Canadian Insight

Online oil and gas magazine keeping investors informed ...

Updated on Thursday, November 21, 2019

One of Canada’s largest natural gas producers changing its name and moving out of Calgary — November 1, 2019

Encana Corporation’s CEO, Doug Suttles, announced on Thursday that it will be changing its name to Ovintia and moving its headquarters to the United States.

The head of Encana stated that the company is moving out of Canada to improve its operating and financial outlook. Suttles stated that the move to US will give his company better exposure in attracting financial investment.

Doug Suttles went on to say, “Over the last five-plus years, we have transformed our portfolio and our culture. We've created a high quality, liquids focused multi-basin portfolio. Our focus on innovation and efficiency is consistently delivering superior financial and operational performance.

A domicile in the United States will expose our company to increasingly larger pools of investment in U.S. index funds and passively managed accounts, as well as better align us with our U.S. peers. The change in corporate domicile will not change how we run our day-to-day activities.”

Suttles concluded that the move to the US is all about opening doors to a better the business climate.

 

Value Creation Group reaches agreement with two First Nations to help transform the Alberta oilsands into clean energy— September 9, 2019

Athabasca Chipewyan First Nation, Chipewyan Prairie First Nation, First Nation #468, and Value Creation Group have jointly announced an Alliance Agreement, targeting to reach a Definitive Business Agreement within fourth quarter of 2019. .

The Alliance Partners will jointly work with Government and industry, to bring to fruition and to transform the oil sands into clean oil industry – economically , competitively  and sustainably, while unearthing huge global oil markets.

Value Creation Group's proprietary technology scheme enables upfront de-carbonization and partial decontamination of bitumen very selectively and cost effectively.

This technology  drastically simplifies the subsequent upgrading and refining  technology complexities and severities , leading to step-changes in capital cost , operating and energy costs;  as a result reducing GHG emissions. 

Value Creation Group's upgrading  produces high quality medium crudes that best-fit conventional  conversion refineries which are by far the majority of global refineries.

 

Canada’s largest oil producer is concerned with the state of Keystone XL pipeline — September 5, 2019

The CEO of Suncor Energy recently commented on the setbacks surrounding the construction of the Keystone XL pipeline. Mark Little is concerned about the political battle that environmentalists have put up and the possible risks surrounding the pipeline project.

Suncor head stated that Canadian oil producers are counting on the TC Energy Corp. (formerly known as TransCanada Pipeline Corporation) to succeed in  constructing the pipeline.

The prime supporter of the project in the US is President Trump. With the American election coming in the fall of 2020, there are possibilities of political changes and further setbacks to the project.

Speaking at the Barclays investor conference in New York, Suncor CEO Mark Little said, Keystone XL is a massive investment and the political situation in the U.S. is I think increasing the risk associated with that... That’s one that a lot of people are doing soul-searching about right now because it’s also a very substantial investment. Now we still believe it will go ahead. But time will tell.”

 

Federal Court allows more challenges to Trans Mountain expansion — September 5, 2019

A Federal Court Of Appeal has allowed further challenges to the already government approved Trans Mountain pipeline expansion. The Appeal Court judge has allowed six out of ten indigenous groups for further consultation with the federal government.

The judge has stated that consultation procedures will have short deadlines and will proceed orderly. Expectations are that consultations will begin this month.

This will bring further uncertainty and be another setback for the pipeline project despite being approved twice by the federal government.

Canadian Association of Petroleum Producers expressed disappointment and stated that it was critical to get the pipeline project started and completed….organization stated, “Canada has an opportunity to provide the world with its sustainably produced oil and natural gas to help reduce net global emissions and to meet growing global energy demand.”

 

Suncor and Shell ask regulator to review Enbridge’s new carriage contract plan— August 27, 2019

Suncor and Shell have followed MEG Energy and have asked the NEB to intervene in the intended pipeline changes by Enbridge.

Enbridge has launched a two month open season to solicit bids from shippers for contracted space on 90% of the Mainline pipeline capacity.

