Canadian Insight

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Updated on Tuesday, August 20, 2019

Changes to Enbridge Pipeline allocation volumes is of serious concern to Alberta crude oil producers— August 20, 2019

Enbridge Inc’s plan to introduce long-term fixed volume contracts on its Mainline system has irritated at least one major oil producer. MEG Energy has  submitted an open letter to the NEB in objection to the intended changes by Enbridge.

Enbridge is planning to switch from a monthly nomination system to “contract carriage” . This comes at a time when Canadian export pipelines are so constrained the Alberta government has imposed oil production curtailments, and has drawn fierce criticism from small producers.

Smaller producers are concerned that large U.S. refiners like BP Plc will snap up most of the contracted capacity, leaving them scrambling to secure space on the smaller allocations of the pipeline volumes.

MEG’s CEO Derek Evans commented, "“It is MEG’s position that Enbridge’s contract carriage proposal should be abandoned, as it is not in the overall public interest."

ARC Energy Research market analyst commented on the Enbridge changes.  Jackie Forrest said the 10% of the Mainline left open for spot shipping would likely be heavily rationed, resulting in more barrels getting stranded in Alberta each month and being sold off cheap.

 

National Energy Board opens yet another round of consultation  — June 24, 2019

National Energy Board announced today that it wants to hear from affected parties, the public and Trans Mountain Pipeline ULC on how the NEB should proceed with regulatory processes for the Trans Mountain Expansion Project, including compliance with Project conditions and approval of the detailed route.

The NEB's proposed approach is to continue the processes that were underway, and to rely on decisions and orders that were issued prior to the Federal Court of Appeal decision on the Project in August 2018, unless relevant circumstances have materially changed.

Most will be wondering, “Why NEB needs further consultation when the federal government has approved the pipeline project, conditions have been laid and that construction will begin in September.”

 

Federal government approves construction of Trans Mountain pipeline twining — June 18, 2019

The Trudeau Liberal administration has given approval to the Trans Mountain project. This is the second time the federal government has give the go ahead.

 A Supreme court ruling, last August, struck down the project, as it felt that there was not enough consultation with indigenous people.

The Trudeau government believes that construction could possibly begin late this summer. It is likely that with all necessary permits the project won’t begin until after the federal election.

Canadian Association of Petroleum Producers slams Trudeau administration — June 13, 2019

Canadian Association of Petroleum Producers (CAPP) slammed the Trudeau Liberals for damaging the future of Canadian economic growth by not passing the amendments proposed by the senate to Bill C-69.

CAPP stated that Bill C-69, as it stands,  goes beyond hurting Canada’s oil and gas industry. It will drive Canadian investments out of Canada. It will prevent future nation building projects.

The federal government gave Canadians a false choice and it has chosen environment over economic growth. The fact is, Canada can do both and be successful.

The Trudeau administration has failed to listen to thousands of Canadians and their valid suggestions to Bill C-69. The amendments the Senate asked for were ignored.

CAPP went on to conclude that there will be huge economic repercussions because of the new restrictive  legislation. Canada will lose, this year alone, $37 billion in oil and natural gas investments.

A large rally in Calgary offers support for the oil and gas industry — June, 12, 2019

A gathering of over 4000 people in Calgary showed their support for the oil and gas industry and in particular sending a message to Ottawa to approve the twinning of the TransMountain Pipeline.

Premier Scott Moe of Saskatchewan called for the repeal of Bill C48 and C69. The crowd cheered as the premier spoke and stated that these two federal legislations will not only affect the economy of the western provinces but the whole economy of Canada.

Premier Scott Moe slammed the federal carbon tax imposed by the Trudeau Liberal government. Moe stated that the federal tax is nothing but a tax grab and will eventually affect the whole economy of Canada.

Prime Minister Justin Trudeau and federal Natural Resources Minister Amarjeet Sohi have  refused to say when and what decision is coming regarding the twining of the TransMountain pipeline project.

Canada’s Oil and Gas Producers  making a request to ‘vote for energy’— June 4, 2019

Canadian Association of Petroleum Producers are asking all Canadians that they should seriously consider who they vote for in the next federal election this coming fall.

CAPP released its federal energy platform for 2019. It outlines the positive issues surrounding oil and natural gas and the possibilities to generate real economic growth.

CAPP stated that it will be a defining moment as to the direction of the oil and gas energy. It is important to note which political party will support and encourage growth and prosperity in the energy sector.

Canada has a golden opportunity to prosper, generate vibrant economic growth and increase employment if the right political direction is chosen to govern. World oil and natural gas demand is on the increase and Canada can become a major supplier.

