Canadian Insight

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Updated on Friday, February 26, 2021

Energy Information Administration predicts US will import more oil than it exports in 2021 &  2022—February 18, 2021

 Energy Information Administration reports that  US crude oil imports are expected to increase in 2021 and 2022. This is a reversal to 2020 when US was exporting more crude oil then it had imported.

EIA predicts that US will increase its crude oil imports from 2.7 million barrels per day in 2020 to 3.7 million barrels per day in 2021 and 4.4 million barrels per day in 2022.

US crude oil production had declined in 2020 by 0.9 million barrels per day in 2020. EIA expects will average at 11.3 million barrels per day in 2021 and rise to 11.9 barrels per day by the end of 2022. This is still lower than the peak in 2019 which reached 12.9 million barrels per day.

 

 

Russia’s oil giant showing interest  in the Canadian oil patch—February 8, 2021

It is interesting to note that while US interest in Canada’s oil patch is waning, an unfamiliar investor may be about to grasp an opportunity  Russia’s oil giant, Lukoil,  is showing interest in making a significant stake in Western Canada’s oil patch.

Privately owned, Velvet Energy, is partly owned (48%) by Canada Pension Plan Board and Pincus LLC of New York. Apparently the two investors want to cash out their share in Velvet Energy.

Last week, word has leaked out that Lukoil was setting up to purchase the stakes held by CPPB and Pincus LLC.

Indications are that Lukoil’s own properties in Russia are on a rapid decline and it’s looking for new opportunities to add to its operations.

 

Keystone XL isn’t dead —February 5, 2021

In an all night marathon, the US Senate passed a GOP amendment in supporting the Keystone XL pipeline project. The amendment received support of two Democrat senators and passed 52 to 48..

The Republican Party’s amendment called for a fund to be established to improve relations with Canada after President Biden revoked the Keystone XL federal permit and has put thousand of jobs in jeopardy.

Senator John Kennedy offered his support for the bill and the pipeline project. He went on to say, “The Keystone XL pipeline supports American jobs, American energy independence and America’s national security. Why President Biden shut it down and the 48 Senate Democrats just voted to keep it closed is beyond me.”

 

Biden Administration about to make a leftist turn—January 21, 2021

Newly sworn in President Joe Biden is about to show how much his administration will lean to the left. Word is  that Biden is about withdraw the permit to build the Keystone XL pipeline.

Biden’s move is about to begin a rocky relationship with its closest neighbor and ally. Premier Jason Kenny has already expressed that the province of Alberta will have no choice but take legal action against US.

 There is still hope that the new US government will consult and meet with the government representative of Alberta and Canada as well as TC Energy.

 

Canadian Natural gas and oil  investment rebound in 2021—January 13, 2021

Canadian Association of Petroleum Producers is forecasting a 14 percent increase in upstream natural gas and oil investment in 2021.

Capitol spending in the sector is expected to  increase $3.36 billion higher than last year and range around $27.3 billion.

The additional spending will primarily be in Alberta and British Columbia. Saskatchewan and eastern Canada will have a more modest increase.

 

TC Energy taking bids on its pipeline expansion capacity —January 8, 2021

TC Energy is forging ahead with construction despite the upcoming changes in US government. Pipeline completion is expected to be finalized in two years.

Company spokesperson have stated that it is moving with contracts to oil shipping customers. It is expected that 80,000 barrels per day of capacity will be available..

TC Energy has expressed confidence that President-elect Joe Biden will not stop the project as this would cause a significant jump in unemployment.  

 

Trans Mountain pipeline construction in the final stages for restart —January 8, 2021

Trans Mountain safety shutdown is still in place but company spokesperson has reaffirmed that construction will resume soon.

Work on the pipeline expansion stopped after a  serious accident occurred in mid-December at the Burnaby terminal. This was the second accident, as near the end of October, a worker was killed near Edmonton working on the pipeline.

In addition to the several accidents, there had been numerous covid cases along the construction route. It is reported that not all of the cases have been cleared.

Spokesman for Trans Mountain went on to say that there are new contractors for Greater Edmonton portion of the pipeline and the North Thompson area. Completion of the pipeline is still expected to be on schedule.

 

Natural Law Energy investing  a serious stake in Keystone XL November 20, 2020

CEO of Natural Law Energy, Travis Meguinis,  has confirmed that the First Nations Alliance will purchase a 12% stake in Keystone XL pipeline.

Travis Meguinis went on to say that Natural Law Energy may also consider further investments in other projects with TC Energy.

Natural Law energy is the second equity partner for Keystone XL. Earlier this year, the province of Alberta announced a $1.5 billion investment in the pipeline project.

 

First nations investors aid completion of Keystone XL November 18, 2020

President elect Joe Biden will find it more difficult to stop construction of the Keystone XL pipeline. TC Energy believes that it has made it more favorable to gain support of the newly elected administration which has vowed to stop construction in the US.

Calgary based company announced on Tuesday that it is building further partnerships with the First Nations and Indigenous groups in Canada and the US. Company also  has agreements with numerous unions who support the construction of the pipeline.

