Canadian Insight

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Updated on Friday, April 09, 2021

The clock is ticking on Enbridge Line 5 before it’s shutdown — March 31, 2021

In just a little over a month, on May 12, 2021, Enbridge Line 5 will be forced to close down by the state of Michigan.

On November 2019, Michigan Governor Gretchen Whitmer  will withdraw easement rights which had previously allowed Enbridge Line 5 to carry crude oil through that pipeline.

It appears that the governing Trudeau left leaning Administration has swept this under the rug and believes that this serious energy problem will solved with solar panels and wind mills.

This line is a very critical energy artery for the provinces of Ontario and Quebec. It delivers half of the crude oil required by refineries for the two provinces.

Ontario alone receives 540,000 barrels of crude oil for the refineries in Sarnia. These refineries supply 100% of all fuel needed by the Pearson Airport.

Should Enbridge Line 5 be closed it will require a miracle to fill the void.

Shutting down Enbridge Line 5 would require 2,000 semi truck units, or 800 rail cars of crude oil a day to keep refineries in eastern Canada in a normal day operation.

Closure of the refineries in Sarnia area alone would affect the employment of 5000 skilled labor jobs and  23,500 associated jobs.

 

Supreme Court Ruling on Canada’s carbon tax introduces very serious implications March 31, 2021

Last week’s  Supreme Court ruling that the federal government has the legal right to tax carbon emissions has very serious implications.

This ruling has made it legal for the federal government to encroach on provincial rights to tax and infringe on provincial jurisdiction to govern.

It is viewed by Western Canadians as another demonstration by the federal government to refuse to listen and alienate the west even further.

Some political pundits fear that this decision by the Supreme Court will help push Alberta and Saskatchewan to separation from Canada.

 

CP Railway announces takeover of Kansas City Southern  — March 23, 2021

Canadian Pacific Railway announced that it will proceed to takeover Kansas City Southern Railway. The proposed  deal is worth US $25 billion.

The resultant merger would make a railway network expanding from Canada into the US Gulf states and Mexico.

The merger could impact the crude by rail volumes and increase movement of Canadian crude oil into the Gulf coast refineries.

The cancellation of Keystone XL project has stopped expansion of crude oil sales into southern US and exports into the global marketplace.

The business combination of the two railways is expected to pass by US and Canadian regulators by second quarter of 2022.

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — April 9, 2021

Enerflex Ltd. (EFX:TSX) announced that it will release its first quarter 2021 financial results on May 5, 2021. These results will be available on the Enerflex website. Analysts, investors, members of the media, and other interested parties are invited to participate in a teleconference and audio webcast on Thursday, May 6, 2021 at 8:00 a.m. MDT to discuss the first quarter 2021 financial results and operating highlights.

The conference will include an operations review by Marc Rossiter, President and Chief Executive Officer, a review of financial results by Sanjay Bishnoi, Senior Vice President and Chief Financial Officer, and a question and answer period.

Enerflex Ltd. is a Calgary based supplier of products and services to the global energy industry. Company has a market cap of $735 million and approximately 90 million shares outstanding.

Hillcrest Petroleum (HEAT:CNX) announced on April 9th that its rebranding as Hillcrest Energy Technologies, Ltd., choosing an identity more representative of the company’s dedication to transitioning from fossil fuel production to clean tech innovation and IP development. CEO Don Currie also announced the appointment of Kylie Dickson to the Board of Directors of the company.

Hillcrest Energy Technologies CEO, Don Currie commented, “Hillcrest is committed to driving positive innovation on all fronts, and it is important that our brand refresh also carries this message. Building shareholder value by owning, developing and optimizing clean energy technologies is an absolute priority, but the team is equally focused on creating a sustainable business environment that embraces important industry and societal shifts occurring around the world.”

Hillcrest Petroleum Limited is a Vancouver based oil and gas company with operations in Canada and potential producing oil and gas assets in US. Company has a market cap of $3.9 million and approximately 113 million shares outstanding.

Inter Pipeline Ltd. (IPL:TSX) announced on April 9th the declaration of a cash dividend of $0.04 per share for April 2021. This dividend will be paid on or about May 14, 2021 to shareholders of record on April 22, 2021. This dividend is designated as an "eligible dividend" for Canadian tax purposes.

Pipeline's objective is to provide investors with sustainable monthly cash dividends, with dividend growth upside tied to the development of Inter Pipeline's portfolio of growth projects.

Inter Pipeline Ltd. is a major petroleum transportation, natural gas liquids processing, and bulk liquid storage business based in Calgary, Alberta. Company has a market cap of $8.9 billion and approximately 407 million shares outstanding.

PetroShale Inc. (PSH:TSX) announced the closing of its previously announced recapitalization transaction which included a private placement of additional equity, a rights offering and the exchange of all outstanding Preferred Shares.

The Rights Offering, combined with the concurrent Private Placement to the ccompany's two largest shareholders as described more fully below, raised total aggregate gross proceeds of $30 million.

PetroShale intends to release its 2021 first quarter operating and financial results after markets close on Wednesday May 19, 2021.

