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Updated on Friday, March 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 — March 23, 2018
Advantage Oil & Gas Ltd. (AAV:TSX) announced is commencing an odd-lot share repurchase program pursuant to which it will offer to buy back common shares from registered and beneficial shareholders of Advantage who own 99 or fewer common shares.
The Odd Lot Program affords Odd Lot Holders the opportunity to sell all, but not less than all, of their common shares or to continue to maintain their current holdings. Advantage will purchase up to a maximum of Cdn. $4 million of its common shares under the Odd Lot Program.
The Odd Lot Program will begin on March 27, 2018 and will expire once the Maximum is met or at the close of business on May 8, 2018 , unless otherwise extended. Advantage may extend the Period for up to an additional six weeks and may increase the Maximum at its sole discretion.
Advantage believes that the Odd Lot Program will be beneficial to Odd Lot Holders as it is a voluntary program allowing tendering Odd Lot Holders to dispose of their common shares without incurring prohibitive brokerage and other fees.
Advantage Oil & Gas Ltd. is a Calgary based natural gas company with natural gas and liquids development and production in the Montney Company has a market cap of $740 million and approximately 186 million shares outstanding.
Gear Energy Ltd. ( GXE:TSX) announced an operational update and revised outlook for 2018. Gear successfully drilled and frac'd a new extended reach Basal Belly River light oil well at 11-34-42-4W5. The well was drilled offset to the Gear 16-33-42-4W5 well; the best Belly River well drilled in the area to date with an IP30 peak rate of approximately 290 boe per day (85% liquids).
Two dual-lateral unlined General Petroleum wells successfully drilled in 2017 were brought on production in January with some of the best rates seen from this play to date. The two wells, 100/8-17-48-5W4 and 102/8-17-48-5W4, averaged peak IP30 rates over 150 bbl of oil per day per well.
Gear successfully drilled a quad-lateral unlined horizontal Cummings well into a new area outside of the existing de-risked Wildmere asset. The well is currently on production with the last 10 days averaging approximately 150 bbl per day of oil. The well was drilled and brought on production at a cost of $1.3 million.
Gear is dedicated to ensuring that invested capital is focused on low-risk, high rate of return projects in order to yield competitive growth while ensuring the maintenance of a strong balance sheet. Gear will also continue to be aggressive in implementing light and medium oil recompletion and waterflood optimization projects. The net result of the new budget is an estimated deferral of approximately 700 bbls per day of heavy oil production from the first half of 2018.
Gear Energy Ltd is a Calgary based oil and gas exploration and production company with heavy and light oil production in Central Alberta and West Central Saskatchewan. Company has a market cap of $142 million and approximately 195 million shares outstanding.
Pembina Pipeline Corporation (PPL:TSX) announced a corporate update. Company reported that it has agreed to issue $700 million of senior unsecured medium-term notes. The offering will be conducted in two tranches consisting of $400 million in senior unsecured medium-term notes, series 10 ) having a fixed coupon of 4.02% per annum, paid semi-annually, and maturing on March 27, 2028, and $300 million in senior unsecured medium-term notes, series 11 having a fixed coupon of 4.75% per annum, paid semi-annually, and maturing on March 26, 2048.
Closing of the offering is expected to occur on March 26, 2018 and the net proceeds will be used to repay short-term indebtedness of the company under its credit facilities, as well as to fund Pembina's capital program and for general corporate purposes.
Pembina Pipeline Corporation is a Calgary based pipeline and energy transporter in North America. Company has a market cap of $20 billion and approximately 503 million shares outstanding.
Petro-Victory Energy (VRY:TSXV) announced it confirms that the company's management is unaware of any material change in the company's operations that would account for the recent increase in market activity. The non-brokered private placement offering of common shares and proposed acquisition of certain oil and gas properties announced July 12, 2017 remains ongoing, and management continues to work on the offering as well as potential borrowing opportunities.
Petro-Victory Energy Corp is US based company engaged in the acquisition, exploration, and development of oil and natural gas resources and also invests in other energy activities in Latin America. Petro-Victory Energy has a market cap of $4.5 million and approximately 159 million shares outstanding.
SDX Energy Inc. (SDX:TSX) announced on March 23rd its financial and operating results for the three months and year ended December 31, 2017. Company reported a sales revenue of $13.9 million and a net revenue of $11 million in 2017. Full results may be viewed on Sedar, or the company website www.sdxenergy.com.
Paul Welch, President & CEO of SDX Energy, commented, "2017 was an exceptional year for SDX, with the acquisition of Circle Oil's assets, enabling us to substantially increase production, and cash flow, over the course of the year.”
SDX is an international oil and gas exploration, production and development company, headquartered in London, England, UK. Company has a market cap of $188 million and approximately 204 million shares outstanding.
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Did you know?
Kinder Morgan marine terminal in Burnaby, British Columbia can accommodate oil tankers with 650,000 barrels of crude oil capacity. The limitations at present are the draft restrictions at the Second Narrows bridge. The storage faculties hold more than 1.6 million barrels of crude oil and consist of 13 jumbo storage tanks.
prices compiled and updated on a regular basis by Canadian Insight
$ / liter
WCS / WTI
Price Spread ↑$24.60
March 23, 2018
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