Canadian Insight

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Updated on Monday, September 27, 2021

Acts of Hypocrisy and Stupidity — August 23, 2021

It’s only a little over eight months ago that Joe Biden was sworn in as US 46th president. He has already committed more blunders than the past ten presidents.

Immediately, after being sworn in, President Biden cancelled the permits which would allow the completion and operation of the Keystone XL Pipeline. This pipeline would have supplemented US refineries with all the crude oil that US would ever need without dependence on OPEC or other foreign sources.

After the withdrawal of the Keystone XL permit, the Biden administration canceled all new permits to prevent oil drilling and operations on public lands and waters.

During the Trump Administration, oil and gas industry in US flourished. American crude oil output almost doubled. US was on the way to becoming energy secure.

Now let’s look at what has happened in the US. Crude oil production has fallen by about 1 million barrels per day since Biden became president. Fuel pries in America are rising. With cancellation of new drilling permits, future looks very gloomy.

Last week, President Biden pleaded with OPEC to increase oil production as US gasoline prices were running high and interfered America’s economic recovery.

Biden’s push for green energy has stifled the oil and gas industry. It is apparent that Biden never researched the  important uses for crude oil. He has assumed that crude oil only produces fuel for cars and trucks. 

Today, US is importing 844,000 barrels of crude oil daily from Russia, a close ally of OPEC and an enemy of US! Now President Biden wants OPEC to increase its oil production. Maybe Joe Biden should check into history and see what happened in 1973.

 

 

Pembina Pipeline terminates deal to buy Inter Pipeline — July 27, 2021

Pembina Pipeline announced that it is pulling out of the agreement with Inter Pipeline to buy that company. It appears that Brookfield Infrastructure has won the top bid to buy Inter Pipeline.

Inter Pipeline Corporation has informed Pembina Pipeline that Inter Pipeline's Board of Directors will not be reconfirming its recommendation that shareholders of the company vote in favor of the Pembina Arrangement.

Inter Pipeline has agreed to pay Pembina Pipeline a termination fee of $350 million.

Inter Pipeline's Board of Directors is now engaging with Brookfield in an effort to reach a mutually agreeable transaction in the best interests of shareholders. Inter Pipeline will now make a formal recommendation on the Revised Brookfield Offer.

 

 

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 particular 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — September 27, 2021

Canadian Natural Resources (CNQ:TSX) announced that its employees and contractors at Canadian sites to be vaccinated by Dec. 1, as Alberta grapples with a deadly new wave of the COVID-19 pandemic. Canadian Natural , the first oil sands company to announce such a policy, made the decision after the recent rise in infections in Alberta, spokesperson Julie Woo said. Alberta has the highest rate of active cases among Canada’s 10 provinces, with 456 per 100,000 people, according to Canadian government data. CNRL will make exceptions from the policy for workers with verified medical or religious reasons against vaccination, Woo said.

Canadian Natural Resources is a Calgary based oil and gas company with operations in western Canada, the North Sea and Offshore Africa. Company has a market cap of $42 billion and approximately 1.2 billion shares outstanding.

Cypress Hills Resource Corp. (CHY>H:TSXV) announced that it has entered into an amendment to the previously announced property option agreement with Strategic Metals Ltd. dated November 20, 2021 to extend the terms of the Option Agreement by 12 months for the payment of $10,000 to Strategic Metals Ltd.

Cypress Hills Resource Corporation is a Vancouver based oil and gas company with operations in Alberta. Company has a market cap of $6.9 million and approximately 20 million shares outstanding.

Desert Mountain Energy Corp. (DME:TSXV) announced that it has granted necessary regulatory approvals, incentive stock options to purchase in aggregate 275,000 shares of its common stock. The options have been granted to directors, officers and consultants of the company. Said options were granted under the company's stock option plan and are exercisable for a period of 3 years at a price of CAD $2.83 per Share. They are subject to the company's customary vesting policy.

Desert Mountain Energy Corporation is a Vancouver based company focused on discovery and development of rare noble gas fields in the US. Company has a market cap of $206 million and approximately 71 million shares outstanding.

Questerre Energy Corporation (QECX:TSX) announced it has filed an application with the Ministry of Energy and Natural Resource in Quebec to test a reservoir for carbon storage potential. The operation will consist primarily of an injectivity test to gather data on both the safe rate of injection and storage potential. Plans are underway for a 2-D and 3-D seismic survey over areas to identify additional storage reservoirs.

Michael Binnion, President and Chief Executive Officer commented, “This will be the first test of its kind in Quebec and will gather essential technical data. We are well positioned to look for carbon storage reservoirs with a comprehensive geological and geophysical database in the province, much of it exclusive. We hope to jointly work with academic and other groups looking at studying carbon storage potential in Quebec.”

Questerre Energy Corporation is a Calgary based oil and gas company with operations in Canada and in Jordan. Company has a market cap of $88 million and approximately 390 million shares outstanding.

