Canadian Insight

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Updated on Thursday, May 16, 2019

Canadian Municipalities are concerned about Bill C-69 and its consequences — May 2,, 2019

Coalition of Canadian Municipalities for Energy Action has expressed their concerns and suggested amendments towards Bill C-69 with Ministers, Senators, Members of Parliament, and other key political decision-makers in Ottawa.

 Bill C-69 does not clearly outline the financial and administrative burden for municipalities. There is concern that this uncertainty will lead business and industry to invest elsewhere. The purpose of the bill should be to improve investor confidence, strengthen the Canadian economy, encourage prosperity, and improve competitiveness. Municipalities would like to see these principles reflected in the legislation.

With the bill's proposed new regulatory structure there is concern that progress on municipal infrastructure projects will be impeded. The language of the bill is open to interpretation and does not provide the necessary clarity on municipal land-use planning, waterway use, indigenous consultation or federal grants.

CAPP informing Newfoundland electorate  of the value of oil and gas industry to the province and Canada — May 1, 2019

Canadian Association of Petroleum Producers are informing the citizens of Newfoundland and Labrador that they should be informed about how valuable the oil and gas industry is to the economy of that province and Canada as a whole.

Paul Barnes, director for CAPP, and speaking for the organization, stated, “Newfoundlanders and Labradorians need to be well-informed and have a clear picture of how we can make our province better before heading into the election. A vote for energy sends the message that Newfoundland and Labrador can, and should, be supplying energy to the world.

A healthy oil and natural gas industry benefits all of Canada, and builds on the backbone of our economy. As Newfoundlanders and Labradorians head to the polls, the message is that a vote for energy is a vote to build a prosperous Newfoundland and Labrador.”

A new more positive direction for Alberta and its oil and gas industry — April 17, 2019

Jason Kenny and his United Conservative Party won a majority government yesterday. Kenny is a former Conservative cabinet minister in the Stephen Harper government.

Immediately after getting elected he announced that Alberta is open for business. He invited all domestic and foreign investors back into the province and stated, “Alberta is now open for business.” Kenny’s prime goal is to jump start Alberta’s economy.

Jason Kenny promised the electorate that he will scrap the Rachel Notely implemented carbon tax and fight the federal carbon tax in court. Kenny will be joining the other conservative governed provinces ( Saskatchewan, Manitoba, Ontario and New Brunswick ) in opposition to the left leaning Trudeau administration.

President Trump jump starting new energy projects — April 15, 2019

President Trump has signed another order clarifying the president alone has authority to issue permits for cross-border projects such as pipelines.

This new order makes it much more difficult for states to block pipelines and other energy projects on the basis of environmental concerns.

President Donald Trump is eager to jump start energy projects such as the TransCanada Keystone XL oil pipeline. He has now taken action to assert executive power over such infrastructure.

President Trump, prior to the enactment of the above mentioned third order,  issued a new permit which replaces the one granted in March 2017. The order is intended speed up development of the controversial pipeline, which would ship crude oil from tar sands in western Canada to the U.S. Gulf Coast.

Kitimat LNG terminal may double in size according to its two principal investors — April 5, 2019

Chevron Canada Ltd and Woodside Energy Ltd have applied for a new license for their Kitimat LNG plant in northern British Columbia that could see it nearly double in size to produce 18 million tonnes per year.

The companies submitted an application to the National Energy Board this week, with a revised plant design that may include up to three LNG trains, instead of two.

The Kitimat LNG application follows the approval last October of the massive LNG Canada project, which is also located in Kitimat. That project is headed by Royal Dutch Shell. It will initially produce 14 million tonnes per year. The plant will have the option to increase to 28 million tonnes per year.

Alberta Treaty Chiefs rescind support of Bill-C69 — April 1, 2019

Alberta Assembly of Treaty Chiefs announced that they are no longer supporting Bill C-69. The Assembly of Treaty Chiefs passed a resolution late last year in support of the Bill. They have now rescinded their support of the controversial federal bill which transform the way projects are assed and approved.

The Alberta Assembly of Treaty Chiefs stated that they see negative impacts of Bill C-69 on their economic development and self-determination, particularly as a result of weakened investment in the energy sector.

According to Indian Oil and Gas Canada figures, royalty monies for 39 oil-producing nations have fallen by $200 million annually since 2012, resulting in a loss of over $18,000 per on-reserve family of six, per year.

Chief Roy Fox of the Kanai Blood Tribe commented, "Bill C-69 has not yet passed but we are already suffering its consequences. The lack of pipeline capacity and investment have caused a huge price differential for the Blood Tribe's oil and gas development." He continued, "I don't care much when leaders and lawyers say the bill is actually good for us as First Nations. Not in the real world it isn't. Not for the Blood Tribe."

Another notable Indigenous leader,  Chief Roy Fox, Makiinima, commented, "The Liberal Government campaigned on its commitment to obtain social license for new projects. It asserted that only communities could grant permission. I will tell you now: I don't grant permission, and I don't have any confidence in Bill C- 69. I am fearful, and I am confident, that it will keep my people in poverty."

