Canadian Insight

Online oil and gas magazine keeping investors informed ...

Updated on Thursday, September 24, 2020

Alberta’s Premier Jason Kenny is optimistic that oil industry will survive and flourish —September 17, 2020

Alberta’s Premier Jason Kenny stated that his government has not given up on east-west pipeline system that would carry Alberta oil to Saint John, New Brunswick.

The recent re-election of the Progressive Conservative government in New Brunswick and the new Conservative leadership of the Erin O’Tool has created more hope for the oil industry to revive and flourish .

The Alberta premier believes that the election of the Conservative government in Ottawa will make a significant difference to the state of the oil industry.

 Kenny went onto explain that the only reason why the Energy East Pipeline failed was because of the Notley NDP government in Alberta and the Trudeau Liberals in Ottawa. Both want the pipeline to fail.

 

 

Trans Mountain pipeline on schedule to be operational by end of 2022—September 16, 2020

Trans Mountain CEO Ian Anderson reported that the pipeline expansion is on budget and on schedule to open by the end of 2022.

The expansion will triple the capacity of the pipeline connecting Alberta’s central oil collection point at Hardisty with the west coast loading terminal in Greater Vancouver.

Last February it was announced that construction costs had risen from the original estimate of $5.2 million to $12.6 billion. This was mainly due to cost overruns from delays by protestors and legal challenges.

There are thirteen committed  oil producers who will be using the pipeline once it is completed.

 

 

Crude oil markets are expected to be stable for remainder of this year and improve in  2021 —August 10, 2020

According to HIS Markit Energy Advisory Service, global crude oil markets have stabilized and are expected to trade between $40 to $45 per barrel for the remainder of this year.

The renown advisory agency predicts that crude oil prices will begin to improve in the second half of 2021. It predicts that oil prices will rise by $5 to $7 next May and pass the $50 mark by mid-summer. 

Improved and more stable oil prices are expected to alleviate the pains in oil industry. Investment capital should once again return to the oil and natural gas sector by this time next year.

 

Keystone XL pipeline project faces more hurdles  — July 9, 2020

US Supreme Court has upheld a lower court ruling which temporarily blocks the continued construction of the Keystone XL pipeline project.

The setback underscores the continued legal delays in construction. Since the beginning of the announced project over a decade ago, environmental groups have thrown legal challenges.

TC Energy is still optimistic that the pipeline will be completed. The project on the Canadian side of the border is unaffected.

 

Canadian Oil Producers Association recommends federal government intervene in attracting more investment into the oil & gas industry  — June 8, 2020

CAPP announced today that it has asked the federal government to identify measures to support economic recovery while other global oil producers are still focused on battling the Covid-19 pandemic.

CAPP stated that Canada should take advantage of the opportunity as the country recovers at a much faster pace than other nations. Waiting longer will only increased global competition.

CAPP stated that the federal government should not overlook the economic contribution from the oil and gas industry. The oil and gas sector generates more than $100 billion in gross national product annually. It should be noted that this industry alone, produces a half million jobs across the country.

 

 

Irving Oil gets approval to source more crude oil from Alberta — May 5, 2020

Irving Oil has found a novel way of sourcing more crude oil from Alberta despite all the hurdles the Federal Liberal government in Ottawa has initiated. The biggest obstacle was stopping construction of Energy East Pipeline.

Irving Oil applied and received permission to have more oil shipped on foreign tankers. Western Canadian crude oil would be loaded onto tankers in Vancouver and then shipped through the Panama Canal and then onto Saint John, New Brunswick.

Irving stated that it would also be picking up western Canadian crude oil from Gulf Coast terminals in the southern US, whenever adequate supplies would be available. In the near future, it is anticipated that Keystone XL will be pumping more Western Canadian oil into the US Gulf terminals.

Keystone XL pipeline is currently under construction.  When completed, the oil pipeline will connect the collection terminal at Hardisty, Alberta with the key US Gulf oil terminals for exports.

Irving Oil had committed to build a $300 million oil terminal at Saint John. Initially, it was meant to be a shipping terminal for western Canadian oil. Now it will serve as an import terminal for the Irving refinery.

Irving Oil was one of the biggest supporters of the $15.7 billion dollar Energy East Pipeline which was proposed by TransCanada Corporation. It was to connect Western Canadian crude oil sources with the East Coast refineries.

 

Wet’suwet’ten Hereditary chiefs will sign agreement with government— May1, 2020

A joint statement from the governments and Wet’suwet’en people says that all parties have reached an agreement in implementing the rights and title of the First Nation.

This statement says that there is still much work ahead in the negotiations, including how all will work together.

This is all in the center of a dispute between some Wet’suwet’en people hereditary chiefs and the construction of the Coastal GasLink pipeline.

 

 

Keystone XL Pipeline gets a major boost from Alberta— April 1, 2020

Two major announcements were made in unison on March 31 in Calgary; one from TC Energy and one from Premier Jason Kenny of the Alberta government. 

