Canadian Insight

Online oil and gas magazine keeping investors informed ...

Updated on Monday, January 18, 2021

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.

 

Joe Biden’s win in US presidential election will have serious repercussions for the oil industry — October 1, 2020

The election of Joe Biden will not only have many changes for all Americans but even more serious repercussions for the American and Canadian oil and gas industry.

Joe Biden has repeatedly stated during his campaign that his government will re-enter the Paris Climate Agreement and  focus on ‘Green Energy’. Biden government intends to bring US emissions to net zero by 2050.

Biden plans to halt all off shore drilling and exploration on federal lands to stop global climate change. He has openly stated that his government would support all climate  related lawsuits against the oil and gas industry.

The policy which will seriously hurt western Canada is the option lost to export heavy crude into the Gulf states. The Democrats headed by Joe Biden intend to stop further construction of the TC Energy Keystone XL pipeline

 

OPEC tangled in a losing scenario — September 29, 2019

OPEC’s control over oil prices may be drawing to an end.  The rising global oil inventory is about to get another shot with Libya returning back to exporting oil. Despite sanctions against Iran, it has managed to increase its oil exports.

Earlier this summer, OPEC thought that it had oil exports and oil prices under control and began relaxing its supply quotas.  Saudi National Oil Corporation had plans to increase its oil exports by 160,000 barrels per day by the summers end.

The corona virus pandemic showed signs of relief in mid-summer. It is  now on the increase and is once again skewing the global oil demand. Infections have skyrocketed in India and on the rise in Europe and North America.

Several reports indicate that tankers are now being booked to store crude oil. Mercuria, a multinational commodity trading group, recently announced that crude oil stocks are expected to build before there are any signs in an increase in demand.

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — January 18, 2021

Cardinal Energy Ltd. (CJ:TSX) announced that its Board of Directors has approved an operating and capital budget for 2021 that will focus on debt reduction, maintaining production levels and abandonment and reclamation expenditures.

Cardinal's 2021 budget is expected to produce adjusted funds flow of approximately $70 to $75 million and assumes an average royalty rate of 15%, a West Texas Intermediate oil price of US$52/bbl, US/CAD exchange rate of 0.78 and a $2.52/mcf AECO natural gas price.

During 2021, Cardinal's operating expenses are forecasted to average approximately $18.00/boe however expensed well reactivations will add approximately $2.00/boe of operating costs in 2021 as the Company plans to increase the workover and well reactivation program that was suspended in 2020 due to low oil prices.

Cardinal has allocated approximately $5 million of its 2021 budget for ARO expenditures which will complement the $18.4 million of government subsidies received to date from the Alberta Site Rehabilitation Program and the Saskatchewan Accelerated Site Rehabilitation Program through its service provider applications.

Cardinal Energy Limited is a Calgary based company. Cardinal’s principal business activity is the acquisition, exploration, and production of petroleum and natural gas in the provinces of Alberta and Saskatchewan. Company has a market cap of $294 million and approximately 117 million shares outstanding.

Reconnaissance Energy Africa Ltd. (RECO:TSXV) announced that, it has commenced the permitting process for the acquisition of 450 kilometers of 2D seismic data in the deep Kavango Basin in the Kalahari Desert of North East Namibia. To execute the program, the company has contracted Polaris Natural Resources Inc, based in Calgary, Alberta, Canada.

Company intends to conduct, process, and interpret 450 km of 2D seismic that will tie to the active three well drilling program. The proposed seismic survey will be conducted along existing roads and tracks. The Environmental Impact Assessment process for this operation has begun with the posting of public sessions.

Reconnaissance Energy Africa Ltd, formerly Lund Enterprises Corp is a Vancouver based oil and gas company engaged in the exploration and development of oil and gas in Namibia. Company has a market cap of $31 million and has approximately 61 million shares outstanding.

TC Energy Corporation (TRP:TSX) announced a new sustainable energy initiative for the Keystone XL Project. The company will achieve net zero emissions across the project operations when it is placed into service in 2023 and has committed the operations will be fully powered by renewable energy sources no later than 2030. This announcement comes after an extensive period of study and analysis, and as part of the company’s ongoing commitment to sustainability, thoughtfully finding innovative ways to reduce greenhouse gas emissions, while providing communities with reliable energy needed today.