President Trump issues a new permit for Keystone XL — April 1, 2019

President Trump is attempting to kick start the Keystone XL pipeline project once again. This is his second try at getting the pipeline project rolling after it had been stalled by several district court interventions.

Trump had the permit issued Friday, March 30, 2019; it replaces the one granted in March 2017. The order is intended speed up development of the controversial pipeline, which would ship crude oil from tar sands in western Canada to the U.S. Gulf Coast.

First Nations consortium willing to buy Trans Mountain pipeline — March 29, 2019

A consortium of First Nations, headed by Thunderchild First Nation of Saskatchewan, are planning to offer the federal government $6.8 billion for a majority ownership of the Trans Mountain pipeline.

The Thunderchild First Nation is well advanced in securing the necessary capital and has been holding meetings with several banking intuitions and oil companies.

When questioned on the First Nation’s plan to buy the pipeline, Federal Finance Minister Bill Morneau stated that the government will not negotiate the sale of the pipeline until this summer when the construction of the project is “derisked”.

Alberta government eases crude oil restrictions — March 19, 2019

Alberta government has announced that it will ease crude oil restrictions by 25,000 barrels per day in May and another 25,000 barrels per day in June.

The Alberta government introduced its output cuts in January to curb a growing glut of oil. The original cuts were intended to reduce Alberta’s output by 325,000 barrels per day but actually maxed out at 200,000 barrels per day.

With the two coming easements, the government will still restrict Alberta’s oil production by 150,000 barrels per day. There has been no word as to when the restrictions will cease.

The oil restrictions may have served some purpose in easing the oil glut in the province. Most oil companies are against the restrictions and have openly complained.

Premier Rachel Notely is expected to call a provincial election in the next two months. Polls show that her NDP party is trailing the United Conservative Party by a wide margin.

National Energy Board releases its recommendations on optimizing crude oil movement   — March 18, 2019

Federal government requested for the National Energy Board to do a study on examining short and long term solutions to optimize crude oil movement to markets. The NEB released its report last week.

The NEB report recommends in the short term: (1.) Creating predictable timelines and clear policies related to pipeline capacity to help market participants make more informed decisions. (2.) Developing better market data to help market participants and policy makers make investment decisions.

For the long term, NEB suggests: (1.) Upgrade bitumen to a higher quality product to reduce the volume of diluent needed and open up space on existing pipelines. (2.) Reverse pipelines currently importing diluent to export more crude oil. (3.) Ship undiluted bitumen in rail cars to increase the volume of bitumen exported by rail. 

Jean-Denis Charlebois, Chief Economist, National Energy Board commented, "The oil pipeline systems are currently running at capacity and market players are operating within the rules set up in tariffs and legislation. This report points to potential improvements that can be made and we have identified options for governments to pursue."

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — May 16, 2019

ARC Resources Ltd. (ARX:TSX) announced a monthly dividend amount of $0.05 per share for June 17, 2019 to shareholders of record on May 31, 2019. The ex-dividend date is May 30, 2019. As at May 15, 2019, the trailing 12-month payments to shareholders total $0.60 per share.

Arc Resources is a Calgary based oil and gas company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. Company has a market cap of $3e.2 billion and approximately 354 million shares outstanding.

Jadestone Energy Inc. (JSE:TSX) announced on May 16th that all resolutions put to shareholders at the Company's Annual General and Special Meeting were duly passed. The shareholders of the company approved the adoption of amended articles of association, an amended 10% rolling stock option plan. Company also re-appointed Deloitte and Touche LLP as the company's auditors.

Paul Blakeley, President and CEO commented, “ I am delighted to have received the support of our shareholders in approving all proposals set forth in the AGSM. The amendments to our Stock Option Plan, and the introduction of the PSP, and RSP help create strong alignment between the interests of our employees with shareholders, and these changes underscore our transition towards UK best practices, following our successful equity placement and UK listing in 2018.”

Jadestone Energy Incorporated is a Singapore based oil and gas company. It has operations and assets in Australia, Vietnam and Philippines. Company has a market cap of $396 million and approximately 461 million shares outstanding.

Secure Energy Services Inc. (SES:TSX) announced that its Board of Directors has declared a dividend for the month of June 2019 of $0.0225 per common share payable on or about June 17, 2019 to shareholders of record on June 1, 2019. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).

Secure Energy Services Inc. is a Calgary based company which provides treatments and disposal services to the oil and gas industry. Company has a market cap of $1.5 billion and approximately 159 million shares outstanding.

Tidewater Midstream and Infrastructure Ltd. (TWM:TSX) announced on May 16th the voting results from its annual general and special meeting of shareholders held May 14, 2019 in Calgary, Alberta. All has been filed electronically and filed on SEDAR.

Tidewater Midstream and Infrastructure Limited is a Calgary based company engaged in providing infrastructure and natural gas storage facilities in North America. Company has a market cap of $447 million and approximately 331 million shares outstanding.