Russ Girling, TC Energy President and CEO, stated in a news release that it would go ahead and begin building the Keystone XL pipeline when its safe for their employees.

Following the news release, Premier Jason Kenny and Russ Girling faced the media. Premier Kenny announced that his provincial government would contribute $1.1 billion (US) in a ownership agreement and would also offer $4.2 billion (US) in a credit facility

The pipeline company will be consulting with US and Canadian health authorities as to keep employees safe from the Covid-19 virus. Construction will begin immediately when instructed that it’s safe for all workers.

Russ Girling stated that TC Energy has reached agreements with multiple companies for service agreements which would guarantee 575,000 barrels per day for a 20 year period. The project holds 125,000 barrels per day in current contracts from Hardisty, Alberta.

The 1,210-miles (1,947-kilometres) pipeline project will be capable of safely delivering 830,000 barrels per day of crude oil from Hardisty, Alberta to Steele City, Nebraska where it will connect with TC Energy’s existing facilities to reach U.S. Gulf Coast refiners to meet critical needs for transportation fuel and useful manufactured products. With pre-construction activities underway, the pipeline is expected to enter service in 2023.

 

Worst crude oil crash in 29 years as Russia and Saudi Arabia attempt to grab a greater market share— March 9, 2020

OPEC and its main ally, Russia, seem to be parting their ways. Last week’s OPEC meeting in Vienna failed to reach an agreement. Both Russia and Saudi Arabia have made a U-turn and intend to step up their oil output. As a result, oil prices have plummeted by 30% in the past three days. Oil prices have fallen to the lowest since 1991.

It is possible that this is a coordinated attempt to stop US shale oil development by increasing global oil inventories and driving crude oil prices down. It is also possible that Russia has decided on its own to take its own course and not continue to cooperate with OPEC. 

Saudi Arabia and Russia are two of the three major oil players. There are possibilities that this is an attempt to stall or derail US shale oil development and progress. American oil production has surpassed Russia and Saudi Arabia. US  has pushed its way into the global markets.

The possibilities of the spread of the corona virus and its effect on the global economy and the global oil demand is adding to the market chaos. The introduction of the price war between Russia and Saudi Arabia is adding a significant component which the markets and investors have previously not expected.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — September 24, 2020

Calfrac Well Services Ltd. (CFW:TSX) announced on September 24th an amended recapitalization transaction which will improve economics and optionality for shareholders. Special meeting has been postponed to permit security holders to consider amended terms. Calfrac Board has rejected Wilks Brothers' offer and recommends that shareholders do not tender. Board has filed a directos' circular recommending against Wilks Brothers' offer.

The Wilks Brothers Offer is not in the best interests of Calfrac or its Shareholders. There is no reasonable prospect of the Wilks Brothers’ Offer being completed and it does not address the obligations under the Senior Unsecured Notes that rank in priority to Shareholders

Calfrac Well Services Ltd is a Calgary based company which provides specialized oilfield services, including hydraulic fracturing, coiled tubing, cementing and other well completion services to the oil and natural gas industries in Canada, the United States, Russia, Mexico and Argentina Company has a market cap of $400 million and approximately 145 million shares outstanding.

ShaMaran Petroleum Corp. (SNM:TSX) announced a corporate update. ShaMaran notes the movement in its share price and the market reports of an interest in the Company. Dr. Adel Chaouch , President and CEO of the Company confirms that ShaMaran has not received any expression of interest from Abu Dhabi National Energy Company (commonly known as TAQA) and wishes to specify that ShaMaran does not comment on market rumours and speculations.

ShaMaran Petroleum Corp. is a Vancouver based international company. It is a Kurdistan focused oil development and exploration company with interests in the Atrush oil discovery. Company has a market cap of $184 million and approximately 2.2 billion shares outstanding.

Vermilion Energy Inc. (VET:TSX) announced on September 24th that the company has prepared a response to the recent news from Total SA regarding their plans to convert the Grandpuits refinery in France to biofuels and bioplastics.

Vermilion estimates this will increase our transportation costs by approximately $20 million on an annualized basis, however we will continue to evaluate longer-term marketing options for this crude.

Vermilion has been operating in France for over 20 years and remains committed to its France business unit which it believes that it offers significant long-term value potential.

Vermilion Energy Inc. is a Calgary based international energy producer that seeks to create value through the acquisition, exploration, development and optimization of producing properties in North America, Europe and Australia. Company has a market cap of $4.4 billion and approximately 153 million shares outstanding.

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Gran Tierra Energy Inc. (GTE:TSX) announced an operational update. All dollar amounts are in United States dollars and production amounts are on an average working interest before royalties basis unless otherwise indicated. Per barrel of oil equivalent amounts are based on WI sales before royalties.

Gran Tierra's operations team has seamlessly restarted several field activities throughout the Company's Colombian portfolio. During the third quarter 2020 to date (July 1-September 21, 2020), production has averaged approximately 18,700 BOE per day. September 1-21, 2020, production has increased to an approximate average of 21,250 BOEPD.

