince Rupert is a safer route and National Energy Board would more likely give approval to. This project would benefit and encourage development of Canada’s natural gas, LNG industry and Alberta’s oil sands.

 

Teck Resources planning a $20.6 billion oil sands mining operation in northern Alberta — Sept. 25, 2018

Public hearings have begun for a proposed oil sands operation near Fort McMurray, in northeastern Alberta. Vancouver based Teck Resources Limited wants to construct a $20.6 billion bitumen mining operation.

The megaproject would be built in two phases. In the first phase, operations would produce 170,000 barrels of crude oil per day. In the next phase, an additional 90,000 barrels of crude oil would be added.

Teck Resources wants construction to start while the industry is still in a slowdown and costs remain low. Teck intends to have the first phase in operation by 2026.

 

Government orders NEB to reconsider recommendations for Trans Mountain Pipeline approval — Sept. 21, 2018

Federal Natural Resources Minister Amarjeet Sohi that he has ordered the National Energy Board to reconsider its recommendations and take into the account the effects of  project related marine shipping.

Honorable Amarjeet Sohi stated, "Today, we have instructed the National Energy Board to reconsider its recommendations, taking into account the effects of project-related marine shipping. The NEB will be required to complete a thorough and prompt review and deliver its report within 22 weeks."

He went on to conclude, “"Today's announcement represents one important step towards addressing issues raised by the Federal Court of Appeal while continuing to deliver the highest levels of marine protection that Canadians expect."

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — December 14, 2018

Birchcliff Energy Ltd. (BIR:TSX) announced that Ms. Stacey McDonald has been appointed as a director of Birchcliff effective December 14, 2018. Ms. McDonald brings over 13 years of experience in the energy and financial sectors to Birchcliff, including extensive knowledge of capital markets and financial analysis.

Ms. Rebecca Morley has resigned as a director of Birchcliff effective December 14, 2018, as Ms. Morley has accepted a position with McKinsey & Company which prohibits its employees from serving as directors of public companies.

Birchcliff is a Calgary based intermediate oil and gas company with operations concentrated within its one core area, the Peace River Arch of Alberta. Company has a market cap of $816 million and approximately 266 million shares outstanding.

Suncor Energy Inc. (SU:TSX) announced on December 14th released its 2019 corporate guidance which includes a capital program of between $4.9 and $5.6 billion and average upstream production of 780,000 to 820,000 barrels of oil equivalent per day.

Mark Little, president and chief operating officer commented, “The market for Alberta’s heavy and synthetic crude oils has been significantly impacted by the lack of market access out of the region.....Suncor has made long-term strategic investments to mitigate risk and create economic value and jobs for Albertans and Canadians.”

Company news release went on to state the Government of Alberta intervention creates long-term market uncertainty, and reduces any incentive for market participants to invest in crude oil processing facilities or commit to long-term transportation arrangements.

Suncor Energy is a Calgary based integrated energy company, operating in western Canada, east coast Canada, the United States, and the North Sea. The upstream portfolio includes bitumen, synthetic crude, and conventional crude, which helps to offset higher-cost oil sands production. Company has a market cap of $65 billion and approximately 1.6 billion shares outstanding.

Whitecap Resources Inc. (WCP:TSX) announced on December 14th that it intends to release its 2019 budget before market open on Tuesday, December 18, 2018 and has scheduled a conference call and webcast to begin promptly at 9:00 am MT (11:00 am ET) on Tuesday, December 18, 2018. A live audio webcast of the conference call will be accessible on Whitecap's website.

Whitecap Resources Inc. is an oil-weighted growth company based in Calgary. Company has a market cap of $1.8 billion and approximately 416 million shares outstanding.

49 North Resources Inc. (FNR:TSX) announced the closing, on December 12, 2018, of its previously announced rights offering for aggregate gross proceeds of $452,570.62. The rights offering was 74.96% subscribed, with a total of 22,628,531 common shares of 49 North being issued to rights holders.

49 North is a Saskatoon, Saskatchewan based resource investment company. Its diversified portfolio of assets includes investments in shares and other securities of junior and intermediate mineral and oil and gas exploration companies. Company has a market cap of $1.2 million and approximately 60 million shares outstanding.

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AltaGas Ltd. (ALA:TSX) announced on December 13th the details of its balanced funding plan and outlook for 2019. The plan outlines measures to regain financial strength and flexibility to fund future growth opportunities.

