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Updated on Thursday, May 24, 2018

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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 success 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.

Kinder Morgan fed up with B.C.’s provincial government intervention and halts construction — April 9, 2018

Kinder Morgan announced that it has suspended its work on the TransMountain pipeline and has given an ultimatum that all legal challenges must be resolved before May 31, 2018.

Kinder Morgan Chairman Steve Kean stated, “We will be judicious in our use of shareholder funds. In keeping with that commitment, we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend."

Protestors on the west coast have received full support from the socialist provincial government of British Columbia. Despite federal government warning, the provincial  B.C. government is supporting environmental groups such as Green Peace, and is threatening to stop the pipeline by court action.

Federal Natural Resources Minister Jim Carr issued a statement after the Kinder Morgan announcement. The federal minister stated that that he will continue to consider all available options in having the pipeline project built. Jim Carr went on to conclude, “This is no time for any provincial government to be reckless with the financial well being of Canadians and for the fabric of the federation itself."

National Energy Board approves TransMountain realignment through Chilliwack — April 6, 2018

National Energy Board has approved the Trans Mountain Pipeline ULC's  variance application to alter the pipeline corridor of the Trans Mountain Expansion Project for 1.8 kilometers within the City of Chilliwack.

The NEB's decision to approve Trans Mountain's Chilliwack variance application now goes to the Federal Government. If approved, the detailed route approval process for the area in which this variance is located will be proceeding in the fall of 2018.

The NEB has approved nearly 66 per cent of the entire detailed route of the Trans Mountain Expansion Project. Detailed route hearings for the segment of the pipeline that include Chilliwack are scheduled for June and October, 2018.

ConocoPhillips selling its US oil assets and buying natural gas properties in the Montney — April 5, 2018

ConocoPhillips announced that it is selling off its oil assets in the US and buying natural gas properties in the Montney region of Alberta and British Columbia.

The Houston based company sold its Permian Basin properties in Texas for $250 million and is buying 35,000 acres of natural gas properties in northern Alberta and B.C. for $120 million.

The purchase adds to its already owned natural gas assets in Montney. It now owns 140,000 acres of natural gas properties in that region.

ConocoPhillips executive vice-president Al Hirshberg  stated that the company is planning a 12-well test pad to trial stacking and spacing in the Montney this year. It was also stated that the company’s main focus will be on infrastructure access and profit margins.

Al Hirshberg commented, “The problem with these Montney wells is they're so great that if you want to do a spacing and stacking test where you have a handful of wells, you've got to build quite a bit of infrastructure just to handle all the production that comes gushing out."

Al Hirshberg went on to say, "We'll start construction of those facilities this year and finish the construction next year. That'll get us into the next round of really solid data on Montney that will guide our development work.”

Did you know?


 Development of shale gas in Canada remains to be in its early stages directly due to low natural gas prices. Canadian activity in shale gas is primarily focused on the Montney and Horn River Basin plays of northeast British Columbia. Exploratory activities are also taking place at the Utica shale in Quebec, the Horton Bluff shale of New Brunswick and Nova Scotia, and the Colorado group of Alberta and Saskatchewan.



Our most recent ‘Shouts & Toots’  from the Oil Patch  — May 24, 2018

Cub Energy Inc. (KUB:TSXV) announced on May 24th an operations update. Company reported that it has commenced drilling of the North Yatskivska #3 well on the West Olgovskoye licence. The NY-3 well is planned to a total depth of 2,300 metres to evaluate several prospective horizons. The NY-3 well is funded through existing Kub-Gas cashflow.

This is a relatively new licence obtained in 2015 that is on strike to the producing Olgovskoye and Makeevskoye licences. The WO licence surrounds, but does not include, the existing Druzhelyubovskoe gas/condensate field, which has produced over 180 billion cubic feetof gas since 1979, from the same Moscovian and Bashkirian zones that produce in Kub-Gas' Olgovskoye and Makeevskoye licences.

Mikhail Afendikov, Chairman and CEO of Cub commented, "We are pleased to spud our first well on WO and anticipate shooting a 3D seismic program on the licence later in 2018 and into 2019 to further delineate further prospects."

Cub Energy Inc. is a US based international oil and gas company with operations in Ukraine. Company has a market cap of $12.6 million and approximately 314 million shares outstanding.

Hemisphere Energy Corporation (HME:TSXV) announced its financial and operating results for the three months ended March 31, 2018. Company reported it had increased its revenue by 48% to $3.4 million compared to the first quarter of 2017.

Company drilled three wells into its Atlee Buffalo G pool. Two of these wells will be converted to injectors to help re-energize new areas of the reservoir in advance of a significant summer drilling program. Hemisphere now produces over 300 bbl/d of oil from this pool, up from 30 bbl/d of oil a year ago. The Company is also planning further development in its Atlee Buffalo F pool, where oil production has grown to almost 500 bbl/d from 300 bbl/d a year ago.

Hemisphere Energy Corporation is a Calgary based producing oil and gas company focused on its operations in western Canada. Company has a market cap of $29 million and approximately 90 million shares outstanding.

Pattern Energy Group Inc. (PEGI:TSX) announced on May 24th that it has entered into an agreement for the sale of the company's operations in Chile, which principally consist of its 81 megawatt owned interest in the 115 MW El Arrayán Wind project , to affiliates of Arroyo Energy Investors for which Pattern Energy will receive cash consideration of $67.0 million.

El Arrayán Wind is located approximately 400 km north of Santiago on the coast of Chile. The facility commenced commercial operations in the second quarter of 2014 and approximately 70% of its production is contracted for sale through a long-term fixed-for-floating hedge with Minera Los Pelambres.

