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Updated on Thursday, November 23, 2017



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Keystone XL Pipeline passes final hurdle — November 20, 2017

After nine years of uncertainty and road blocks, TransCanada Corporation has all of the necessary approvals to build the Keystone XL Pipeline.

The Nebraska Public Service Commission has approved the 830 million barrel per day pipeline project. It is reported that TransCanada will have to adhere to an alternate route than the one initially submitted. The route takes a longer distance and will be more expensive to build. It is not known whether TransCanada will pursue due to the extra costs.

Nebraska was the last state to hold out on a decision and held the most resistance from landowners and environmentalists.

The decision came just four days after TransCanada reported a 5,000 barrel leak in northeastern South Dakota. Indications are that the pipeline leak may have been a result of sabotage and a last ditch effort to thwart the project.

Russ Girling, TransCanada's president and chief executive officer, commented, “As a result of today's decision, we will conduct a careful review of the Public Service Commission's ruling while assessing how the decision would impact the cost and schedule of the project.”

 

Climate Plans a financial burden with little  results or benefits — November 16, 2017

A comprehensive study, conducted for the renown Frasier Institute, concludes that federal and provincial government climate plans will be of little or no benefit  and at a huge costs to the public.

The study points out Alberta’s climate action plan as one example; it’s the most expensive in Canada, and is projected to cost $5.4 billion over the next three years. That works out to  an average of $3,600 per household in Alberta.

Another example, Ontario's ‘Cap and Trade Program’ , which is expected to cost $1.9 billion a year (or $365 per household annually). This is in addition to increased hydro costs which are  highest in the country. This is largely because of Ontario's Green Energy Act.

The study concludes that climate action plans will be very costly and will likely yield much fewer environmental benefits than projected.  They all share flawed features based on energy efficiency programs (so-called green building codes), electric car subsidies and renewable power schemes (solar, wind, etc.). These have all fallen short of their projected benefits in countries that have implemented similar policies and programs

Kenneth Green, Fraser Institute's senior director of energy and natural resource studies, concluded, "Across the country, ineffective climate policies will cost taxpayers billions with little to show for it. Policymakers cannot use theoretical models to justify the benefits of climate action initiatives and then ignore all the characteristics of such models when designing actual policy."

 

Syncrude soon to change top executive position — October 27, 2017

Syncrude Canada limited announced that it will soon be changing its top management executive. President and CEO Mark Ward will be retiring on December 11, 2017 and will be replaced by Doreen Cole.

Mark Ward has worked for over 40 years in the oil and gas industry around the world. He has been employed by oil and gas companies in United States, Venezuela, Indonesia, Qatar, Nigeria and Canada.

Ward commented, “  The oil sands is an exciting and challenging business. But the quality of people here is what stands out and that's what I'll miss most. There are many examples of employees pulling together to meet a common goal, but I'm most proud of how Syncrude responded during the 2016 wildfire. As an organization, Syncrude employees showed their commitment to doing what's right by supporting each other and our communities while also protecting our business through a successful safe park and subsequent restart."

The soon to be CEO and President, Doreen Cole,  has most recently been employed as Suncor's Senior Vice President, Regional Maintenance and Reliability, based in Fort McMurray. She began working for Suncor in 2014 and prior to that was employed by EPCOR's Electricity division in Edmonton.

Syncrude was formed as a research consortium in 1964. Construction at the Syncrude site began in 1973  and production began initial production in 1978. Present participating partners are Imperial Oil Ltd., Mocal Energy Ltd., Nexen Oil Sands and Sinopec Oil Sands Partnership and Suncor Energy Inc.

 

Energy East Pipeline and Eastern Mainline projects terminated — October 5, 2017

TransCanada Corporation announced  that it will no longer proceed with the proposed Energy East pipeline and Eastern Mainline projects.

TransCanada President and Chief Executive Officer Russ Girling stated, "After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications."

Girling went on to say, “We appreciate and are thankful for the support of labor, business and manufacturing organizations, industry, our customers, Irving Oil, various governments, and the approximately 200 municipalities who passed resolutions in favor of the projects. Most of all, we thank Canadians across the country who contributed towards the development of these initiatives.”

The TransCanada President concluded , “ We will continue to focus on our $24 billion near-term capital program which is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an eight to 10 per cent range through 2020.”

 

Trades Unions hold  federal and Quebec government responsible for Energy East pipeline termination — October 5, 2017

Canadian trades unions are holding the Trudeau Liberals and Quebec’s Couillard government responsible for the termination of the Energy East pipeline and eastern Mainline projects.