TC Energy has signed a deal with Natural Law Energy, an alliance of Canadian Indigenous communities, for an investment of up to $1 billion in the pipeline project. It is expected that the new investors and TC Energy will close the deal in 2021.

TC Energy is also pursuing to secure an additional $37 billion in added capital projects. 

 

Cenovus Energy buying out Husky Energy — October 26, 2020

Cenovus Energy announced that it will be taking over Husky Energy to create a new integrated oil and gas company.

The boards of each company have entered to a definitive agreement under which Cenovus and Husky will combine in all stock valued at $23.6 billion.

The transaction has been approved by both boards.  It is expected to approved by both shareholders and finalized in the first quarter of 2021.

Husky shareholders will receive 0.7845 of a Cenovus share. They will also receive 0.0651 share purchase warrant for each Husky common share.

 

Saskatchewan’s Premier Scott Moe concerned with the possible Joe Biden win in US presidential election — October 19, 2020

Premier Scott Moe announced last week that he is very concerned with the possible outcome and consequences in the US presidential reelection.

Premier Moe stated that the Democratic candidate, Joe Biden, has repeatedly stated that he would kill the Keystone XL pipeline when he is elected.

The Keystone XL pipeline was rejected by the former president Barack Obama and vice president Biden. There is reason to believe that this would happen again.

The pipeline project is very important to western Canadian oil industry. It would connect western Canada with Gulf oil markets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — February 26, 2021

Advantage Oil & Gas Ltd. (AAV:TSX) announced its year end results and guidance. Company reported its annual 2020 cash provided by operating activities of $101 million and adjusted funds flow of $105 million or $0.56/share. Company reported a net income of $24,168 million in the fourth quarter and $a loss of $(284,045) million.

Company drilled 13 wells at Glacier. Initial well productivity increased by 87%. Advaantage OIl recorded annual production of 44,922 boe/d (243 mmcf/d natural gas, 2,379 bbls/d crude oil and condensate, and 2,029 bbls/d NGLs). Exit production was 45,850 boe/d (247 mmcf/d natural gas, 2,219 bbls/d crude oil and condensate, and 2,464 bbls/d NGLs). 2021 capital efficiency expected to be approximately $8,400/boe/d

Advantage Oil & Gas Ltd is a Calgary based natural gas and liquids development and production company. It operates a portion of assets located in the Montney resource play in Western Canada Company has a market cap of $374 million and approximately 186 million shares outstanding.

AltaGas Ltd. (ALA:TSX) announced on February 26th its 2020 financial results. Company reported normalized EBITDA for the fourth quarter of 2020 was $392 million, compared to $436 million for the same quarter in 2019. Normalized net income for the fourth quarter of 2020 was $147 million ($0.53 per share). Revenue for 2020 was $5,587 million and a net income of $48 million.

AltaGas will hold a conference call today at 9:00 a.m. MT (11:00 a.m. ET) to discuss Q4 and 2020 results, provide an update on the business and other corporate developments.

AltaGas Canada Ltd is a Calgary based company which owns and operates a diversified basket of energy infrastructure businesses. Company has a market cap of $1.0 billion and approximately 30 million shares outstanding.

Bengal Energy Ltd. (BNG:TSX) announced on February 26th the closing of its previously announced non-brokered private placement of common shares in the capital of the company to Texada Capital Management Ltd .The closing of the transactions contemplated by the debt settlement agreement with its senior secured lender Westpac Banking Corporation in respect of the settlement of all indebtedness and liabilities owing by Bengal's wholly owned subsidiary Bengal Energy (Australia) Pty Ltd.

Chayan Chakrabarty, the President and CEO of Bengal, commented: "The successful closing of the Debt Settlement transaction and the Private Placement not only results in the Company having no debt and the ability to deploy capital into our development and exploration programs over the near term, but it also allows us to continue working to build a viable, sustainable and growing company, for the benefit of all our stakeholders. On behalf of all of us at Bengal Energy, we thank Texada and its principal Bill Wheeler for their support."

Bengal Energy Ltd is engaged in the exploration of oil and natural resource business activities. It involved in development and production of crude oil and natural gas. It derives its revenues from the sale of the exploration business and has operations spread across Canada. Company has a market cap of $7.7 million and approximately 102 million shares outstanding.

Gear Energy Ltd. (GXE:TSX) announced that its regular monthly update to shareholders is available on the Company's website. These updates are intended to provide investors knowledge of the status of their investment in Gear.

Gear Energy limited is a Calgary based oil and gas company with operations and assets in western Canada. Company has a market cap of $158 million and approximately 219 million shares outstanding.

Pembina Pipeline Corporation (PPL:TSX) announced the acceptance by the Toronto Stock Exchange of Pembina's notice to commence a normal course issuer bid to purchase up to five percent of its outstanding common shares. Pembina believes that, from time to time, the market price of its common shares trade at prices that may not adequately reflect their underlying value.

Pembina Pipeline Corporation is a Calgary based transportation and midstream service provider that has been serving North America's energy industry for over 60 years. Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. Company has a market cap of $22 billion and approximately 506 million shares outstanding.

