Canadian Insight

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Updated on Tuesday, June 30, 2020

Canadian Oil Producers Association recommends federal government intervene in attracting more investment into the oil & gas industry  — June 8, 2020

CAPP announced today that it has asked the federal government to identify measures to support economic recovery while other global oil producers are still focused on battling the Covid-19 pandemic.

CAPP stated that Canada should take advantage of the opportunity as the country recovers at a much faster pace than other nations. Waiting longer will only increased global competition.

CAPP stated that the federal government should not overlook the economic contribution from the oil and gas industry. The oil and gas sector generates more than $100 billion in gross national product annually. It should be noted that this industry alone, produces a half million jobs across the country.

 

 

Irving Oil gets approval to source more crude oil from Alberta — May 5, 2020

Irving Oil has found a novel way of sourcing more crude oil from Alberta despite all the hurdles the Federal Liberal government in Ottawa has initiated. The biggest obstacle was stopping construction of Energy East Pipeline.

Irving Oil applied and received permission to have more oil shipped on foreign tankers. Western Canadian crude oil would be loaded onto tankers in Vancouver and then shipped through the Panama Canal and then onto Saint John, New Brunswick.

Irving stated that it would also be picking up western Canadian crude oil from Gulf Coast terminals in the southern US, whenever adequate supplies would be available. In the near future, it is anticipated that Keystone XL will be pumping more Western Canadian oil into the US Gulf terminals.

Keystone XL pipeline is currently under construction.  When completed, the oil pipeline will connect the collection terminal at Hardisty, Alberta with the key US Gulf oil terminals for exports.

Irving Oil had committed to build a $300 million oil terminal at Saint John. Initially, it was meant to be a shipping terminal for western Canadian oil. Now it will serve as an import terminal for the Irving refinery.

Irving Oil was one of the biggest supporters of the $15.7 billion dollar Energy East Pipeline which was proposed by TransCanada Corporation. It was to connect Western Canadian crude oil sources with the East Coast refineries.

 

Wet’suwet’ten Hereditary chiefs will sign agreement with government— May1, 2020

A joint statement from the governments and Wet’suwet’en people says that all parties have reached an agreement in implementing the rights and title of the First Nation.

This statement says that there is still much work ahead in the negotiations, including how all will work together.

This is all in the center of a dispute between some Wet’suwet’en people hereditary chiefs and the construction of the Coastal GasLink pipeline.

 

 

Keystone XL Pipeline gets a major boost from Alberta— April 1, 2020

Two major announcements were made in unison on March 31 in Calgary; one from TC Energy and one from Premier Jason Kenny of the Alberta government. 

Russ Girling, TC Energy President and CEO, stated in a news release that it would go ahead and begin building the Keystone XL pipeline when its safe for their employees.

Following the news release, Premier Jason Kenny and Russ Girling faced the media. Premier Kenny announced that his provincial government would contribute $1.1 billion (US) in a ownership agreement and would also offer $4.2 billion (US) in a credit facility

The pipeline company will be consulting with US and Canadian health authorities as to keep employees safe from the Covid-19 virus. Construction will begin immediately when instructed that it’s safe for all workers.

Russ Girling stated that TC Energy has reached agreements with multiple companies for service agreements which would guarantee 575,000 barrels per day for a 20 year period. The project holds 125,000 barrels per day in current contracts from Hardisty, Alberta.

The 1,210-miles (1,947-kilometres) pipeline project will be capable of safely delivering 830,000 barrels per day of crude oil from Hardisty, Alberta to Steele City, Nebraska where it will connect with TC Energy’s existing facilities to reach U.S. Gulf Coast refiners to meet critical needs for transportation fuel and useful manufactured products. With pre-construction activities underway, the pipeline is expected to enter service in 2023.

 

Worst crude oil crash in 29 years as Russia and Saudi Arabia attempt to grab a greater market share— March 9, 2020

OPEC and its main ally, Russia, seem to be parting their ways. Last week’s OPEC meeting in Vienna failed to reach an agreement. Both Russia and Saudi Arabia have made a U-turn and intend to step up their oil output. As a result, oil prices have plummeted by 30% in the past three days. Oil prices have fallen to the lowest since 1991.

It is possible that this is a coordinated attempt to stop US shale oil development by increasing global oil inventories and driving crude oil prices down. It is also possible that Russia has decided on its own to take its own course and not continue to cooperate with OPEC. 

Saudi Arabia and Russia are two of the three major oil players. There are possibilities that this is an attempt to stall or derail US shale oil development and progress. American oil production has surpassed Russia and Saudi Arabia. US  has pushed its way into the global markets.

The possibilities of the spread of the corona virus and its effect on the global economy and the global oil demand is adding to the market chaos. The introduction of the price war between Russia and Saudi Arabia is adding a significant component which the markets and investors have previously not expected.

