Canadian Insight

Online oil and gas magazine keeping investors informed ...

Updated on Friday, February 28, 2020

Teck Resources pulls out of a major oil sands project — February 24, 2020

Teck Resources is pulling out of a major oil sands project  which was approved by National Energy Board but was still awaiting approval of the Trudeau Administration. Political insiders felt that the project was going to be denied an approval.

The Frontier oil sands project was valued at $20.8 million dollars and was estimated to produce 260,000 barrels of crude oil per day upon completion.

Don Lindsay, Chief Executive Office of Teck Resources, placed the blame directly on the Trudeau Liberal government. Lindsay stated, “The growing debate around this issue has placed Frontier and this company squarely at the nexus of much broader issues that need to be resolved. It is now evident that there is no constructive path forward for the project.”

 

 

Trans Mountain Pipeline clears another  legal hurdle — February 4, 2020

Federal Court of Appeal has announced its decision on legal objections laid by four challenges from First Nations in British Columbia.

In a 95 page ruling, the Federal Court of Appeal stated that there was no legal basis to uphold the already federal government approved pipeline project.

The court stated that all of the hearings that were held  gave ample time for al necessary consultations and all reviews were done properly.

The decision now means that the pipeline project could continue to proceed but the First Nations could still challenge the ruling in the Supreme Court. They have a time window of sixty days for an appeal.

The Trans Mountain Pipeline expansion project was approved by the federal government in 2016. Approval was overturned by the federal Court of Appeal on August, 2018.

Once completed the Trans Mountain pipeline expansion could triple the volume of crude oil coming from Hardisty, Alberta to the western port of Vancouver.

Cost of the pipeline and expansion project to the Canadian taxpayer is estimated to be over $14 billion.

 

 

CAPP forecasts a big lift in Canadian oil and gas investments — January 31, 2020

Canadian Association of Petroleum Producer has issued a positive forecast for 2020 in the Canadian oil and gas industry. CAPP predicts that investing in upstream oil and gas industry will increase by $2 billion over last year.

Conventional oil and natural gas capital investment for 2020 is forecast at $25.4 billion, up from an estimated $24.4 billion last year.

Capital investment in the oil sands is forecast at $11.6 billion in 2020, up from an estimated $10.7 billion in 2019. This marks the first time in five years that oil sands capital spending is expected to experience an upswing.

Overall for the oil and natural gas sector, total capital investment this year is forecast at $37 billion, up from an estimated $35.1 billion in 2019, for a combined increase of six per cent in 2020. This would halt the dramatic decline seen since 2014, when investment numbers reached $81 billion.

CAPP Tim McMillan, President and CEO commented, “We are very happy to see an increase in capital investment expected for 2020. It's a reflection of the hard work and determination on many fronts to bring the industry into a more competitive position. That includes the corporate tax cut by the Government of Alberta, and incenting crude by rail under curtailment, which is helping to attract business and investment."

 

 

Commission of Canada Energy Regulator resumes hearings on Trans Mountain pipeline — January 28, 2020

As of today,  Commission of the Canada Energy Regulator will hold detailed route hearings for landowners along the path of the Trans Mountain Expansion Project. These hearings are the first since regulatory processes on the project resumed in July of 2019.

The Commission to decide on whether the exact location of the pipeline is the best possible, and will confirm the most appropriate methods and timing of construction. Landowners whose lands are proposed to be crossed by the pipeline, as well as Indigenous groups and other persons whose lands may be adversely affected were able to object to the detailed route proposed by Trans Mountain.

Construction is permitted in areas where applicable conditions have been satisfied and the detailed route of the pipeline has been approved. Pipeline construction is currently underway along Alberta portions, as well as at the Edmonton and Burnaby Terminals, and the Westridge Marine Terminal.

 

Supreme Court denies Horgan’s socialist government the right to regulate what a pipeline may carry — January 17, 2020

Canada’s Supreme Court ruled on Thursday that British Columbia’s provincial government cannot regulate what is transported in a major crude oil pipeline crossing its territory.

The Supreme Court ended the previous decision which set a challenge against Trans Mountain, but others remain. The pipeline is under construction and is expected to be in service by the summer of2022.

 

Delayed pipeline project will begin construction this February — January 15, 2020

Work will soon begin on Keystone XL pipeline. TC Energy announced that it will begin preliminary work in three northern US states in February. Construction permits are still pending US federal government approval but the company stated that it expects no long delays.

TC Energy stated that  it plans to start building pumping stations along the entire pipeline route in June. Work on a pipeline segment in Nebraska would also start in June, followed by the start of construction of some segments in Montana and South Dakota in August.