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Frontera Energy Corporation (FEC:TSX) announced that its year-end 2020 results, year-end 2020 independent reserves assessment and 2021 capital plan and guidance information will be released after markets close on Wednesday, March 3, 2021. A conference call for investors and analysts will be held on Thursday, March 4, 2021 at 10:00 a.m.

Frontera Energy Corporation is a Toronto based oil and gas company with operations focused in South America. Company has a market cap of $1.06 billion and approximately 98 million shares outstanding.

Kelt Exploration Ltd. (KEL:TSX) announced on February 25th a report on its oil & gas reserves and production for the year ended December 31, 2020. Kelt retained Sproule Associates Limited, an independent qualified reserve evaluator to prepare a report on its oil and gas reserves.

On August 21, 2020, Kelt completed the sale of its Inga/Fireweed/Stoddart assets, one of the Company's four main divisions. During 2020, primarily during the period subsequent to the sale of the Inga Assets, Kelt was active operationally in its remaining three main divisions, resulting in increases in all categories of reserves compared to the previous year, despite a significant reduction in Sproule's future commodity price forecasts that resulted in negative reserve revisions due to economic factors in the 2020 reserve report.

Company's net present value of proved plus probable reserves at December 31, 2020, discounted at 10% before tax, was $932 million, a decrease of 16% from $1,111 million, pro-forma December 31, 2019. Despite an increase in reserves, the net present value decreased as a result of significantly lower forecasted oil and gas prices for the future years in the December 31, 2020 evaluation.

Kelt Exploration Limited is Calgary based oil and gas company with operations and assets in western Canada. Kelt has a market cap of 955 million and approximately 184 million shares outstanding.

Obsidian Energy Ltd. (OBE:TSX) announced an extension of company's r syndicated credit facility to March 31, 2021 and provides a hedging update. The syndicated credit facility has an underlying borrowing base of $550 million with $450 million available to be drawn; both amounts remain unchanged. Under the agreement, the syndicated credit facility continues to be available on a revolving basis until March 31, 2021, subject to further extensions, with the end date of the term period remaining on November 30, 2021.

Obsidian Energy is a Calgary based oil and gas producer with strategic assets in Alberta. Company is primarily focused on the development of its largest, light oil Cardium asset. In 2017 Obsidian Energy underwent a formal name change from Penn West Petroleum. Company has a market cap of $231 million and approximately 507 million shares outstanding.

Reconnaissance Energy Africa Ltd. (RECO:TSXV) announced on February 25th an update on drilling operations in the Kavango sedimentary basin in the Kalahari Desert of North East Namibia and announce that it has qualified as the Canadian TSX Venture 50 Exchanges 2021 top performing energy company.

As announced on January 11, 2021, the company commenced drilling operations on the first well (6-2), of an initial three well program to evaluate potential hydrocarbon systems in one of five major sub-basins of the larger, more laterally extensive, deep Kavango basin.

Renaissance Oil Corp is Vancouver based company engaged in the acquisition, development and production of oil and natural gas in Mexico. Its properties include Mundo Nuevo, Topen, Malva, and Ponton. Company has a market cap of $41 million and approximately 280 million shares outstanding.

Shoal Point Energy Ltd. (SHP:CNX) announced the closing of the company's previously announced (February 9, 2021) non-brokered Private Placement. A total of 5,335,354 units were placed for total gross proceeds of $373,475. These proceeds will be used for general working capital and to fund the Company's operations at the Mt. Evans project in Kansas.

Shoal Point Energy Ltd is a petroleum exploration and development company with offices in St. John's, Toronto and Vancouver, Canada. The Company entered into a farm in agreement with Shelby Resources LLC to explore and develop Mount Evans oil and gas prospect in Kansas. Company has a market cap of $9.1 million and approximately 43.5 million shares outstanding.

Whitecap Resources Inc. (WCP:TSX) announced its operating and audited financial results for the quarter and year ended December 31, 2020. Company reported a revenue of $238 million in the fourth quarter and $$1,418 million in 2020. Company experienced a net income of $331 million in the fouth quarter and a loss of $(1,844) in 2020.

Directors has approved a 2021 capital expenditure budget of $280 to $300 million which will generate average production of approximately 100,000 boe/d (78% oil and NGLs) during the year.

Whitecap Resources Inc. is a Calgary based oil and gas company with operations in western Canada. Whitecap has a market cap of $2.0 billion and approximately 414 million shares outstanding.

More news on Oilpatch Review

 

Quote of the day

Steven R. Covey, "Motivation is a fire from within. If someone else tries to light that fire under you, chances are it will burn very briefly."

Did you know?

Simple variations of the famous pump jack, also known as the jack pump, grasshopper pump, or sucker rod pump were first used in the early 1900's. By 1913, the Simplex Pumping Jack became widely popular throughout the U.S. oil fields.  Walter C. Trout, who worked in Texas for Lufkin Foundry & Machine Company, is credited for designing the now familiar counterbalanced oilfield pump jack. Trout received a patent for his invention in1926.

 

prices compiled and updated on a regular basis by Canadian Insight

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     WCS  / WTI

 Price Spread -$11.65

  February 26, 2021

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