PetroShale is a Calgary based oil company engaged in acquisition, development and consolidation of interests in the North Dakota Bakken and Three Forks region. Company has a market cap of $203 million and approximately 192 million shares outstanding.

Pieridae Energy Limited (PEA:TSX) announced that it has granted 5,000,000 common share purchase warrants to Erikson National Energy Inc. . Each Warrant shall be exercisable to purchase one fully paid and non-assessable common share in the capital of Pieridae at an exercise price equal to CAD$0.70 per common share.

Pieridae Energy Limited is a Calgary based corporation focused on the development of integrated energy-related activities, from the exploration and extraction of natural gas to the development, construction and operation of the Goldboro LNG facility and the production of LNG for sale to Europe and other markets. Company has a market cap of $137million and approximately 36 million shares outstanding.

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AltaGas Ltd. (ALA:TSX) announced on April 8th that it will release its 2021 first quarter financial results on Thursday April 29, 2021 before markets open. A conference call and webcast will be held the same day to discuss the financial results and other corporate developments. Shortly after the conclusion of the first quarter call, a replay will be available commencing at 10:00 a.m. MT (12:00 p.m. ET) on April 29, 2021.

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.

Ballard Power Systems (BLDP:TSX) announced that it will hold a conference call on Tuesday, May 4, 2021 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review first quarter 2021 operating results. Following the call, the webcast will be archived in the 'Earnings, Interviews & Presentations' area of the 'Investors' section of Ballard's website.

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.

Enerplus Corporation (ERF:TSX) announced on April 8th that it has entered into a definitive agreement to acquire assets in the Williston Basin from Hess Corporation for total cash consideration of US$312 million . In connection with the Acquisition, the company has updated its 2021 guidance including an increased production outlook due to operational outperformance year to date.

Company has acquired 78,700 largely contiguous net acres in Dunn County, North Dakota, strategically adjacent to Enerplus' core Bakken position. Acquisition includes 110 net tier one undrilled locations (77% operated) which immediately compete for capital with Enerplus' existing locations.

Enerplus is increasing its 2021 production guidance to 111,000 to 115,000 BOE per day (from 103,500 to 108,500 BOE per day), including 68,500 to 71,500 barrels per day of liquids (from 63,000 to 67,000 barrels per day) based on an eight month contribution from the Acquisition to the Company's 2021 production.

Enerplus is a Calgary based independent North American exploration and production company focused on its crude oil and natural gas assets in Canada and the United States. Company has a market cap of $2.8 billion and approximately 244 million shares outstanding.

Inter Pipeline Ltd. (IPL:TSX) announced that it will report first quarter 2021 operating and financial results under a new business structure to align with how it manages budgets and commercially operates its business. Inter Pipeline was previously organized into four businesses: oil sands transportation, conventional oil pipelines, NGL processing and bulk liquid storage. Effective January 1, 2021, these four segments have been repositioned into four new segments: transportation, facilities infrastructure, marketing and new ventures.

Inter Pipeline will announce its first quarter 2021 financial and operating results on May 6, 2021. A conference call and webcast has been scheduled for May 7, 2021 at 11:00 a.m. MT (1:00 p.m. ET).

Inter Pipeline Ltd. is a major petroleum transportation, natural gas liquids processing, and bulk liquid storage business based in Calgary, Alberta. Company has a market cap of $8.9 billion and approximately 407 million shares outstanding.

Ovintiv Inc. (OVV:TSX) announced that it plans to hold its first quarter 2021 conference call at 9 a.m. MT, on April 29, 2021. The Company plans to release its financial and operating results after market close, Wednesday, April 28, 2021.

Ovintiv Incorporated is the former Encana Corporation which was based in Calgary. It has changed its name and moved its headquarters to Denver Colorado. Company is focused on developing oil and natural gas reserves. Ovintiv has a market cap of $5.4 billion and approximately 27 billion shares outstanding.

Stampede Drilling Inc. (SDI:TSX) announced that it has appointed Mr. Murray Hinz to its Board of Directors. Mr. Hinz is a Chartered Accountant with over 25 years of experience as a senior executive and providing business financial advisory services.

Stampede Drilling Inc. is a Calgary based company engaged in the provision of drilling rig services to the oil and natural gas industry in North America. Stampede's current principal markets for its services are the provinces of Saskatchewan, Alberta and British Columbia. Company has a market cap of $47.5 million and approximately 132 million shares outstanding.

More news on Oilpatch Review

 

Quote of the day

Bejamin Franklin, "Being ignorant is not so much a shame, as being unwilling to learn."

Did you know?

The first twin cone rotary drill bit was invented by Howard Hughes Sr. and his partner Walter Sharp in 1909. The twin cone drill bit became an instant success as it was 10 times faster than the previous fishtail designs. The new designed drill bit combined forces of gouging, crushing and powdering through rock formations. The modern day tri-cone rotary drill bit was later developed by Howard Hughes’ engineers in 1933 and patented in 1934. Hughes drill bits dominated in sales for decades. The Hughes Tool Company merged with Baker International in 1987 to form Baker Hughes.

 

prices compiled and updated on a regular basis by Canadian Insight

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     WCS  / WTI

 Price Spread -$9.75

  April 9, 2021

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