TC Energy Corporation (TRP:TSX) announced adjustments to its previously announced timing for quarterly dividend payments on its outstanding Cumulative First Preferred Shares Series 1, Series 2, Series 3 and Series 4. These adjustments are the result of a newly created Canadian federal statutory holiday, the National Day for Truth and Reconciliation, to be recognized on Sept. 30, 2021.

The payment date for the Cumulative First Preferred Shares Series 1, Series 2, Series 3 and Series 4 has been moved from Sept. 30, 2021 to Sept. 29, 2021, as Canadian banks are not open for payment processing on Sept. 30, 2021.

TC Energy Corporation is a Calgary based energy transporter company. It owns and operates pipelines and power generation assets in Canada, the United States, and Mexico. Company has a market cap of $48 billion and approximately 918 million shares outstanding.

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CGX Energy Inc. (OYL:TSX) announced on September 24th that it has entered into a term sheet with Frontera Energy Corporation for a US$20 million rights offering bridge loan that will enable CGX to continue to fund its share of costs related to the Corentyne, Demerara and Berbice blocks, the Berbice Deepwater Port, and other budgeted costs as agreed to by Frontera. The Rights Offering Bridge Loan is an advance on Frontera's participation in a rights offering.

CGX intends to use the funds for the exploration and development of the Corentyne and Demerara blocks offshore Guyana and the Berbice blocks onshore Guyana and for the development of the Berbice Deep Water Port in Guyana.

CGX Energy Inc. is a Toronto based international oil and gas company with assets and operations in the Guyana- Suriname Basin. Company has a market cap of $48 million and approximately 116 million shares outstanding.

Frontera Energy Corporation (FEC:TSX) announced that its joint venture partner, CGX Energy Inc., in the Petroleum Prospecting Licenses for the Corentyne and Demerara blocks offshore Guyana and CGX today provided an operational update on the Kawa-1 well, in the Corentyne Block, offshore Guyana.

On August 22, the Kawa-1 well was spud. Downhole drilling operations have been without any significant issues and are on target. Since spud, the Joint venture has successfully run the 36-inch conductor and 22 and 18-inch casing strings. As of September 23, 2021, the well has achieved the planned casing point at a total depth of 9,900 feet.

Crews have successfully run and cemented the 18-inch casing which is the third of five planned casing strings and the well is now currently drilling the next hole section below the current last casing point.The Joint Venture expects the Kawa-1 well to reach total depth in the first half of December 2021.

Frontera Energy Corporation is a Toronto based oil and gas company with operations focused in South America. Company has a market cap of $1.06 billion and approximately 98 million shares outstanding.

New Zealand Energy Corp.(NZ:TSXV) announced that James Willis, the Chairman (non-executive) of NZEC since March 2015, has assumed the dual role of Chairman/Chief Executive Officer. Company's former CEO, Michael Adams, will continue to serve the company as a consultant. The company thanks Mr. Adams for his service leading the company as our CEO for the last 5 years. Mr. Andrew McGavin, an industry veteran with more than 20 years' experience, will take up a role as Manager, Commercial.

New Zealand Energy Corporation is an oil and gas company based in Wellington, New Zealand. Company has market cap of $2.3 million and approximately 232 million shares outstanding.

Petro-Victory Energy Corp. (VRY:TSX) announced that the company has acquired ownership of ‎887,625 Class A shares in the capital of Petro-Victory through the exercise of warrants at exercise prices between CAD$2.00/share and CAD$2.20/share.‎ PPF 12, LLC acquired ownership of 2,289,694 Class B shares in the capital of Petro-Victory in exchange for a US$12,010,000 promissory note (CAD$14,848,665, or CAD$6.48/share). A copy of the early warning report for 579 Max and PPF 12 will be available under Petro-Victory's profile on SEDAR.

Petro-Victory Energy Corp is a Calgary based international exploration and production company. The company invests in petroleum and natural gas exploration and other energy activities in Latin America. Its projects include Pirity Block. Company has a market cap of $3.6 million and approximately 238 million shares outstanding.

Pipestone Energy Corp. (PIPE:TSX) announced that Riverstone V REL CNOR LP has acquired 47,159,714 common shares in the capital of Pipestone Energy Corp., representing approximately 24.6% of the common shares that Riverstone understands to be issued and outstanding as of the date hereof.

Pipestone Energy Corporation is a Calgary based oil and gas company with assets and operations in the Pipestone area of Alberta. Company has a market cap of $332 million and approximately 84 million shares outstanding.

More news on Oilpatch Review

Quote of the day

Sheryl Crow, “I don't spend a lot of time thinking about regrets because there's nothing I can do”.

Did you know?

Simple variations of the famous pump jack, also known as the jack pump, grasshopper pump, or sucker rod pump were first used in the early 1900's. By 1913, the Simplex Pumping Jack became widely popular throughout the U.S. oil fields.  Walter C. Trout, who worked in Texas for Lufkin Foundry & Machine Company, is credited for designing the now familiar counterbalanced oilfield pump jack. Trout received a patent for his invention in1926.

 

prices compiled and updated on a regular basis by Canadian Insight

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     WCS  / WTI

 Price Spread -$11.60

  September 27, 2021

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