Last March, President Donald Trump signed a renewed permission for the Keystone XL pipeline. This is a move in his administration’s pursuit of maximizing production of oil, gas and coal for domestic use and global exports.

 

Poll indicates Quebecers prefer Western Canadian oil over foreign imported — December 11, 2019

A poll sanction by Montreal Economic Institute shows that Quebec politicians have it all wrong. Results show a vast majority of Quebecers prefer western crude oil over foreign imported crude.

Poll showed that an overwhelming majority of Quebecers (65%) prefer for the oil imported into Quebec to come from Western Canada, versus just 13% who prefer American oil and 5% who prefer oil from another country.

When questioned about the safest way to transport crude oil, 50% of the people interviewed stated  that pipelines are the safest means of transport, followed by 11% who think the train is safest.

Chief Economist and Chief Operating Officer of Economic Institute Montreal stated, "Quebecers are much more open to hydrocarbons than we might think. They understand that we need oil and that the energy transition will not happen overnight."

 

Gibson Energy announces a new diluent recovery project  — December 4, 2019

A 100,000 barrel diluent recovery project near Hardisty, Alberta is being planned by Gibson Energy. The project is expected to free up room in pipelines and railway tankers.

Diluent is a light oil mixed with sticky, and heavy bitumen to allow it to flow in a pipeline. It makes up as much as a third of the volume of blended bitumen

Gibson Energy will partner with US Development Group, LLC, to construct and operate the facility. Project is expected to be completed and operational in 2021.

 

Laying the Trans Mountain Pipeline soon to begin in Alberta— December 3, 2019

Trans Mountain CEO Ian Anderson announced that laying the pipe will soon begin after a span of 10 years since it was first announced.

The pipeline was twice approved by the federal government and was challenged in court numerous times. This resulted in many setbacks as the whole project had to go back to further consultations and reviews.

Kinder Morgan frustrated with all of the impediments sold the pipeline to the federal government in 2018 for $4.5 billion. The pipeline project met further court delays this summer.

 It was stated that the whole project will take three years to build and cost the federal government $7.4 billion.

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — February 28, 2020

Advantage Oil & Gas Ltd. (AAV:TSX) announced its 2019 results. Company reported adjusted funds flow for the fourth quarter reached 39.965 million and $156.063 million in 2019. Operating netback in the fourth quarter was $11.79 per barrel and $11.15 per barrel in 2019.

Company recorded annual production of 44,334 boe/d, an increase of 6% (250 mmcf/d natural gas and 2,700 bbls/d liquids) and quarterly natural gas production of 266 mmcf/d in the fourth quarter of 2019 during a period of elevated AECO prices.

Year-end net debt was $304 million on a $400 million bank credit facility, resulting in a net debt to adjusted funds flow ratio of 2.0.

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 0n February 28th its fourth quarter and full-year 2019 financial results. Normalized EBITDA was $425 million for the fourth quarter and $1.271 billion for the full-year, a 26 percent year-over-year increase and near the top of the 2019 guidance range of $1.2 to $1.3 billion. Normalized net incom was $186 million ($0.67 per share) in the fourth quarter and $324 million ($1.17 per share) for the full-year, a 66 percent year-over-year increase. Net loss applicable to common shares was $103 million ($0.37 per share) in the fourth quarter and net income applicable to common shares was $769 million ($2.78 per share) for the full-year.

Randy Crawford, President and Chief Executive Officer commented, "2019 was a transformational year at AltaGas and I am extremely proud of what our team accomplished. We laid out a balanced funding plan in December 2018 and we surpassed our targets.”

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.

Cub Energy Inc. (KUB:TSXV) announced an operations update. Company reported that that KUB-Gas LLC , Cub's 35%-owned subsidiary which owns and operates the eastern Ukraine licences, has drilled the Makeevskoye-30 well to a total depth of 1,985 metres. Logging was performed on several horizons and was evaluated as having non-commercial gas shows. The well will be abandoned and Kub-Gas is reviewing its options for its next operation.

Cub Energy Incorporated is a Houston, USA based international oil and gas company focused on its activities and properties in Ukraine. Company has market cap of $7.8 million and approximately 312 million shares outstanding.

Eco (Atlantic) Oil & Gas Ltd. (EOG:TSXV) announced on February 28th that Gil Holzman, Chief Executive Officer and a Director of the company, acquired, on 27 February 2020, 50,000 common shares in the company at a price of 26.4p per share and 24,000 common shares at a price of C$0.4896 per share.

