Canadian Insight

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Updated on Friday, December 13, 2019

Poll indicates Quebecers prefer Western Canadian oil over foreign imported — December 11, 2019

A poll sanction by Montreal Economic Institute shows that Quebec politicians have it all wrong. Results show a vast majority of Quebecers prefer western crude oil over foreign imported crude.

Poll showed that an overwhelming majority of Quebecers (65%) prefer for the oil imported into Quebec to come from Western Canada, versus just 13% who prefer American oil and 5% who prefer oil from another country.

When questioned about the safest way to transport crude oil, 50% of the people interviewed stated  that pipelines are the safest means of transport, followed by 11% who think the train is safest.

Chief Economist and Chief Operating Officer of Economic Institute Montreal stated, "Quebecers are much more open to hydrocarbons than we might think. They understand that we need oil and that the energy transition will not happen overnight."

 

Gibson Energy announces a new diluent recovery project  — December 4, 2019

A 100,000 barrel diluent recovery project near Hardisty, Alberta is being planned by Gibson Energy. The project is expected to free up room in pipelines and railway tankers.

Diluent is a light oil mixed with sticky, and heavy bitumen to allow it to flow in a pipeline. It makes up as much as a third of the volume of blended bitumen

Gibson Energy will partner with US Development Group, LLC, to construct and operate the facility. Project is expected to be completed and operational in 2021.

 

Laying the TransMountain Pipeline soon to begin in Alberta— December 3, 2019

TransMountain CEO Ian Anderson announced that laying the pipe will soon begin after a span of 10 years since it was first announced.

The pipeline was twice approved by the federal government and was challenged in court numerous times. This resulted in many setbacks as the whole project had to go back to further consultations and reviews.

Kinder Morgan frustrated with all of the impediments sold the pipeline to the federal government in 2018 for $4.5 billion. The pipeline project met further court delays this summer.

 It was stated that the whole project will take three years to build and cost the federal government $7.4 billion.

 

 

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.

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — December 13, 2019

AltaGas Ltd. (ALA:TSX) announced that it has agreed to issue $500 million of senior unsecured medium-term notes with a coupon rate of 2.609 percent, maturing on December 16, 2022. The Offering is expected to close on or about December 16, 2019. The net proceeds resulting from the Offering will be used to pay down existing indebtedness under AltaGas' credit facility and for general corporate purposes.

AltaGas Canada Ltd is a Calgary based company which owns and operates a diversified basket of energy infrastructure businesses. Company has a market cap of $1.0 billion and approximately 30 million shares outstanding.

CWC Energy Services Corp. (CWC:TSX) announced that the Board of Directors has approved a 2020 capital expenditure budget of $6.7 million, $6.0 million of which is maintenance and infrastructure capital related to recertifications, additions and upgrades to field equipment for the drilling rig and service rig divisions as well as information technology infrastructure, with the remaining $0.7 million being growth capital to upgrade one of the drilling rigs.

CWC Energy Services Corporation is a Calgary based contract drilling and well servicing company operating in the WCSB and the United States with a complementary suite of oilfield services including drilling rigs, service rigs, swabbing rigs and coil tubing. Company has a market cap of $43 million and approximately 510 million shares outstanding.

East West Petroleum Corp. (EW:TSXV) announced that at the annual general meeting of shareholders of the Company (the "Meeting") held on December 12th , 2019, the shareholders elected Messrs. Nick DeMare, Ross McElroy, Mark T. Brown and Kevin William Haney as directors of the Company. Mr. Haney, a new director of the Company, is the owner and President of Haney Resources Ltd. (a private company in the oil and investment industry) and a director of Spectra Inc.

The shareholders also passed all other resolutions including an ordinary resolution to replace the existing fixed stock option plan by adopting a new 10% rolling stock option plan, pursuant to which the company may grant stock options up to 10% of its issued and outstanding common shares at the time of the grant.

East West Petroleum Corporations is a Vancouver based oil and gas company with assets and operations in New Zealand and Romania. Company has a market cap of $7.2 million and approximately 90 million shares outstanding.

Keyera Corp. (YEY:TSX) announced a cash dividend for December 2019 of 16.00 cents per common share. The dividend will be payable on January 15, 2020, to shareholders of record on December 23, 2019. The ex-dividend date is December 20, 2019. This dividend is an eligible dividend for the purposes of the Income Tax Act (Canada). For non-resident shareholders, Keyera's dividends are subject to Canadian withholding tax.

Keyera Corporation is a Calgary based company with extensive interconnected assets and depth of expertise in delivering midstream energy solutions. Its predominantly fee-for-service based business consists of natural gas gathering and processing; natural gas liquids processing, transportation, storage and marketing. Company has a market cap of $5.8 billion and approximately 210 million shares outstanding.

