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Updated on Tuesday, June 19, 2018



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Study shows carbon market is chasing away jobs at a big cost — June 13, 2018

Montreal Economic Institute has conducted an extensive study on government attempts to lower carbon emissions. The report concludes that there has been no impact on lowering greenhouse gases and that only jobs have been lost.

The study looked at three major areas where governments took action to reduce the use of hydrocarbons. The provinces of Ontario and Quebec were the focus on in Canada while the state of California was looked at in the US.

The study concluded that regardless of the amount hydrocarbons were taxed, the effect was insignificant  in reducing greenhouse gases. Demand and use of hydrocarbons remained the same. Higher prices on hydrocarbons only drove away jobs as employers attempted to cut costs.

Germain Belzile, author of the report states, "If the goal of the governments of Quebec and Ontario is to address the problems caused by climate change, then they should take a global approach. If such an approach, or one that at least encompasses North America, is not feasible, we should just put our trust in technological progress and innovation. We would reach our objectives just as quickly, and there would be a lot less waste.”

Joint Review Panel to study a proposed new oil sands project — June 7, 2018

Teck Resources Limited has submitted a proposal to the National Energy Board for construction of a 260,000 barrels per day oil sands mining operation near Fort McMurray.  

The proposal, “Frontier Oil Sands Mine Project”, will be reviewed by the Joint Review Panel whether Teck Resources has submitted enough information to hold public hearings.

If information submitted is adequate, the Joint Review Panel may begin public hearings as early as this coming September.  Submissions will be accepted from those concerned to hold hearings at specific locations.

Hearings will be open to the public and can be observed through a live webcast during the proceedings.

PETRONAS enters into agreement to purchase part ownership — May 31, 2018

PETRONAS has announced that its wholly owned entity, the North Montney LNG Limited Partnership, has entered into a Purchase and Sales Agreement for an equity position in the LNG Canada project in Kitimat, British Columbia.

Pending upon regulatory approval, PETRONAS will take a 25% ownership in the LNG project. No disclosure was made as to the purchase price but several reliable sources have stated that PETRONAS is willing to invest up to $31 billion in the project. The transaction is expected to be completed in several months.

 PETRONAS President and Group Chief Executive Officer Tan Sri Wan Zulkiflee Wan Ariffin commented, ""PETRONAS is pleased to be part of the LNG Canada project. As one of the world's largest LNG producers, PETRONAS looks forward to adding value to this venture through our long-term expertise and experience across the LNG value chain. We are committed to deliver LNG and natural gas, the cleanest fossil fuel in the world, to the growing global energy market."

PETRONAS is a Malaysian oil and gas company founded in 1974. Petronas has grown to be an integrated international oil and gas company with business interests in 35 countries. It is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining, marketing and distribution of petroleum products.

Federal government buys out Trans Mountain expansion project— May 29, 2018

Kinder Morgan announced that its has sold its Trans Mountain pipeline project for $4.5 billion to the Canadian government.

The pipeline expansion project will now become a crown corporation and Kinder Morgan will immediately continue with construction while its board seeks a third party buyer within the next several months. Alberta’s Premier Knotely has already voiced that provinces interest in part ownership.

Kinder Morgan will continue to operate its strategic infrastructure assets which includes the pipeline which has already been in service, the storage and all loading facilities in Edmonton and Vancouver

Federal Energy Minister Jim Carr stated that government has decided to temporarily take ownership of the project to assure that the project will be completed.

Alternate northern Canadian oil pipeline in the works — May 7, 2018

CEO of a private Indigenous company announced last week that the company is working on a plan to construct a northern pipeline from Fort McMurray to the northern Pacific coast.

Calvin Helin, CEO of Eagle Spirit Energy, and his company believes that they have a better pipeline alternative. He feels that it will be more acceptable to the public and the northern land owners.

The private Indigenous company has studied the route for over five years. Pending the outcome and the challenges to Bill C-48, the pipeline could be built through northern British Columbia to the coast near Grassy Point , or take the route from Fort McMurray into the Yukon and then in through Alaska.