 

British Columbia’s top court rules that the province has no right to restrict oil shipments — May 24,, 2019

British Columbia’s top court ruled that the province has no right to  restrict oil shipments through provincial borders.

The five judge panel agreed unanimously that the amendments to B.C.’s Environmental Management Act were unconstitutional. The provincial act would interfere with the federal regulator (National Energy Board) which has exclusive jurisdiction over interprovincial pipelines.

The court’s report stated that the provincial act would have placed conditions and interfered with the movement of heavy oil through a federal undertaking. If passed it could have stopped all oversea exports of heavy oil.

The B.C.’s Environmental Management Act would have made it mandatory for all oil shipments moving through the province to apply for a “hazardous substance permit”. The province would have also the right to cancel or suspend a permit if it felt that the oil shipment contravened provincial environmental laws.

This court ruling marks a win for the expansion of TransMountain pipeline expansion project. It is also a win for the province of Alberta, all Canadians and all oil industry in Canada.

Canadian Municipalities are concerned about Bill C-69 and its consequences — May 2,, 2019

Coalition of Canadian Municipalities for Energy Action has expressed their concerns and suggested amendments towards Bill C-69 with Ministers, Senators, Members of Parliament, and other key political decision-makers in Ottawa.

 Bill C-69 does not clearly outline the financial and administrative burden for municipalities. There is concern that this uncertainty will lead business and industry to invest elsewhere. The purpose of the bill should be to improve investor confidence, strengthen the Canadian economy, encourage prosperity, and improve competitiveness. Municipalities would like to see these principles reflected in the legislation.

With the bill's proposed new regulatory structure there is concern that progress on municipal infrastructure projects will be impeded. The language of the bill is open to interpretation and does not provide the necessary clarity on municipal land-use planning, waterway use, indigenous consultation or federal grants.

CAPP informing Newfoundland electorate  of the value of oil and gas industry to the province and Canada — May 1, 2019

Canadian Association of Petroleum Producers are informing the citizens of Newfoundland and Labrador that they should be informed about how valuable the oil and gas industry is to the economy of that province and Canada as a whole.

Paul Barnes, director for CAPP, and speaking for the organization, stated, “Newfoundlanders and Labradorians need to be well-informed and have a clear picture of how we can make our province better before heading into the election. A vote for energy sends the message that Newfoundland and Labrador can, and should, be supplying energy to the world.

A healthy oil and natural gas industry benefits all of Canada, and builds on the backbone of our economy. As Newfoundlanders and Labradorians head to the polls, the message is that a vote for energy is a vote to build a prosperous Newfoundland and Labrador.”

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — August 20, 2019

Bonterra Energy Corp. (BNE:TSX) announced that the company has identified, responded to, and is addressing, a release of emulsion related to a pipeline that severed following a creek bank collapse due to recent flooding approximately 25 km southwest of Drayton Valley, AB.

On the afternoon of August 15, 2019, Bonterra identified a release of emulsion from a pipeline that severed due to the complete collapse of a creek bank following recent flooding at Washout Creek. Response was immediately initiated, and since that time, 24-hour clean-up operations have, and will, continue until all recoverable fluid has been retrieved.

Bonterra is working closely with regulatory authorities, area stakeholders have been notified, and the company will remain in contact with them until the incident is resolved.

Bonterra Energy Corp. is a Calgary based conventional oil and gas producer with operations in Alberta, Saskatchewan and British Columbia. Company has a market cap of $228 million and approximately 33 million shares outstanding.

Enbridge Inc. (ENB:TSX) announced that none of its outstanding Cumulative Redeemable Preference Shares, Series 3 (Series 3 Shares) will be converted into Cumulative Redeemable Preference Shares, Series 4 of Enbridge (Series 4 Shares) on September 1, 2019.

After taking into account all conversion notices received from holders of its outstanding Series 3 Shares by the August 19, 2019 deadline for the conversion of the Series 3 Shares into Series 4 Shares, less than the 1,000,000 Series 3 Shares required to give effect to conversions into Series 4 Shares were tendered for conversion.

Enbridge Inc. is a Calgary based energy generation, distribution, and transportation company in the U.S. and Canada. Its pipeline network consists of the Canadian Mainline system, regional oil sands pipelines, and natural gas pipelines. Company has a market cap of 83 million and approximately 1.9 million shares outstanding.

Enerplus Corporation (ERF:TSX) announced that a cash dividend in the amount of CDN$0.01 per share will be payable on September 16, 2019 to all shareholders of record at the close of business on August 30, 2019. The ex-dividend date for this payment is August 29, 2019. Dividends paid by Enerplus are considered an "eligible dividend" for Canadian tax purposes.