 

MEG Energy  asks provincial regulator to shelve  its oil sands project — March 2, 2020

MEG Energy has asked Alberta Energy Regulator to shelve its oil sands project for a three year delay.

MEG Energy is postponing its project due to political and continuing uncertainties in the Canadian business environment.

Company states that due to overloaded pipelines and uncertainty in future pipeline construction, it has decided to wait for more positive changes.

The project was awaiting provincial regulatory approval.

 

British Columbia’s Liberal leader discloses evidence that foreign capital is funding pipeline opposition — March 2, 2020

British Columbia’s Liberal opposition leader, Andrew Wilkinson, released evidence that foreign capital funding has channeled at the very least $4.2 million to various pipeline protestor groups .

Andrew Wilkinson stated that US tax documents reveal that  five American organizations have been funneling funding to six Canadian groups which have launched blockades and  protests opposing Coastal GasLink Pipeline project.

U.S. based, Rockefeller Foundation, Tides Foundation, Wilberforce Foundation, Bullitt Foundation, and Gordon & Betty Moore Foundation have been funding the following protest groups in Canada: Wilderness Committee, Sierra Club B.C, West Coast Environment Law, Dogwood B.C. and Stand. Earth.

 

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.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — June 30, 2020

Altura Energy Inc. (ATU:TSXV) announced on June 30th its asset disposition and provides an update on its credit facility renewal and operations. Altura and its lender have agreed to further extend the credit facility renewal from June 30, 2020 to July 31, 2020.

Altura is continuing to monitor commodity prices and implement production curtailments and operating cost saving measures and has halted all discretionary capital expenditures during this period of economic uncertainty. Corporation has returned production volumes in June to approximately 550 boe per day. Provided that oil pricing remains close to current levels, the Corporation plans to return production volumes to full capability of approximately 1,200 boe per day during July and August.

Altura Energy Incorporated is a Calgary based oil and gas company with operations in central Alberta. Company has a market cap of $50 million and approximately 33 million shares outstanding.

Bird River Resources Inc. (BDR:CNX) announced that due to circumstances created by the Covid-19 pandemic, it will not be filing its 3rd quarter interim financial statements and related management discussion and analysis by their scheduled due date of June 29, 2020 as required under section 4.4 (b) and section 5.1(1) of National Instrument 51-102. Company expects to file on or before August 12, 2020.

Bird River Resources Inc. is a Calgary based natural resources company focused on the energy sector. Company has a market cap of $3.5 million and approximately 139 million shares outstanding.

Cathedral Energy Services Ltd. (CET:TSX) announced the amendments to its existing credit facility which were announced in Cathedral's June 24, 2020 press release are now in force and effective as June 29, 2020. Maturity is extended to June 30, 2022 and reduction in Facility to $12 million. During the covenant relief period, advances under the Facility are limited to $10 million. Borrower has a one-time option to exit the covenant relief period.

Cathedral Energy Services Ltd. Is a Calgary based company focused on high performance directional drilling services. It offers its services in Canada and US. Cathedral has a market cap of $36 million and approximately 50 million shares outstanding.

Oryx Petroleum Corporation Limited (OXC:TSX) announced that the nominees listed in its Management Proxy Circular dated May 20, 2020 were elected as directors of Oryx Petroleum. Final voting results on all matters voted on at the Annual Meeting of Shareholders have been filed under the Corporation's profile on SEDAR.

Oryx Petroleum is a Calgary based international oil exploration, development and production company focused in Africa and the Middle East. Company has a market cap of $108 million and approximately 515 million shares outstanding.

Paramount Resources Ltd. (POU:TSX) announced that it has successfully completed amendments to its senior secured revolving bank credit facility with the unanimous support of its nine-bank syndicate. Current drawings on the Facility are approximately $760 million.

Activities remain focused in the Grande Prairie Region, where recent and significant reductions in cost structure have further enhanced both payouts and rates of return. Company remains well positioned to capture the value of its extensive asset base as commodity prices recover.

Paramount Resources is a Calgary based oil and gas company with operations in Alberta and British Columbia. Company has a market cap of $955 million and approximately131 million shares outstanding.

TORC Oil & Gas Ltd. (TOG:TSX) announced on June 30th the company's credit facility has been confirmed at $425 million, with the borrowing base determination dates under the credit agreement to be amended to May and November annually, from April and October. TORC has received formal lender commitments from all syndicate members and expects credit documentation to be completed by July 3, 2020.

TORC Oil & Gas Ltd is a Calgary based company engaged in exploration, development, and production of oil and natural gas reserves in the southeast Saskatchewan. Company has a market cap of $1.02 billion and approximately 217 million shares outstanding.