Helin went on to explain why their plan has two different routes. The federal Liberal government may set a road block with new legislation dealing with the northern BC coastal waters.

Bill C-48 was introduced last year by federal Liberal government of Justin Trudeau and is in the final reading this week. If passed, it could stop all oil tanker traffic through the northern west coast of British Columbia..

Calvin Helin stated that an Indigenous group is ready to challenge Bill C-48 in B.C.’s Supreme Court should it pass and become law. He stated that the federal government did not consult with northern British Columbia’s Indigenous  people.

Should all legal challenges and avenues fail, his company already has an alternate route planned. Eagle Spirit Energy has signed a memorandum with land owners across the route in the northern US state.

Helin stated that landowners in Alaska and the town of Hyder are very receptive to the construction of the pipeline and the establishment of an oil tanker terminal near Hyder, Alaska..

When asked about how the pipeline and tanker terminal would be financed, Calvin Helin replied that his company is backed by a financial investment group in Vancouver and it is welling to spend up to$16 billion on the 1600  kilometer pipeline project and terminal.

Conference Board of Canada reports that tide is turning for the Canadian oil and gas industry — April 12, 2018

Rising crude oil prices are about to bring back optimism to the Canadian oil industry. Expectations are that higher oil prices will also bring back profitability.

The single largest obstacle to the oil industry’s suc cess remains constrained pipeline capacity and limited capability to expand export markets.

Total crude production in Canada is forecast to rise by an average annual rate of 3.4 per cent between 2018 and 2022. The vast majority of that increase will come from the oil sands, while offshore production and diluent production will make up the remainder.

While oil prices and production are expected to rise, industry revenues are forecast to increase by about 8 per cent in 2018. Costs will inevitably rise, as firms will require more materials and investments to sustain operations. However, employment gains will be modest, and efficiency and cost-containment remain at the forefront of the industry's priorities. This should allow the industry to be profitable this year, after suffering losses for three years in a row. Industry pre-tax profits are expected to reach $1.4 billion this year.

Michael Burt, Director with The Conference Board of Canada commented, "The industry has managed to turn the tide on the downturn it has been experiencing since 2014, but the landscape is changing rapidly. New pipelines that provide access to tidewater will be crucial for Canada to develop new export markets given that Canada's biggest export market for oil, the United States, is ramping up its own production.

NEB issues its first ever report on Canadian refineries — April 11, 2018

The National Energy Board released its first ever report on Canadian refineries. It appears that the NEB is justifying why eastern Canada is continuing to import foreign oil

NEB says that only 30% of all Canadian crude oil produced is refined by Canadian refineries. The federal government institution says that most of Canada’s refineries are situated close to where there is an abundant source of crude oil. Most of the refineries were never configured to process heavy oil from the oil sands.

NEB report goes on to say:

Refineries in central and eastern Canada were constructed to process medium and light oils. This is the main reason that light oil is imported to these refineries.

Some Canadian refineries are now increasing to process Canadian crude oil, this includes heavy oil from the oilsands. Unfortunately, foreign oil imports will continue to supply requirements for central and eastern Canada.

Canada has 14 full refineries and two asphalt refineries with a total refining capacity of 295 thousand cubic meters per day or 1.9 million barrels per day.

  

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — June 19, 2018

Crescent Point Energy Corp. (CPG:TSX) announced on June 19th a corporate update. Company reported changes to its executive management team and provides an update on recent dispositions. Company reported that Mr. Ryan Gritzfeldt has assumed the role of Chief Operating Officer. Mr. Neil Smith, Chief Operating Officer, and Ms. Tamara MacDonald, Senior Vice President, Corporate and Business Development, have stepped down as officers of the company.