TC Energy Corporation is a Calgary based energy transporter company. It owns and operates pipelines and power generation assets in Canada, the United States, and Mexico. Company has a market cap of $48 billion and approximately 918 million shares outstanding.

Trican Well Service Ltd. (TCW:TSX) announced on January 18th the appointment of Michael J. McNulty to its Board of Directors, effective January 18, 2021. Mr. McNulty will also serve as a member of the Audit Committee.

Mr. McNulty is currently a Managing Partner at Pillar Four Capital. His distinguished career of over 40 years in the global energy services sector began at Schlumberger. Thereafter, he held executive positions with Precision Drilling Ltd., Saxon Energy Services Ltd. and Calfrac Well Services Ltd.

Trican Well Services Ltd. Is a Calgary based company which provides a comprehensive array of specialized products, equipment and services that are used in exploration and development of oil and gas reserves. Company has a market cap of $210 million and approximately 284 million shares outstanding.

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Obsidian Energy Ltd. (OBE:TSX) substantiated its reasons for combining Bonterra and Obsidian Energy. Company claims that it is in their best interests through increased shareholder value. Obsidian Energy urges Bonterra shareholders to be part of a stronger company with a far superior future by accepting the company's offer

Obsidian Energy's Interim President and CEO stated, "The pace of consolidation in the industry has increased substantially with recent deal announcements in both the mid and large cap space, which the market has rewarded with significant share price appreciation. It is becoming clear that companies who do not act may be left behind to the detriment of their shareholders. Notwithstanding these obvious market trends, Bonterra's management team and board has refused to engage. As a result, if Bonterra shareholders truly want to protect and grow the value of their investment, they need to take matters into their own hands."

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.

Parkland Corporation (PKI:TSX) announced that a dividend of $0.1012 per share will be paid on February 15, 2021 to shareholders of record on January 22, 2021. The dividend will be an 'eligible dividend' for Canadian income tax purposes. The ex-dividend date is January 21, 2021.

Parkland Corporation is an Alberta based supplier of fuel and petroleum. Company operates throughout Canada, USA, and the Caribbean. Company has a market cap of $6.8 billion and approximately148 million shares outstanding.

Perpetual Energy Inc. (PMT:TSX) announced that the Alberta Court of Queen's Bench has summarily dismissed the balance of the Statement of Claim filed by PricewaterhouseCoopers Inc. LIT , in its capacity as trustee in bankruptcy of Sequoia Resources Corp. against Perpetual, Perpetual Operating Trust, Perpetual Operating Corp. and Susan Riddell Rose, the company's President and Chief Executive Officer. These claims relate to a transaction that involved the sale by Perpetual of legacy shallow gas properties in October 2016 to an arm's length third party purchaser after an extensive and lengthy marketing, due diligence and negotiation process

The Court has struck or summarily dismissed all other claims by PwC against the Perpetual Entities and Ms. Rose. PwC contested the previous decision. The appeal was heard by the Court of Appeal of Alberta on December 10, 2020 and its decision is still pending. The written reasons for the Court's decision on the BIA Claim have been posted to the company's website.

Perpetual Energy Incorporated is a Calgary based company engaged in the exploration, development, and marketing of oil and natural gas in western Canada. Company has a market cap of $21 million and approximately 60 million shares outstanding.

Whitecap Resources Inc. (WCP:TSX) announced that a cash dividend of Cdn. $0.01425 per common share in respect of January operations will be paid on February 15, 2021 to shareholders of record on January 31, 2021. This dividend is an eligible dividend for the purposes of the Income Tax Act (Canada).

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

Robert Anthony, “Some people drink from the fountain of knowledge, others just gargle.”

 

Did you know?

The first offshore oil wells were drilled in southern California prior to 1900's. Records indicate that Henry L. Williams drilled the first offshore oil well in 1896 in the Santa Barbara Channel which contains a portion of Summerland oil field. Following the discovery, Wooden peers were built from the mainland into the channel. Rigs were constructed on the spot along a network of peers. By 1902,  there were 412 oil wells in the channel connected by 14 piers.

 

prices compiled and updated on a regular basis by Canadian Insight

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     WCS  / WTI

 Price Spread -$14.92

  January 18, 2021

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