Robert Blakely, Canadian Operating Officer of Canada's Building Trades Unions, stated today in Ottawa that the Building Trades regrets the opportunities that have been lost in Atlantic Canada, Québec, Ontario and on the Prairies. He went on to say, “What have been lost are high quality, high paying jobs in all of those regions on the construction of this world-class, nation building project.”

Robert Blakely concluded, “It is clear that Canada needs and wants a regulatory system that is second to none and most of us thought that we had that. If we have a way to deal with our issues perhaps we need to stick to that. We do not need to have the rules of the game to be changed in midstream. That is neither fair nor appropriate; we ought not to ask a proponent to take a multi-billion-dollar gamble on a process that changes simply because a dog barked on Upper Teacup Road.”

 

Competition Bureau continuing to review Pembina / Veresen merger — October 3, 2017

According to Canada’s Competition Bureau, the announced merger between Pembina Pipeline Corporation and Veresen Incorporated is not yet final. The government body stated that it intends to review the merger on its merits.

The Competition Bureau stated that it will be focused on the parties' ethane transportation assets in Canada. The government agency has one year to review the merger. Should it find  a substantial lessening or prevention of competition, the Bureau will take action where appropriate.

If the Bureau determines that a merger is likely to substantially affect competition, it may apply to the Competition Tribunal for an order to, among other things,  sell certain assets to remedy the harm to competition.

 

Osum Oil Sands  plans to quadruple bitumen production — October 2, 2017

A private oil sands producer, based in Calgary, has announced that it plans to increase its activity in northern Alberta and begin a new project.

Osum Oil Sands stated that it has raised enough capital to accelerate its bitumen production from the present 3,000 barrels per day to 12,000 barrels per day by 2019.

Osum stated that it has raised $500 million in investments and received $92.5 million from an undisclosed buyer of some of its properties..

In 2014, Osum began its operations by buying some oil sands assets from Royal Dutch Shell. It has successfully operated wells on these properties using steam to make the underground bitumen flowable.

 

 

 

 

 

  

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — November 23, 2017

Changfeng Energy Inc. ( CFY:TSXV) announced on November 23rd that Sanya Changfeng New Energy Investment Co., Ltd. and Hunan Zhongyou Gas Co., Ltd. have entered into an Equity Restructuring Agreement with Xin'ao Gas Development Co. Ltd.

Agreement provides an increase from the current registered capital; Project Company will repay an outstanding loan of RMB 46,767,800 owing to Changfeng; and Xin'ao Gas will acquire the 24.5% interest of the Project Company held by Zhongyou Gas.

Agreement also provides that Sanya Changfeng and Zhongyou Gas will commit to repay Xin'ao Gas the full amount of the infused capital and repurchase its interest in the Project Company if the Project Company fails to sign a Concession Agreement.

The transaction is in support of Changfeng's previously announced intention to strategically shift its corporate focus towards sustainable energy in combination with natural gas to become an integrated energy provider.

Changfeng Energy Inc. is a Canadian public company and is an integrated energy provider and natural gas distribution company in the People's Republic of China. Company has a market cap of $33 million and approximately 64 million shares outstanding.

Connacher Oil and Gas Ltd. (CLL:TSX) announced on November 23rd its third quarter results. Company reported that its revenue increased to $55.9 million (Q3 2016 - $31.7 million) and its adjusted EBITDA increased to $9.7 million (Q3 2016 - deficit of $4.1 million). Company generated net losses of $222.8 million (Q3 2016 - net loss of $34.3 million) and $262.9 million (YTD 2016 - net loss of $447.1 million), respectively.

On March 31, 2016, the Company entered into a forbearance agreement with Credit Suisse AG, Cayman Islands Branch, as administrative agent, and certain lenders constituting the "Required Lenders" in respect of US$153.8 million of loans made by the lenders under the credit agreement dated as of May 23, 2014.

Under the terms of the Forbearance Agreement, the Lenders agreed to, among other things, forbear from exercising enforcement rights and remedies arising from the Company's failure to pay the cash interest and principal payments due on March 31, 2016 until the earlier of April 30, 2016. On April 30, 2016, the Company entered into a second forbearance agreement which extended the forbearance period until May 16, 2016. On May 17, 2016, the Company sought and obtained creditor protection under the Companies' Creditors Arrangement Act and six Court-ordered extensions have been obtained, with the most recent extending the stay of proceedings until and including January 31, 2018.

Connacher is a Calgary based in situ oil sands developer, producer, and marketer of bitumen. Company holds a 100 per cent interest in approximately 447 million barrels of proved and probable bitumen reserves and operates two steam-assisted gravity drainage facilities located on the company's Great Divide oil sands leases near Fort McMurray. Company is suspended from trading on the TSX until financial matters are resolved.