Crescent Point also announces it has entered into definitive purchase and sale agreements to dispose of certain non-core assets in the Williston Basin for proceeds of approximately $280 million. These transactions include both the disposition previously announced on May 3, 2018, where the Company announced it signed a non-binding letter of intent for approximately $225 million, along with a second transaction agreed to in late second quarter, valued at approximately $55 million. These transactions are each expected to close at the end of second quarter.

Crescent Point Energy Corp. is a Calgary based oil and gas company with operations in Canada and USA. Company has a market cap of $5.2 billion and approximately 549 million shares outstanding.

Enerplus Corporation (ERF:TSX) announced that a cash dividend in the amount of CDN$0.01 per share will be payable on July 16, 2018 to all shareholders of record at the close of business on June 29, 2018. The ex-dividend date for this payment is June 28, 2018. Dividends paid by Enerplus are considered an "eligible dividend" for Canadian tax purposes.

Enerplus Corporation is a Calgary based oil and gas producer with operations in Canada and USA. Company has a market cap of $3.8 billion and approximately 245 million shares outstanding.

Journey Energy Inc. (JOY:TSX) announced that subsequent to its Annual and Special Meeting of shareholders Mr. Ruilin Zhang to the Board of Directors received insufficient votes for being reelected. Mr. Zhang has submitted his resignation as is required under Journey's Majority Voting Policy.

Journey Energy Inc. is a Calgary based oil and gas company with operations in western Canada. Company has a market cap of $70 million and approximately 39 million shares outstanding.

TAG Oil Ltd. (TAO:TSX) announced on June 19th has completed its independent reserves assessment on the Company's producing oil and gas assets within the Cheal (PMP 38156), Cheal East (PEP 54877) and Sidewinder (PMP 53803) permits in New Zealand. This report is dated and is effective as at March 31, 2018.

ERCE Equipoise Ltd. has assigned a pre-tax net present value of $97 million (FY2017: $82 million), using a 10% discount rate to the Company's net working interest proven plus probable ("2P") reserves.

Toby Pierce, CEO commented, "I am pleased with the reserves and resources that were added due to the waterflood program at the Cheal East permit. We continue to be encouraged by the potential increase in the overall field recoveries from the waterflood. I am also pleased with the increase in 2P NPV 10% after tax valuation to $96.1 million that was up from $78.3 million in the previous year despite the drop to US$68/b from US$70/b in ERCE's long term Brent oil price forecast year on year."

TAG Oil is a Calgary based oil and gas company with assets and operations in New Zealand and Australia. Company has a market cap of $32 million and approximately 85 million shares outstanding.

                                       * * * * * * *  

Baytex Energy Corp. (BTE:TSX) and Raging River Exploration Inc. (RRX:TSX) announced on June 18th that their respective boards of directors have unanimously agreed to a strategic combination of the two companies . The combined organization will have an enterprise value of approximately $5 billion and operate under the Baytex name.

Transaction is subject to approval by the shareholders of both companies, the Court of Queen’s Bench of Alberta and certain regulatory and other authorities, and is subject to the satisfaction or waiver of other customary closing conditions. The Transaction is anticipated to close in August 2018.

Baytex Energy Corp is a Calgary based oil and gas company with assets and operations in Canada and USA. Company has a market cap of $1.06 billion and approximately 237 million shares outstanding.

Bonavista Energy Corporation (BNP:TSX) announced that a quarterly dividend of $0.01 per common share will be paid in cash on July 16, 2018 to common shareholders of record on June 29, 2018. The ex-dividend date is June 28, 2018.

Bonavista's dividend policy is reviewed quarterly and is based on future commodity prices, foreign exchange rates, our commodity hedging program, current operations and future investment opportunities. This dividend has been designated as an "eligible dividend" for Canadian income tax purposes.

Bonavista is a Calgary based company focused on efficient development of high quality oil and natural gas assets. Company has a market cap of $365 million and approximately 253 million shares outstanding.

East West Petroleum Corp. (EW:TSXV) announced a corporate update. Company reported that Mr. David Sidoo, President and CEO, announces that the Company has appointed Mr. Curtis White to the Board effective immediately. Mr. Curtis White has more than 15 years of experience working in media, tech, mining and oil & gas.