Company is anticipating a solid business outlook with anticipated 2019 normalized earnings before interest, taxes, depreciation and amortization in the range of $1.2 - $1.3 billion and normalized Funds from Operations of $850 - $950 million.

A comprehensive review of the dividend policy has been completed by the Board of Directors, and approval has been secured to reset the monthly dividend to $0.08 per common share or $0.96 per common share annually.

AltaGas is an energy infrastructure company based in Calgary with a focus on midstream, regulated utilities and power. Company has a market cap of $4.0 billion and approximately 271 million shares outstanding.

Ballard Power Systems (BLDP:TSX) announced on December 13th that it has received a purchase order from Porterbrook Leasing Company Limited for an FCveloCity®-HD fuel cell module and related support to power a HydroFLEX train in the U.K. Porterbrook Leasing Company is a leading participant in the rail leasing market.

Porterbrook will provide a Class 319 electric train for conversion by BCRRE's technical and research experts into a HydroFLEX hydrogen-powered train. The train will utilize Ballard's power module and Ballard will also provide system controls development, mechanical integration of sub-systems and other components.

HydroFLEX will be the U.K.'s first fully sized hydrogen demonstrator train. It will showcase how hydrogen can be used to power a train that retains the ability to operate across existing electric routes, on either 3rd rail or 25kV overhead power. Testing and demonstration runs are planned for the summer of 2019 at RailLive, which will take place at Long Marston in Warwickshire.

Ballard Power Systems Inc. is a Vancouver based company. It is a developer and manufacturer of proton exchange membrane fuel cell products for markets such as heavy-duty motive, portable power, material handling as well as engineering services. Ballard has has a market cap of $874 million and approximately 232 million shares outstanding.

Keyera Corp. (KEY:TSX) announced on December 13th a cash dividend for December 2018 of 15.00 cents per common share. The dividend will be payable on January 15, 2019, to shareholders of record on December 24, 2018. The ex-dividend date is December 21, 2018. This dividend is an eligible dividend for the purposes of the Income Tax Act (Canada).

Keyera Corp. is a Calgary based company which operates an integrated midstream business with extensive interconnected assets and depth of expertise in delivering midstream energy solutions. Company has a market cap of $4.0 billion and approximately 271 million shares outstanding.

PetroTal Corp. (TAL:TSX) announced on December 13th an update on its the Bretana oil field in Block 9. Company has focused significant effort and capital to bring this area into commercial production.

Company has notified Perupetro of a declaration of commerciality in respect of the Bretana oil field in Block 95. The declaration of commerciality in Bretana was a result of the successful ongoing long-term testing and the stability of production.

PetroTal Corp. is a Calgary based oil and gas company with active oil and gas development interests in Peru. Company has a market cap of $140 million and approximately 538 million shares outstanding.

TORC Oil & Gas Ltd. (TOG:TSX) announced the company's Board of Directors has approved an initial 2019 capital budget of $180 million. TORC's strategic objectives associated with the 2019 capital budget are consistent with the company's long term objectives of achieving disciplined per share growth in combination with maintaining financial flexibility while paying a sustainable dividend.

TORC's capital program in 2019 is focused on light oil development projects, with the majority of the capital directed to drilling, completions and tie-ins

Torc Oil and Gas is a Calgary based company with its primary core areas in southeast Saskatchewan, focused on both conventional and unconventional opportunities, along with the Cardium play in central Alberta. Company has a market cap of $917 million and approximately 216 million shares outstanding.

            

            

More news on Oilpatch Review

 

Today’s Inspirations

“What wisdom is better than kindness?”.

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?

The Irwing refinery in St. John, New Brunswick is Canada’s largest refinery. In peak production it produces 300,000 barrels per day of refined petroleum products. It makes high octane gasoline, low sulphur diesel, jet fuel, heating oil, motor gasoline, a variety of motor oils, asphalt, and propane. The Irwing refinery accounts fro 40% of Canada’s petroleum exports.

 

prices compiled and updated on a regular basis by Canadian Insight

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Victoria

Vancouver

Calgary

Edmonton

Saskatoon

Regina

Brandon

Winnipeg

Hamilton

Ottawa

Toronto

Montreal

Halifax

Moncton

St. John’s

 

 

$ / liter

 

1.549

1.549

1.209

1.169

1.199

1.189

1.139

1.129

1.209

1.169

1.219

1.289

1.279

1.279

1.359

 

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     WCS  / WTI

 Price Spread $40.25

  December 14, 2018

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