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.

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Saturn Oil & Gas Inc. (SOIL:TSXV) announced on August 19th that it has commenced its second half 2019 drilling program focused on increasing production and reserves from the Viking light oil play in west-central Saskatchewan. Saturn commenced drilling five extended reach horizontal (“ERH”) wells in early August, largely focused in its core Prairiedale area.

The first well was spud on August 8, with the balance to be drilled over the next two weeks. Company anticipates that all five wells will be completed and equipped by early September and on-line by the last week of September, which is expected to have a positive impact on production volumes for the fourth quarter of 2019.

Saturn Oil & Gas Incorporated is a Calgary based oil and gas company with assets and operations in Saskatchewan. It has a market cap of $32 million and approximately 234 million shares outstanding.

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Altura Energy Inc. (ATU:TSX) announced its financial and operating results for the three and six months ended June 30, 2019. Company reported petroleum sales reached $43.89 million and experienced a net income of $1.04 million in the second quarter of 2019.

Company produced an average of 1,591 boe per day, an increase of 60 percent on an absolute and per share basis from the second quarter of 2018. Production was affected by natural declines as no new wells were brought on production, and by well down time from workover activities in the quarter. Corporation’s operating netback averaged $26.56 per boe, consistent with the first quarter of 2019 operating netback of $26.85 per boe.

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.

ARC Resources Ltd. (ARX:TSX) announced a monthly dividend amount of $0.05 per share for September 16, 2019 to shareholders of record on August 30, 2019. The ex-dividend date is August 29, 2019. As at August 15, 2019, the trailing 12-month payments to shareholders total $0.60 per share.

Arc Resources is a Calgary based oil and gas company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. Company has a market cap of $3e.2 billion and approximately 354 million shares outstanding.

Emerald Bay Energy Inc. (EBY:TSXV) announced that the corporation has closed its 33,333,333 units were issued (of which 14,034,333 Units were acquired by directors and officers of the corporation and 10,273,333 Units were acquired by insiders of the corporation) at a price of $0.015 per Unit, for aggregate consideration of $500,000. Each Unit consisted of one common share of the corporation and one share purchase warrant (each full Warrant shall entitle the holder thereof to purchase one additional common share of the corporation for a period of 12 months from the issuance of the Units at a price of $0.05).

Emerald Bay Energy Inc. is a Calgary based energy company with oil producing properties in southwest Texas as well as non-operated oil and natural gas interests in Central Alberta. Company has a market cap of $4.2 million and approximately 277 million shares outstanding.

SECURE Energy Services Inc. (SES:TSX) announced that its Board of Directors has declared a dividend for the month of September 2019 of $0.0225 per common share payable on or about September16, 2019 to shareholders of record on September 1, 2019. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).

Secure Energy Services Inc. is a Calgary based company which provides treatments and disposal services to the oil and gas industry. Company has a market cap of $1.5 billion and approximately 159 million shares outstanding.

TORC Oil & Gas Ltd. (TOG:TSX) announced that a dividend of $0.025 per common share will be paid on September 16, 2019 to common shareholders of record on August 31, 2019. The ex-dividend date is August 29, 2019, with payment to be made in cash or common shares at the election of the shareholder. This dividend has been designated as an "eligible dividend" for Canadian income tax purposes.

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.

Vermilion Energy Inc. (VET:TSX) announced a cash dividend of $0.23 CDN per share payable on September 16, 2019 to all shareholders of record on August 30, 2019. The ex-dividend date for this payment is August 29, 2019. This dividend is an eligible dividend for the purposes of the Income Tax Act (Canada).

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 that a cash dividend of Cdn. $0.0285 per common share in respect of August operations will be paid on September 16, 2019 to shareholders of record on August 31, 2019. 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

Peter Lynch, “If you find a stock with little or no institutional ownership, you’ve found a potential winner.”

Did you know?

There are over 4600 oil platforms and more than 13,000 producing wells in the Gulf of Mexico with a daily output of 1.8 million barrels per day. Below the subsurface waters, there is a network of 31,000 miles of pipelines which connect the U.S. mainland with the Gulf oil and gas producing wells. Deep water reserves in the region are estimated to be 1.5 billion barrels. Gulf of Mexico provides  U.S. with 18% of the total oil supplies.

 

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

 

1.409

1.409

0.959

0.939

1.189

1.119

1.119

1.079

1.159

1.179

1.179

1.239

1.119

1.179

1.199

 

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     WCS  / WTI

 Price Spread $13.30

  August 20, 2019

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