Company also reports that Mr. David Taylor has tendered his resignation as a director but will continue to work with the company in an advisory capacity and will serve on the company's Advisory Board providing advice and oversight for the company's oil and gas operations.

East West Petroleum Corp. is a Vancouver based international company with a focus on its developing assets in New Zealand and Romania. Company has a market cap of $90 million and approximately 9.9 million shares outstanding.

Enbridge Income Fund Holdings Inc. (ENF:TSX) announced that its Board of Directors has declared a cash dividend of $0.1883 per common share to be paid on July 16, 2018 to shareholders of record at the close of business on July 3, 2018. This dividend is designated eligible dividends for Canadian tax purposes that qualify for the enhanced dividend tax credit.

Enbridge Income Fund Holdings Inc. is a Calgary based corporation. It indirectly holds high quality, low-risk energy infrastructure assets. Company has a market cap of $5 billion and approximately 175 million shares outstanding.

Permex Petroleum Corporation (OIL:CNX) announced on June 18th that it is on schedule to mobilize a workover rig and crew to the Pittcock North Tannehill Unit (situated in Stonewall, Texas) next week to commence the Enhanced Oil Recovery program within the Upper and Lower Tannehill formation. Once the workovers are finalized the initial project will be a water flood utilizing two injection wells and five active receiver wells. The primary rationale for waterflooding an oil reservoir is to encourage oil production, helping increase pressure and oil movement to ultimately enhance recovery.

Permex Petroleum is a Vancouver based junior Oil & Gas company with assets and operations across the Permian Basin of west Texas and the Delaware Sub-Basin of south east New Mexico. Permex has a market cap of $14 million and approximately 36 million shares outstanding.

SDX Energy Inc. (SDX:TSX) announced on June 18th that a gas discovery has been made at its SD-4X well in the South Disouq Concession, Egypt (SDX 55% working interest and operator). The SD-4X well was drilled to a total depth of 7806 feet and encountered 89 feet of net conventional natural gas pay in the Abu Madi horizon, which had an average porosity in the pay section of 24%. The well came in on prognosis with a reservoir section of similar quality but thicker than the original SD-1X discovery well.

The well will be completed as a producer in the Abu Madi and then tested after the drilling rig has moved off location. The testing is anticipated to commence between 30 and 45 days after the rig departs, depending on the availability of testing equipment

SDX is an international oil and gas exploration, production and development company, headquartered in London, England. Company has a market cap of $215 million and approximately 205 million shares outstanding.

                                      

More news on Oilpatch Review

Today’s Inspirations

“There is no right way to do the wrong thing.”

Quotes are directly taken from a book entitled, ‘Phrase A Day Inspirations’, written by Bernie Shimko. ‘Canadian Insight’ wishes to thank Bernie and his wife Adeline for permitting the use of their inspiring quotes.

 

Did you know?

 

The Hibernia Platform is the largest production and drilling platform on record. It is equipped with two ‘state of the art’ drilling rigs. The platform weighs over 600,000 tonnes before ballast and oil is placed in storage. It stands 735 feet high. It provides accommodation facilities for a work crew of 185 people. Top side facilities are capable of producing 230,000 barrels of crude oil per day. The base features storage facilities of 1.3 million barrels of oil and is equipped to load oil tankers.

 

prices compiled and updated on a regular basis by Canadian Insight

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Victoria

Vancouver

Calgary

Edmonton

Saskatoon

Regina

Brandon

Winnipeg

Hamilton

Ottawa

Toronto

Montreal

Halifax

Moncton

St. John’s

 

 

$ / liter

 

1.559

1.529

1.239

1.219

1.219

1.229

1.269

1.269

1.309

1.249

1.329

1.369

1.309

1.309

1.399

 

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     WCS  / WTI

 Price Spread  $23.15

  June 19, 2018

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