Eco (Atlantic) Oil & Gas Limited is a Toronto based international oil and gas company with assets in Guyana and Namibia. Company has a market cap of $276 million and approximately 164 million shares outstanding.

Jadestone Energy Inc. (JSE:TSXV) announced on February 28th that on February 26, 2020, A. Paul Blakeley, a Director, President and Chief Executive Officer of Jadestone, acquired a total of 100,000 common shares of no par value at a price of GBp 66.00 per share, for a total cost of £66,000.00.

Jadestone Energy Incorporated is a Singapore based oil and gas company. It has operations and assets in Australia, Vietnam and Philippines. Company has a market cap of $396 million and approximately 461 million shares outstanding.

Obsidian Energy Ltd. (OBE:TSX) announced the extension of the company's syndicated credit facility with the underlying borrowing base and amount available under the syndicated credit facility set at $550 million and $450 million, respectively, subject to specific items being amended as discussed below. The amount available under the syndicated credit facility has been reduced by $10 million to the aforementioned $450 million level.

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.

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Gran Tierra Energy Inc. (GTE:TSX) announced it's financial and operating results for the fourth quarter and year ended December 31, 2019. Company generated 2019 oil and gas sales of $571 million and $44.77 per BOE. Company achieved 2019 net income of $39 million ($0.10 per share basic and diluted), EBITDA of $364 million, adjusted EBITDA of $326 million, and funds flow from operations of $272 million ($0.72 per share basic and diluted).

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented, "2019 was both an exciting and challenging year for Gran Tierra. Throughout the course of the second half of 2019, we accomplished the full implementation and growth of our waterflood in the Acordionero field, which is forecast to generate approximately $1.2 billion of free cash flow over the next five years and has a December 31, 2019, before tax 2P NPV10 of $1.8 billion. Our four core assets are all under waterflood at different stages of maturity and are forecast to generate significant free cash flow for the next several years.”

Gran Tierra Energy Inc. is a Calgary based with a focus on its operations in Calgary. Company has a market cap of $369 million and approximately 367 million shares outstanding.

Husky Energy (HSE:TSX) announced on February 27th its fourth quarter and 2019 results. Company reported petroleum and operations sales reached 4.8 billion in the fourth quarter and $19.9 billion in 2019. Company reported a loss of $(2.3) billion in the fourth quarter and a $(1.37) billion in 2019.

The Board of Directors has approved a quarterly dividend of $0.125 per common share for the three-month period ended December 31, 2019. The dividend will be payable on April 1, 2020 to shareholders of record at the close of business on March 17, 2020.

CEO Rob Peabody commented, “We delivered on critical milestones during the year, including our top priority of improved safety performance. We met our production and capital guidance, achieved first oil at the 10,000 barrel-per-day Dee Valley thermal bitumen project and have completed the safe startup of the Lima Refinery crude oil flexibility project.”

Husky Energy Inc. is a Calgary based oil and gas company with operations in western Canada, the United States, and the Asia-Pacific and the Atlantic region of Canada. Company has a market cap of $14.8 billion and approximately 1.0 billion shares outstanding.

Trican Well Service Ltd. (TCW:TSX) announced its annual results for 2019. Company reported a revenue of $163 million the fourth quarter and 636 million in 2019. Company experienced a loss of $(20.6) million in the fourth quarter and $(72.7) in 2019.

Company responded to weakness in market conditions by continuing to drive cost efficiencies deeper into the business, consolidating base locations to better align operations with market conditions, and implementing cost reductions that are anticipated to result in run-rate annualized savings of $40 million.

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.

Vermilion Energy Inc. (VET:TSX) announced on February 27th that it will release its 2019 fourth quarter and year-end operating and financial results on March 6, 2020. The audited financial statements, management discussion and analysis, and annual information form for the year ended December 31, 2019 will be available on SEDAR.

Vermilion Energy Inc. is a Calgary based international energy producer that seeks to create value through the acquisition, exploration, development and optimization of producing properties in North America, Europe and Australia. Company has a market cap of $4.4 billion and approximately 153 million shares outstanding.

Whitecap Resources Inc. (WCP:TSX) announced on February 27th its operating and audited financial results for the quarter and year ended December 31, 2019. Company reported a revenue of $369 million in the fourth quarter and $1.418 billion in 2019. Company had a loss of $(203.9) million in the fourth quarter and a loss of $(155.8) million in 2019.

Whitecap's balance sheet remains in strong condition with net debt at $1.19 billion on total credit capacity of $1.77 billion providing significant financial flexibility and liquidity.

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

Scott Alexander, “Making money is a hobby that will complement any other hobbies you have, beautifully.”

 

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 $15.85

  February 28, 2020

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