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Ballard Power Systems (BLDP:TSX) announced on June 29th that California Air Resources Board has adopted a policy where truck manufacturers will be obligated to transition from diesel trucks and vans (for Class 2b through Class 8) to electric zero-emission trucks, with a plan for every new truck sold in California to be zero-emission by 2045.Ballard sees this as an opportunity for the company. Ballard's industry leading fuel cell technology currently supports the operation of over 2,200 commercial trucks, primarily in China.

Ballard Power Systems is a Vancouver based Canadian company engaged in proton exchange membrane fuel cell development and commercialization. Company has a market cap of $864 million and approximately 232 million shares outstanding.

Calfrac Well Services Ltd. (CFW:TSX) announced on June 29th that it intends to release its Second Quarter 2020 results before markets open on Thursday, July 30, 2020 and has scheduled a conference call and webcast to begin at 10:00 A.M. MT (12:00 P.M. ET) on the same day.

Calfrac Well Services Ltd is a Calgary based company which provides specialized oilfield services, including hydraulic fracturing, coiled tubing, cementing and other well completion services to the oil and natural gas industries in Canada, the United States, Russia, Mexico and Argentina Company has a market cap of $400 million and approximately 145 million shares outstanding.

Hemisphere Energy Corporation (HME:TSXV) announced on June 29th that the TSX Venture Exchange has accepted the company's Notice of Intention to renew its Normal Course Issuer Bid to purchase for cancellation, from time to time, as Hemisphere considers advisable, up to 7,869,931 common shares of the company, representing approximately ten percent (10%) of the current public float of the common shares.

Hemisphere Energy Corporation is a Vancouver based oil and gas company. Its core operations are in Jenner and Atlee Buffalo areas in southeast Alberta. Company has a market cap of $11 million and approximately 90 million shares outstanding.

Oryx Petroleum Corporation Limited (OXC:TSX) announced on June 29th that regarding the Debt Settlement Agreement executed by the Corporation on June 22, 2020 relating to the proposed settlement of an outstanding loan between a subsidiary of the corporation, as borrower, and AOG International Holdings Limited, as lender.

Corporation has applied to the Toronto Stock Exchange for relief from certain requirements of subsection 501(c) of the TSX Company Manual pursuant to the financial hardship exemption available to companies listed on the TSX in certain circumstances.

Oryx Petroleum is a Calgary based international oil exploration, development and production company focused in Africa and the Middle East. Company has a market cap of $108 million and approximately 515 million shares outstanding.

TAG Oil Ltd. (TAO:TSX) announced on June 29th that the release of its annual financial statements for the fiscal year ending March 31, 2020. Company will be relying on the 45-day filing and delivery extension for periodic filings required to be made on or before August 31, 2020. Company expects that the above-mentioned filings will be filed on or around August 13, 2020, and in any event within the deadline required for such filings in accordance with BCI 51-517.

TAG Oil Ltd is a Calgary based Canadian oil and gas exploration, development and production company. It operates through three geographical segments including Canada, New Zealand, and Australia. Company has a market cap of $29 million and approximately 85 million shares outstanding.

TransGlobe Energy Corporation (TGA:TSX) announced on June 29th an operations update. Production has averaged 14,447 Boepd in Q2 2020 to date (April 14,378 Boepd, May 14,334 Boepd and June 1 to June 19 14,740 Boepd) versus 14,997 Boepd in Q1 2020. Production guidance for 2020 remains unchanged at an average of 13,300 to 14,300 Boepd.

Business continuity plans remain effective across company locations in response to COVID-19 with no health and safety impacts or disruption to production. Negotiations continue with the Egyptian government to amend, extend and consolidate the Company’s Eastern Desert concession agreements.

TransGlobe Energy Corporation is Calgary based oil and gas exploration and development company whose current activities are concentrated in the Arab Republic of Egypt and Canada. TransGlobe has a market cap of $175 million and approximately 72 million shares outstanding.

More news on Oilpatch Review

Quote of the day

Paul Jackson, “Be very, very careful what you put into that brain, because you will never, ever get it out again.”

 Did you know?

 Ancient Sumerians, Assyrians and Babylonians used crude oil and asphalt collected from large seeps as a source of fuel and lubricant.

 

prices compiled and updated on a regular basis by Canadian Insight

City

 

Victoria

Vancouver

Calgary

Edmonton

Saskatoon

Regina

Brandon

Winnipeg

Hamilton

Ottawa

Toronto

Montreal

Halifax

Moncton

St. John’s

 

 

$ / liter

 

1.119

1.169

0.789

0.759

0.819

0.859

0.849

0.829

0.819

0.829

0.839

0.969

0.879

0.989

1.009

 

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     WCS  / WTI

 Price Spread $9.50

  June 30, 2020

Text Box: Cross Canada  Gasoline Prices
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