Torc Oil & Gas Ltd. (TOG:TSX) announced confirm that a dividend of $0.025 per common share will be paid on June 17, 2019 to common shareholders of record on May 31, 2019. The ex-dividend date is May 30, 2019, with payment to be made in cash or common shares at the election of the shareholder.

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.

Valeura Energy Inc. (VLE:TSX) announced on May 16th that its President and Chief Executive Officer, Sean Guest, has advised the company that he purchased a total of 20,000 common shares of no par value in the capital of the company at an average price of C$2.432 per share (approximately £1.878/share) on the Toronto Stock Exchange.

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.

Whitecap Resources Inc. (WCP:TSX) announced on May 16th that the Toronto Stock Exchange has accepted the notice of Whitecap's intention to commence a normal course issuer bid. Whitecap previously purchased an aggregate of 4,842,083 common shares at a weighted average price per share of $6.23 under a normal course issuer bid that runs between May 18, 2018 to May 17, 2019.

Whitecap Resources Inc. is a Calgary based oil and gas company with operations in western Canada. Whitecap has a market cap of $2.0 billion and approximately 414 million shares outstanding.

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Arrow Exploration Corp. (AXL:TS) announced on May 15th a preliminary results of the Rio Cravo Este-1 exploration well located on the Tapir Block in the Llanos Basin of Colombia in which Arrow holds a 50% beneficial interest.

The RCE-1 exploration well was spud on April 25th, 2019 and Arrow's petrophysical analysis of the LWD logs indicates 103 feet true vertical depth of oil pay in multiple conventional sandstone reservoirs within the C7, Gacheta and Ubaque formations. The RCE-1 well was designed to test the above-mentioned formations within a fault bounded structural closure. RCE-1 was drilled ahead of schedule and below budget reaching total depth approximately 19 days after spud. Arrow intends to complete and flow test RCE-1 with the Weatherford 839 rig currently onsite.

Bruce McDonald, President and CEO of Arrow, commented, "We're pleased to have encountered a number of potential pay zones within the targeted reservoirs with the Company's second exploration well drilled in Colombia. If testing proves positive, we anticipate the well should be on production by early June and appraisal locations are currently being assessed which would be drilled off the same pad as RCE-1."

Arrow Exploration Corporation is a Calgary based international oil and gas company with operations in Colombia's most active basins, including the Llanos, Middle Magdalena Valley and Putumayo Basin. Company has a market cap of $24 million and approximately 59 million shares outstanding.

Pipestone Energy Corp. PIPE:TSXV) announced on May 15th its Q1 2019 financial and operational results and a progress report on its 2019 development program. Company reported a revenue of $460,000 and a loss of $(4.3) million in the first quarter of 2019.

Company spent $9.1 million and drilled four gross (four net) wells at the 3-1 pad in the quarter. At Pipestone Energy’s 15-14 padsite, 3-1 padsite, and other production facilities, the company spent a total of $17.0 million to complete civil work, finish final fabrication, deliver all major equipment, and commence construction of on-site production facilities.

Since closing the successful merger with Blackbird on January 4th 2019, the company has met its critical development and capital expenditure milestones to achieve its 2019 exit production guidance of 14,000 to 16,000 boe per day for December 2019.

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

Southern Energy Corp. (SOU:TSXV) announced on May 15th that it has closed the sale of its oil and natural gas assets in Alberta for approximately $0.64 million. Disposition included assets in Southern Alberta that were producing approximately 40 boe per day of heavy crude oil in March 2019. The disposition, which was announced on April 25, 2019 and closed on May 2, 2019, makes Southern a truly U.S. pure play exploration and production company.

Ian Atkinson, President & CEO of Southern commented, "We are happy to have completed the sale of our Canadian assets that we inherited in December 2018 as part of the re-organization transaction of Standard Exploration. The sale of these assets focuses us on executing our business strategy in the Southeastern United States."

Southern Energy Corp. is a Calgary based oil and natural gas exploration and production company. Southern has a primary focus on developing conventional and unconventional light oil and liquids rich natural gas resources in the SE Gulf States of Mississippi, Alabama, and Louisiana. Company has a market cap of $20 million and approximately 204 million shares outstanding.

Surge Energy Inc. (SGY:TSXV) announced on May 15th that a cash dividend to be paid on June 17, 2019 in respect of May 2019 production, for the shareholders of record on May 31, 2019 will be $0.008333 per share. The dividend is an eligible dividend for the purposes of the Income Tax Act (Canada).

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.

More news on Oilpatch Review

Quote of the day

Kyle Chandler, “Opportunity does not knock, it presents itself when you beat down the door.”

Did you know?

About 2,500 years ago, the Chinese recognized that natural gas could be put to work. The Chinese piped the gas from shallow wells and burned it under large pans to evaporate seawater for salt. In the nineteenth century natural gas was used extensively in Europe and North America to light city streets, homes and businesses.

 

prices compiled and updated on a regular basis by Canadian Insight

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     WCS  / WTI

 Price Spread $18.65

  May 16, 2019

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