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Updated on Friday, July 20, 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  — July 20, 2018

Blackbird Energy Inc. (BBI:TSXV) announced on July 20th an operational update including planned drilling activity, an update on infrastructure build out and the continued progression of its development planning.

Blackbird has completed the construction of its 9-14 pad-site and expects to spud its first well from this location in early August. The company has contracted a rig for the drilling of 7 (7.0 net) Montney wells and 2 (2.0 net) water disposal wells north of the Wapiti River, all of which are expected to be drilled and completed before June 2019.

Blackbird expects to commence the construction of its gas management site located at 5-14-071-07-W6M in the Dimsdale area in the fall of 2018. Blackbird has already secured the surface rights to all lands related to the gas management site.

Blackbird continues to advance its development plans and has acquired 16 pad sites, surveyed an additional 6 pad sites and licensed 29 Montney wells, including 14 licenses north of the Wapiti River.

Blackbird Energy Inc. is a Calgary based oil and gas exploration and development company focused on the condensate and liquids-rich Montney fairway at Pipestone/Elmworth, near Grande Prairie, Alberta. Company has a market cap of $292 million and approximately 749 million shares outstanding.

Canadian Natural Resources Limited (CNQ:TSX) announced on July 20th an operations update for the Jackpine and Muskeg River mines at the Athabasca Oil Sands Project. Company reports that the AOSP has achieved a mined production milestone of 1 billion barrels since operations began in 2003.

Canadian Natural has a 70% working interest in the AOSP along with Chevron Canada Limited (20%) and Shell Canada Limited (10%).

Canadian Natural’s President Tim McKay commented, “This is a significant milestone and demonstrates the size and scale of Canada’s oil sands mining operations. The oil sands, through responsible development, provide sustainable long life low decline production and significant value for stakeholders. This milestone could not have been achieved without the dedication of the employees and contractors who focus on safe, reliable operations, while minimizing our environmental footprint to ensure long term sustainable development.”

Canadian Natural is a Calgary based oil and natural gas production company, with continuing operations in its core areas located in Western Canada, the U.K. portion of the North Sea and Offshore Africa. Company has a market cap of $56.5 billion and approximately 1.22 billion shares outstanding.

Eagle Energy Inc. (EGL:TSX) announced on July 20th its strategy of reducing debt and interest charges, Eagle is pleased to announce it has signed an agreement to sell its entire interest in its oil and natural gas properties near Twining, Alberta to a third party for cash consideration of $13,820,000 before customary post-closing adjustments. The sale is expected to close on or about August 28, 2018, subject to customary closing conditions.

Eagle intends to use the net proceeds from the Sale to reduce outstanding debt under its secured term loan and to further fund its North Texas development program. The sale is expected to reduce leverage, increase corporate netback per barrel of oil equivalent and lower its corporate decline rate.

Eagle is an oil and gas based in Calgary. It owns petroleum producing properties with development and exploitation potential in Alberta, Texas and Oklahoma. Company has a market cap of $16 million and approximately 44 million shares outstanding.

ShaMaran Petroleum Corp. (SNM:TSX) announced that as an operator of the Atrush Block, has received USD 13.7 million on behalf of the Atrush co-venturers from the Kurdistan Regional Government comprised of payments of USD 8.9 million for April 2018 crude oil deliveries from the Atrush license to the export market and of USD 4.9 million of the Atrush Feeder Pipeline Cost and Atrush Development Cost loan repayments which were due in July 2018.These funds will be shared between the Atrush co-venturers according to the terms of the agreements.

ShaMaran Petroleum Corp. is a Kurdistan focused oil development and exploration company based in Vancouver. Company has a market cap of $259 million and approximately 2.15 billion shares outstanding.

                                       * * * * * * *

Ensign Energy Services Inc. (ESI:TSX) announced on July 19th that it has scheduled to release its second quarter 2018 results before the markets open on Tuesday, August 7, 2018. A conference call and webcast has been scheduled for 2:00PM MDT (4:00PM EDT) on Tuesday, August 7, 2018. A live webcast of the conference call can be accessed via Ensign's website and an archived version of the call will be available shortly after the call ends.

Ensign is an oilfield services company, headquartered out of Calgary, Alberta, operating in Canada, the United States and internationally. Company has a market cap of $899 million and approximately 157 million shares outstanding.

Frontera Energy Corporation (FEC:TSX) announced on July 19th that its second quarter 2018 results will be released after market on Thursday, August 2, 2018 followed by a conference call and webcast for investors and analysts on Friday, August 3, 2018 at 8:00 a.m. (MDT), 9:00 a.m. A presentation will be available on the Company's website.

Frontera Energy Corporation is a 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 100 million shares outstanding.

Kinder Morgan Canada Limited (KML:TSX) announced on July 19th that its board of directors has declared a dividend for the second quarter of 2018 of $0.1625 per restricted voting share ($0.65 annualized), payable on August 15, 2018, to restricted voting shareholders of record as of July 31, 2018. KML's restricted voting share dividends are eligible dividends for Canadian income tax purposes.

Kinder Morgan Canada Ltd is a Calgary based company which owns and operates pipelines for transport of natural gas. Company has a market cap of $1.7 billion and approximately 104 million shares outstanding.

Surge Energy Inc. (SGY:TSX) announced the appointments of Ms.Marion Burnyeat and Ms. Allison Maher to the Board of Directors effective July 16, 2018. Ms. Burnyeat is an experienced businesswoman having spent nearly thirty years in the energy sector primarily with Spectra Energy Corporation and its predecessor companies. Ms. Maher is an independent businesswoman with a background in finance, tax and wealth management.

Surge Energy Inc is a Calgary based company engaged in the exploration, development, and production of oil and gas from properties in western Canada. Company has a market cap of $562 million and approximately 230 million shares outstanding.

Tervita Corporation (TEV:TSX) and Newalta Corporation (NAL:TSX) and July 19th that they have today closed their previously announced business combination, which was completed by way of a plan of arrangement. The newly merged company will operate under the name Tervita Corporation.

Tervita is a leading environmental solutions provider which is headquartered in Calgary Company will start trading on the TSX under the symbol 'TEV' and 'TEV.WT' next week.

                                      
 
More news on Oilpatch Review

Today’s Inspirations

“In the presence of trouble some buy crutches while others grow wings..

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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     WCS  / WTI

 Price Spread  $26.25

  July 20, 2018

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