Canadian oil producers fear U.S. refiners like BP Plc and ExxonMobil Corp will contract the bulk of Mainline capacity. They are also concerned the contracts will tie them into delivering crude to the Midwest region, limiting their ability to reach more liquid markets like the U.S. Gulf Coast.

 

Changes to Enbridge Pipeline allocation volumes is of serious concern to some Alberta crude oil producers— August 20, 2019

Enbridge Inc’s plan to introduce long-term fixed volume contracts on its Mainline system has irritated at least one major oil producer. MEG Energy has  submitted an open letter to the NEB in objection to the intended changes by Enbridge.

Enbridge is planning to switch from a monthly nomination system to “contract carriage” . This comes at a time when Canadian export pipelines are so constrained the Alberta government has imposed oil production curtailments, and has drawn fierce criticism from small producers.

Smaller producers are concerned that large U.S. refiners like BP Plc will snap up most of the contracted capacity, leaving them scrambling to secure space on the smaller allocations of the pipeline volumes.

MEG’s CEO Derek Evans commented, “It is MEG’s position that Enbridge’s contract carriage proposal should be abandoned, as it is not in the overall public interest."

ARC Energy Research market analyst commented on the Enbridge changes.  Jackie Forrest said the 10% of the Mainline left open for spot shipping would likely be heavily rationed, resulting in more barrels getting stranded in Alberta each month and being sold off cheap.

 

National Energy Board opens yet another round of consultation  — June 24, 2019

National Energy Board announced today that it wants to hear from affected parties, the public and Trans Mountain Pipeline ULC on how the NEB should proceed with regulatory processes for the Trans Mountain Expansion Project, including compliance with Project conditions and approval of the detailed route.

The NEB's proposed approach is to continue the processes that were underway, and to rely on decisions and orders that were issued prior to the Federal Court of Appeal decision on the Project in August 2018, unless relevant circumstances have materially changed.

Most will be wondering, “Why NEB needs further consultation when the federal government has approved the pipeline project, conditions have been laid and that construction will begin in September.”

 

Federal government approves construction of Trans Mountain pipeline twining — June 18, 2019

The Trudeau Liberal administration has given approval to the Trans Mountain project. This is the second time the federal government has give the go ahead.

 A Supreme court ruling, last August, struck down the project, as it felt that there was not enough consultation with indigenous people.

The Trudeau government believes that construction could possibly begin late this summer. It is likely that with all necessary permits the project won’t begin until after the federal election.

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — November 21, 2019

Prairie Provident Resources Inc. (PPR:TSX) announced on November 21st an operational update highlighting the successful initial results from a new well in the company’s core Princess operating area.

Prairie Provident Resources' latest 102/08-04-021-11W4 well is the Company’s seventh successful Lithic Glauconite well drilled in the last two years in the Princess area. Starting November 16, 2019, the Princess well flowed for 93 hours and produced at an average flow rate of 1,067 boe/d (78% liquids) over the last 37 hours of the production test.

Incorporating volumes from this newest Princess well, the Company’s current corporate production is estimated at approximately 6,500 boe/d based on field receipts, which is at the upper end of PPR’s full year 2019 production guidance.

Prairie Provident Resources Inc is a Calgary based oil and natural gas exploration, development and production focused on its Wheatland and Princess properties in Southern Alberta and its Evi area located in the Peace River Arch area of Northern Alberta. Company has a market cap of $35 million and approximately 175 million shares outstanding.

Return Energy Inc. (RTN:TSX) announced on November 21st that it has entered into a definitive reorganization and investment agreement with Fotis Kalantzis and Richard F. McHardy which provides for: (i) a non-brokered private placement for gross proceeds of up to $25.0 million ; and (ii) the appointment of a new management team and new board of directors.