Pipestone Energy Corp. (PIPE:TSXV) announced that it has successfully re-financed its existing credit facilities with a $225 million Reserve Based Loan, which provides meaningful financial flexibility going forward. Additionally, the Company achieved its previously announced 2019 exit production guidance in November 2019, with average estimated sales production of ~15,700 boe/d (~44% liquids).

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.

Surge Energy Inc. (SGY:TSX) announced its budget guidance for 2020 as approved by the Company’s Board of Directors. Board of Directors have approved a defensive, sustainable budget for 2020 at US $56.50 WTI flat pricing.

Despite drilling 21 percent fewer wells than budgeted, in 2019 Surge will still exit the year with production of approximately 21,000 boepd (85 percent oil).

Through a combination of primarily non-core asset sales and reduced capital spending, during the first nine months of 2019 Surge has reduced net debt by $84 million, adding significant additional liquidity to the Company’s credit facilities.

Surge Energy Inc. is an oil-weighted production and development company based in Calgary. Company has its operations in western Canada. Surge has a market cap of $450 million and approximately 309 million shares outstanding.

Valeura Energy Inc. (VLE:TSXV) announced on December 13th production results from Devepinar-1 well. The comingled test yielded gas flow rates similar to the results measured from the single intervals previously tested. The average flow rate over the 11 day co-mingled test period was 908 mcf/d and no condensate was measured during the testing. Company has shut in the well and is now performing a pressure build-up survey. Completion equipment is being de-mobilised while Valeura collaborates with its partners to define the next steps for the play.

Valeura Energy Inc. is a Calgary based company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey. Company has a market cap of $262 million and approximately 86 million shares outstanding.

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AltaGas Ltd. (ALA:TSX) announced its inaugural Environmental, Social & Governance Report, highlighting the company's 2018 performance in several key areas relevant to the long-term sustainability of its business, and demonstrating its ongoing commitment to transparency. The report can be found on the Company's new Environmental, Social & Governance microsite.

AltaGas Canada Ltd is a Calgary based company which owns and operates a diversified basket of energy infrastructure businesses. Company has a market cap of $1.0 billion and approximately 30 million shares outstanding.

Encana Corporation (ECA:TSX) announced its definitive Proxy Statement/Prospectus with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities related to its intention to establish corporate domicile in the United States.

The Special Meeting of Securityholders is planned for January 14, 2020 at 8 a.m. MT. Encana shareholders and incentive award holders as of the close of business on December 9, 2019 will be entitled to notice of and vote at the meeting.

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.

PetroTal Corp. (TAL:TSXV) announced that the company's board of directors has declared an interim dividend in respect of the common shares in the capital of PetroTal to shareholders of record at the close of business on December 20, 2019. The interim dividend will be CAD$0.0017 (£0.001) cash for each common share, subject to applicable withholding taxes for non-Canadian resident shareholders, and will be paid on January 20, 2020.

PetroTal Corporation is a Calgary based international oil and gas company. It has assets and operations in Peru. Company has a market cap of $140 million and approximately 538 million shares outstanding.

Pieridae Energy Limited (PEA:TSX) announced on December 12th its corporate guidance for 2020. Company intends to spend $32 million pre-final investment decision capital budget, $16 million Goldboro LNG development expense budget Company forecasts net operating income growth to $80-$110 million with recent acquisition synergies. Production in 2020 is predicted at. 40,000-50,000 boe/d, a 230% to 290% increase over Q3 exit production.

Pieridae Energy Limited is a Calgary based corporation focused on the development of integrated energy-related activities, from the exploration and extraction of natural gas to the development, construction and operation of the Goldboro LNG facility and the production of LNG for sale to Europe and other markets. Company has a market cap of $137million and approximately 36 million shares outstanding.

TORC Oil & Gas Ltd. (TOG:TSX) announced that the Company’s Board of Directors has approved an initial 2020 capital budget of $190 million. TORC’s strategic objectives associated with the 2020 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 2020 is focused on light oil development projects, with the majority of the capital directed to drilling, completions and tie-ins (approximately 70%). The drilling program is concentrated on the Company’s primary core areas in southeast Saskatchewan, focused on both conventional and unconventional opportunities, along with the Cardium play in central Alberta

TORC Oil & Gas Ltd is a Calgary based company engaged in exploration, development, and production of oil and natural gas reserves in the southeast Saskatchewan. Company has a market cap of $1.02 billion and approximately 217 million shares outstanding.

More news on Oilpatch Review

Quote of the day

Warren Buffett, “It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.”

 

Did you know?

Two French inventors, Conrad and Marcel Schlunberger, were the first to, invent an electric  device which could measure well bore properties and identify oil bearing formations. The two brothers were successful in 1927 to design an electrode connected to a lengthy cable which was lowered into a freshly bored oil well. Electric conductivity was measured at one meter intervals and recorded. This survey data was the beginning of well logging and introduced to America in 1938.

 

prices compiled and updated on a regular basis by Canadian Insight

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  December 13, 2019

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