Ikkuma Resources Corp. ( IKM:TSXV) announced on November 23rd its financial and operating results for the three and nine months ended September 30, 2017. Company reported sales revenues of $5.1 million in the third quarter and $24.7 million in the first nine months of 2017. Company experienced a loss of $(3.4 million in the third quarter and $(1.8) million for the first nine months of 2017.

Two horizontal wells were completed in Q3 2017. Each well intersected high-quality light oil pools, with one exploration well expanding the fairway farther west than previously delineated. The wells were also used to collect reservoir data from the "Badheart formation", a sandstone reservoir that has proven to be oil bearing.

Corporation is currently collecting pressure information to aid in the future production of these wells and is working on an alternative completion design for these wells, found in only 15% of the corporation's land base.

Corporation expects that oil production can be improved significantly with a stimulation redesign, similar to many deep basin plays. The last play type, "folded Cardium", is expected to be tested in 2018.

Ikkuma Resources Corp. is a Calgary based oil and gas company with holdings in both conventional and unconventional projects in Western Canada. Company has a market cap of $56 million and approximately 109 million shares outstanding.

PentaNova Energy Corp. (PNO:TSXV) announced on November 23rd signed the final agreement with Argentina's National Oil Producer YPF to farm in on 11% of the Llancanelo heavy oil field. This agreement which is subject to standard regulatory approval takes PentaNova to a 50% working interest partnership in the field.

The Llancanelo area is located to the north of the Neuquén Basin, in a basin-edge position in the province of Mendoza, 37 km southeast of the city of Malargüe. The field is close to existing road, pipeline and airport infrastructure.

The acquisition of Llancanelo will see PentaNova pay a $3 million deposit ($0.5 million already paid), fund a $54 million development work program over 3 years and conditionally pay a $10 million payment on the third anniversary of the agreement.

PentaNova management team and the technical team assigned to the Llancanelo project have extensive experience in developing and rapidly scaling up production in heavy oil assets in which include Canada, Venezuela, Colombia and Argentina.

PentaNova Energy Corp. is a Vancouver based company focused on proven oil and gas plays in Latin America. Company has a market cap of $94 million and approximately 210 million shares outstanding.

Petroteq Energy Inc. (PQE:TSXV) announced on November 23rd signed an execution of a memorandum of understanding with Deloro Energy LLC. Upon execution of the MOU, Deloro paid Petroteq Energy CA a US$50,000 non-refundable deposit.

Further information is available on company's website http://www.mcwenergygroup.com .

Company continues to work towards completing the transaction contemplated by the MOU, there can be no assurance that a viable transaction will result or successfully conclude in a timely manner, or at all. Additional information will be released by the company as it occurs.

Petroteq Energy Inc, formerly MCW Energy Group Ltd through its subsidiary is engaged in a tar sands mining and oil processing operation, using a closed-loop solvent based extraction system that recovers bitumen from surface mining. Company has a market cap of $74 million and approximately 55 million shares outstanding.

Precision Drilling Corporation (PD:TSX) announced on November 23rd a private offering of US$400 million aggregate principal amount of 7.125% Senior Notes due 2026. Notes were guaranteed on a senior unsecured basis by current and future U.S. and Canadian subsidiaries of Precision that also guarantee Precision's revolving credit facility and certain other future indebtedness.

Precision will use the net proceeds from the offering, together with cash on hand, to fund its previously announced tender offer to repurchase any and all of its US$372 million aggregate principal amount outstanding of Senior Notes due 2020 and up to US$70 million aggregate principal amount of its Senior Notes due 2021, and to fund the redemption of any 2020 Notes not tendered during the Tender Offer.

Precision is a Calgary based provider of an extensive fleet of contract drilling rigs, directional drilling services, well service and snubbing rigs, camps, rental equipment, and wastewater treatment units backed by a comprehensive mix of technical support services and skilled, experienced personnel. Company has a market cap of $997 million and approximately 293 million shares outstanding.

More news on Oilpatch Review

 

Today’s Inspirations

“Age is a matter of mind; if you don’t mind, it doesn’t matter.”

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 U.S. military consumes more oil than Sweden, Portugal, or the Philippines and twice as much oil as the entire nation of Ireland. It is estimated that the American military uses 340,000 to 350,000 barrels of oil per day. In 2008, the Pentagon spent over $15 billion on its fuel bill and in 2009, it requested the government for an additional $3 billion.

 

prices compiled and updated on a regular basis by Canadian Insight

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Victoria

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Regina

Brandon

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1.359

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1.309

 

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     WCS  / WTI

 Price Spread  -15.60

  November 23, 2017

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