Completion of the Transaction is subject to customary closing conditions, including the approval of the TSX Venture Exchange. Upon completion of the Transaction, the shareholders of Return will be asked to approve, at a special meeting called for such purpose: (i) a change of Return's name to "Spartan Delta Corp." ; and (ii) a consolidation of the common shares of Return on the basis of one post-consolidation Common Share for up to every 40 pre-consolidation common shares.

The New Management Team will be led by Richard F. McHardy as Executive Chairman and Fotis Kalantzis as President and Chief Executive Officer, Geri Greenall as Chief Financial Officer, Thanos Natras as Vice President, Exploration, Craig Martin as Vice President, Operations, Mark Hodgson as Vice President, Corporate Development, Brendan Paton as Manager, Engineering and Ashley Hohm as Controller.

Return Energy Inc. is a Calgary based oil and gas exploration and production company. It is engaged in the exploration for and development and production of petroleum and natural gas properties internationally in Alberta. Return has a market cap of $3.3 million and approximately 111 million shares outstanding.

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Birchcliff Energy Ltd. (BIR:TSX) announced that the Toronto Stock Exchange has accepted the notice of Birchcliff’s intention to make a normal course issuer bid. NCIB allows Birchcliff to purchase up to 13,296,761 common shares (representing 5% of its 265,935,229 common shares outstanding as at November 15, 2019) over a period of twelve months commencing on November 25, 2019.

Birchcliff Energy Ltd. Is a Calgary based natural gas company. Company conducts its drilling program in resource plays located in the Peace River Arch region of Alberta. Birchcliff has a market cap of $593 million and approximately 266 million shares outstanding.

CNOOC Limited (CNU:TSX) announced on November 20th that Caofeidian 11-1/11-6 oilfield comprehensive adjustment project has commenced production.

Caofeidian 11-1/11-6 oilfield comprehensive adjustment project is located in Bohai with average water depth of 20 to 25 meters. The project has built two central processing platforms in addition to fully utilizing the existing facilities in Caofeidian oilfield, which including six wellhead platforms and one FPSO. A total of 89 producing wells are planned with 12 wells currently producing. The project is expected to reach its peak production of approximately 28,700 barrels of crude oil per day in 2021.

CNOOC Limited is a Hong Kong based Chinese oil and gas company. CNOOC has market cap of $2.2 billion and approximately 10.5 million shares outstanding.

Cub Energy Inc. (KUB:TSX) announced on November 20th its unaudited interim financial and operating results for the three and nine months ended September 30, 2019. Company reported net income of $0.3 million or $0.00 per share during the nine months September 30, 2019 as compared to net income of $2.5 million or $0.01 per share during the same period in 2018. Netbacks of $18.49/boe or $3.08/Mcfe were achieved for the nine months September 30, 2019 as compared to netback of $27.22/Boe or $4.54/Mcfe for the comparative 2018 period.

Mikhail Afendikov, Chairman and CEO of Cub commented, "We are pleased to announce net income $0.3 million during the nine months ended September 30, 2019, and receipt of $2.8 million in dividends. Natural gas prices were lower than expected during the third quarter which impacted the Company's earnings. In western Ukraine, CNG's U101 well showed that the prospective reservoir sands were water saturated with traces of natural gas that indicate there was gas migration, but no viable trapping mechanism in this particular prospect. Our technical teams are reviewing the subsurface data obtained from U101 to determine the next drilling locations. Our next planned well will be in eastern Ukraine, where Kub-Gas is planning to drill the M-30 well in Q1 2020."

Cub Energy Incorporated is a Houston, USA based international oil and gas company focused on its activities and properties in Ukraine. Company has market cap of $7.8 million and approximately 312 million shares outstanding.

Eagle Energy Inc. (EGL:TSX) announced that the Alberta Court of Queen's Bench upon the application of Eagle's secured lenders. FTI Consulting Canada Inc. was appointed as Receiver of Eagle's current and future assets, undertakings and properties.

Eagle Energy is a Calgary based oil and gas corporation with producing properties and operations in western Canada and US. Company has a market cap of $2.4 million and approximately 44 million shares outstanding.