Pattern Energy Group Inc. is an independent power company which has a portfolio of 24 wind and solar power facilities in the United States, Canada and Japan. Company has a market cap of $2.3 billion and approximately 98 million shares outstanding.

PentaNova Energy Corp. (PNO:TSXV) announced it has filed its financial and operating results for the three months ended March 31, 2018. Company's net revenue generated from this asset has not been included in any "per barrel" pricing . Mariposa revenue, net of royalties, was $351,606 and $351,312 were realized for the three months ended March 31, 2018 and December 31, 2017, respectively. These revenue amounts were derived from net sales of 14,550 boe and 14,668 boe during the respective periods.

PentaNova Energy is a Vancouver based international oil and gas company. It has a market cap of $16 million and approximately 242 million shares outstanding.

ShaMaran Petroleum Corp. (SNM:TSXV) announced that TAQA Atrush BV, Operator of the Atrush Block, has received USD 34.4 million on behalf of the Atrush co-venturers from the Kurdistan Regional Government comprised of payments of USD 15.0 million for February 2018 crude oil deliveries from the Atrush license to the export market and of USD 19.4 million of the Atrush Feeder Pipeline Cost and Atrush Development Cost loan repayments. The latter constitutes payments for four months, which were due in the months February to May 2018.These funds will be shared between the Atrush co-venturers according to the terms of the agreements.

ShaMaran Petroleum Corp. is a Vancouver based and Kurdistan focused oil development and exploration company with a 20.1% direct interest in the Atrush oil discovery. Company has a market cap of $173 million and approximately 2.2 billion shares outstanding.

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Calfrac Well Services Ltd. (CFW:TSX) announced on May 22nd the tender results for Calfrac Holdings LP's previously announced tender offer with respect to its outstanding 7.50% senior notes due 2020 . The Tender Offer expired at 5:00 p.m., New York City time, on May 22, 2018.

According to information provided by Global Bondholder Services Corporation, the depositary and information agent for the Tender Offer, that approximately 80.76% of the outstanding principal amount of the Existing Notes, or $484,531,000, have been validly tendered and not validly withdrawn pursuant to the Tender Offer as of the Expiration Time.

All of the Existing Notes validly tendered and not withdrawn as of the Expiration Time will be accepted for purchase by the Company. The withdrawal deadline with respect to the Existing Notes has expired.

Calfrac is a Calgary based company which provides specialized oilfield services to exploration and production companies designed to increase the production of hydrocarbons from wells drilled throughout western Canada, the United States, Russia, Argentina and Mexico. Company has a market cap of $1.06 billion and approximately 144 million shares outstanding.

Frontera Energy Corporation (FEC:TSX) announced the closing of a U.S.$100 million revolving letter of credit facility. The Credit Facility will replace the company's current secured letter of credit facility, which has U.S.$81.9 million of used capacity as of March 31, 2018 and matures on June 22, 2018. The Credit Facility will allow Frontera to release collateral and reduce the company's cost of funds. The Credit Facility has a maturity date of May 17, 2020.

David Dyck, Chief Financial Officer, commented, "The new facility further strengthens our balance sheet, credit profile and long-term access to capital. This gives us great confidence as we continue to position ourselves for growth in 2018."

Frontera Energy Corporation is a Toronto based Canadian public company and a leading explorer and producer of crude oil and natural gas, with operations focused in Latin America. Company has a market cap of $1.9 billion and approximately 50 million shares outstanding.

SECURE Energy Services Inc. (SES:TSX) announced on May 22nd that the Toronto Stock Exchange has accepted for filing the company's notice of intention to make a normal course issuer bid and the automatic termination of the outstanding automatic share disposition plan. Secure may repurchase from time to time up to a maximum of 8,227,359 common shares, at such times and in such quantities as the company may determine, subject to applicable regulatory restrictions.

The period during which Secure is authorized to make purchases under the NCIB commences on May 28, 2018 and ends on May 27, 2019 or such earlier date as the NCIB is completed or is terminated at the Company's election.

The board of directors of Secure believes that the underlying value of the corporation may not be reflected in the market price of the Common Shares from time to time and that, accordingly, the purchase of common shares will increase the proportionate interest in the corporation of, and be advantageous to, all remaining shareholders of the corporation.

Secure Energy Services is a Calgary based company which owns and operates midstream infrastructure and provides environmental solutions and innovative products to upstream oil and natural gas companies operating in western Canada and certain regions in the United States. Company has a market cap of $1.35 billion and approximately165 million shares outstanding.

Zedcor Energy Inc. (ZDC:TSX) announced that effective May 25, 2018, Mr. Ian McKinnon will resign as President and Chief Executive Officer of Zedcor. After four months of working closely with the senior management team at Zedcor, Mr. McKinnon and the Board concluded that the executive team's restructuring efforts and strategic plan is effectively moving forward, and as such Mr. McKinnon is stepping back from an executive role and will remain as a member of the Board of Directors of Zedcor. The Board wishes to thank Mr. McKinnon for his efforts.

Effective May 25, 2018 Mr. Dean Swanberg will assume the role of Interim Chief Executive Officer of Zedcor.

Zedcor Energy Inc. is a Calgary based Canadian public corporation and parent company to Zedcor Energy Services Corp. Zedcor Corp. is engaged in the rental of surface equipment and accommodations to the Western Canadian Oil and Gas Industry. Company has a market cap of $13.6 and approximately 49 million shares outstanding.

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Today’s Inspirations

“Apply your mind to instruction and open your ears to knowledge when it speaks.”

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.



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     WCS  / WTI

 Price Spread  $18.65

  May 24, 2018

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