Company's initiatives during the severe downturn of 2020 have been focused on portfolio optimization and the preservation of liquidity and value; with the recovery in oil prices, Gran Tierra is now pacing projects to allow the safe resumption of operations.

Gran Tierra Energy Inc. is a Calgary based with a focus on its operations in Calgary. Company has a market cap of $369 million and approximately 367 million shares outstanding.

Petroteq Energy Inc. (PQE:TSX) announced its revised terms to a proposed arrangement. Lender has exercised existing warrants of the company for gross proceeds to the company of US$68,045.07 which is being used by the company to pay accrued and unpaid interest on existing convertible debentures of the company.

Company intends to complete a shares for debt transaction, pursuant to which it will issue ‎‎363,636 ‎common shares in satisfaction of US$20,000 of indebtedness currently owed to an arm’s length ‎service ‎provider.‎

The foregoing transactions are all subject to completion and execution of definitive agreements and all necessary approvals, including the approval of the company’s board of directors and the approval of the Exchange.

Petroteq Energy Incorporated is a California based oil and gas company with operations in US. Company has a market cap of $19.2 million and approximately 203 million shares outstanding.

TransAtlantic Petroleum Ltd. (TNP:TSX) announced that the company has entered into an Amended and Restated Loan and Security Agreement. On September 22, 2020, the Company entered into an Amended and Restated Loan and Security Agreement with Dalea Investment Group, LLC. The A&R Loan Agreement amends and restates that certain Loan and Security Agreement, dated as of August 7, 2020 by and between the company and the lender.

The A&R Loan Agreement are substantially similar to those of the Loan Agreement.

Trans Atlantic Petroleum Ltd. Is an international oil and gas company based in Hamilton, Bermuda. Company has operations and holdings in Turkey and Bulgaria. Company has a market cap of $19 million and approximately 62 million shares outstanding.

Tidewater Midstream and Infrastructure Ltd. (TWM:TSX) announced on September 23rd that its Board of Directors has declared a dividend for the third quarter 2020 of $0.01 per common share payable on or about October 30, 2020 to shareholders of record on September 30, 2020. The ex-dividend date is September 29, 2020. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).

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.

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Africa Energy Corp. (AFE:TSX) announced on September 22nd that it has successfully completed the book-building for the previously announced equity issue of common shares in the company. Closing of the Private Placement is expected to occur on or about September 30, 2020. The net proceeds from the Private Placement are expected to be used to finance the increased funding obligations from the ongoing drilling program of up to three exploration wells on Block 11B/12B offshore South Africa.

Africa Energy Corp. is a Canadian oil and gas company with exploration assets offshore South Africa and Namibia. Company is based in Vancouver. Africa Energy has a market cap of $419 million and approximately 472 million shares outstanding.

Blacksteel Energy Inc. (BEY:TSX) announced that Jeff Callaway has been appointed as the new President and CEO and as a Director of Blacksteel Energy Inc. Mr. Callaway brings 20 years of experience in the financial markets, a broad and deep suite of relationships in the energy sector and has been a shareholder of Blacksteel since inception. He has been a Director, President and CEO of a variety of entities and is the current CEO of High Ground Cannabis Inc.

Mr. Callaway takes over from Interim CEO Les Treitz. Mr. Callaway and the Board of Blacksteel thank Mr. Treitz for his years of service and appreciate his continuance as a Director of Blacksteel.

Blacksteel Energy Inc. is a Calgary based oil and gas company with operations in western Canada. Company has a market cap of $7.58 million and approximately 36 million shares outstanding.

Bonterra Energy Corp. (BNE:TSX) announced that the company acknowledges receipt of the unsolicited offer from Obsidian Energy Ltd. to purchase all the issued and outstanding common shares of Bonterra. The offer is open for 105 days and there is no immediate need to take any action.

Bonterra's board of directors has put together a committee of independent directors to review and evaluate Obsidian's offer.

Bonterra Energy Corp. is a Calgary based conventional oil and gas producer with operations in Alberta, Saskatchewan and British Columbia. Company has a market cap of $228 million and approximately 33 million shares outstanding.

More news on Oilpatch Review

Quote of the day

Natalie Wood, “The only time a woman really succeeds in changing a man is when he's a baby.”

 

 Did you know?

  Liquefied Natural Gas (LNG) is natural gas that has been cooled to -162°C and becomes a liquid allowing it to be safely transported over long distances in special tankers. Natural gas in its liquid state is neither combustible or, explosive. LNG occupies 1/600 the space of natural gas in its gaseous state.

 

 

prices compiled and updated on a regular basis by Canadian Insight

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Victoria

Vancouver

Calgary

Edmonton

Saskatoon

Regina

Brandon

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Hamilton

Ottawa

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Halifax

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St. John’s

 

 

$ / liter

 

1.299

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0.979

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1.069

1.029

0.999

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1.099

0.979

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1.089

 

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     WCS  / WTI

 Price Spread $8.10

  September 24, 2020

Text Box: Cross Canada  Gasoline Prices
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