Encana Corporation (ECA:TSX) announced that it has issued a statement in strong disagreement to Letko's news release earlier today titled: "Letko Brosseau Will Vote Against Encana's Proposed Exit from Canada."

Encana's CEO Doug Suttles commented, "We were disappointed by Letko's release earlier today stating its opposition to our recent decision to establish Encana's corporate domicile in the United States. We have had a long relationship with Letko and most certainly appreciate their investment in our company.”

The change in corporate domicile, the rebrand to Ovintiv, and a previously announced 1 – for – 5 consolidation and share exchange require two-thirds of votes cast for shareholder approval. A special meeting of Encana shareholders will be held in early 2020. In addition to shareholder approval, stock exchange and Canadian court approvals are also required

Encana Corporation is a Calgary based energy company focused on developing its resources plays in North America. Company has a market cap of $14.8 billion and approximately 1.5 billion shares outstanding.

Kinder Morgan Canada Limited (KML:TSX) announced on November 20th that it and Pembina Pipeline Corporationhave received a "no-action letter" from the Canadian Competition Bureau confirming that the Commissioner of Competition does not intend to challenge the proposed acquisition of KML's outstanding common equity by Pembina by way of a statutory arrangement under the Business Corporations Act (Alberta) (the Arrangement).

Kinder Morgan Canada Limited is a Calgary based company focused on stable, fee-based energy transportation and storage assets that are central to the energy infrastructure of Western Canada. Company has a market cap of $514 million and approximately 35 million shares outstanding.

Pembina Pipeline Corporation (PPL:TSX) announced on November 20th that it and Kinder Morgan Canada Limited have received a "no-action letter" from the Canadian Competition Bureau confirming that the Commissioner of Competition does not intend to challenge the proposed acquisition by Pembina of Kinder Morgan Canada's outstanding common equity by way of a statutory arrangement under the Business Corporations Act (Alberta).

Pembina Pipeline Corporation is a Calgary based transportation and midstream service provider that has been serving North America's energy industry for over 60 years. Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. Company has a market cap of $22 billion and approximately 506 million shares outstanding.

PetroShale Inc. ( PSH:TSX) announced its financial and operating results for the three and nine month periods ended September 30, 2019, along with the company's 2020 business plan. Adjusted EBITDA was $30.0 million in the third quarter, an increase of 84% relative to the second quarter of 2019, reflecting increased production volumes. Cash flow from operating activities of $32.3 million ($0.16 per diluted share) was generated in the third quarter, $33.9 million higher than the second quarter of 2019, representing the highest cash flow generated in the Company's history. Net income was $5.0 million ($0.03 per diluted share) in the third quarter, 194% higher than $1.7 million ($0.02 per diluted share) recorded in the previous quarter.

Company drilled a total of 4.7 net wells and 5.5 net wells were brought online during the third quarter, contributing to the strong operational and financial performance. PetroShale's production (of which 80% is operated) achieved a record level in the third quarter, averaging 11,467 barrels of oil equivalent per day (87% liquids), 93% higher than the second quarter of 2019.

PetroShale is a Calgary based oil company engaged in acquisition, development and consolidation of interests in the North Dakota Bakken and Three Forks region. Company has a market cap of $203 million and approximately 192 million shares outstanding.
 

More news on Oilpatch Review

Quote of the day

Warren Buffet, “The first rule is not to lose. The second rule is not to forget the first rule.”

 

 Did you know?

Haliburton Oil Well Cementing Company conducted the first experimental hydraulic fracturing in 1947. Haliburton, a well servicing company, formulated a fracturing fluid made up of gelled gasoline (napalm) and sand. This fluid was pumped into an oil well and successful achieved  successful fracturing. The oil well belonged to Stanolind Oil Company and was situated in Hugoton Field in southeastern Kansas. In 1949, Haliburton began commercial oil well fracturing was awarded a patent on the process.

 

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  November 21, 2019

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