Canadian Insight

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Updated on Monday, September 24, 2018

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Government orders NEB to reconsider recommendations for Trans Mountain Pipeline approval — Sept. 21, 2018

Federal Natural Resources Minister Amarjeet Sohi that he has ordered the National Energy Board to reconsider its recommendations and take into the account the effects of  project related marine shipping.

Honorable Amarjeet Sohi stated, "Today, we have instructed the National Energy Board to reconsider its recommendations, taking into account the effects of project-related marine shipping. The NEB will be required to complete a thorough and prompt review and deliver its report within 22 weeks."

He went on to conclude, “"Today's announcement represents one important step towards addressing issues raised by the Federal Court of Appeal while continuing to deliver the highest levels of marine protection that Canadians expect."


Consortium planning a new refinery in Alberta — Sept. 17, 2018

A consortium led by China’s Sinopec Corporation is planning construction of a new refinery in northern Alberta. The refinery would be situated near sourced bitumen and process 167,000 barrels of crude oil per day. Estimated cost of the project is $8.5 billion dollars.

Sinopec, a group of indigenous investors, China State Construction Engineering Corporation and Alberta’s management company, Teedrum, are all involved in initial planning stages and will be submitting their proposals to the federal and provincial governments. Expectations are that an approval will be given in two years.

Heavily discounted crude oil and large dependable sources of bitumen are only some of the factors that drew the consortium to the region to plan construction of a new refinery.

Once the refinery is completed, China will import refined petroleum products. It is likely that these products may be moved by rail to a west coast loading terminal.

A previous proposal in 2012, headed by indigenous group, was denied approval by the Alberta government. It was then stated that it was economically unfeasible. Since then, the abandonment of proposed pipelines and discounted Canadian crude oil, have all changed the economics of the initial and the new proposal.


Trans Mountain Pipeline expansion stopped by court order — Aug. 30, 2018

The Federal Court of Appeal ruled that the expansion of the Trans Mountain Pipeline was flawed and that the National Energy Board must redo its review.

The court also found that the federal government failed in its duty to engage in meaningful consultations with First Nations and a tanker traffic review of the project was not conducted before giving the green light to the project.

The court decision means the government will have to redo part of its consultations with Indigenous groups and conduct a meaningful tanker traffic study in the affected route.

Informed Kinder Morgan shareholders gave a 99% approval to the proposed Canadian government takeover following the court decision to scuttle the project.


US District Court creates another setback for Keystone XL — Aug. 16, 2018

A federal judge in Montana ordered yesterday that the US State Department do another environmental review of the revised pipeline route. This judicial move will stall and delay the project once again.

The Keystone XL pipeline was proposed over a decade ago and has seen a whole variety of blockades — from President Obama’s stance stopping the project, to legal blocks and challenges set by land owners and environmentalist along the proposed route.

The election of President Trump and the full support of Congress seemed like a sure bet that the $8 billion  project would go ahead.

There has been no announcements made by TransCanada or the US State Department on the court decision.

Prior to this court decision, TransCanada Corporation had stated that it would begin construction of the pipeline in the second quarter of 2019.


Closure of Trans Mountain Pipeline deal slated for end of this year — Aug. 9, 2018

Canada Morgan Kinder announced that it expects the deal to sell its Trans Mountain Pipeline to the Canadian government to close in the last quarter of 2018.

Kinder Morgan shareholders will vote on the deal at their scheduled August 30, 2018 meeting. Expectations are that shareholders will approve the takeover.

The Canadian government announced on May 30, 2018 that it would buyout the Trans Mountain pipeline for $4.5 billion. Trans Mountain expansion would be covered under a credit faculty of the deal.

The federal purchase will still have another hurdle to clear. The American government must approve the Canadian government takeover of the pipeline.


Study shows carbon market is chasing away jobs at a big cost — June 13, 2018

Montreal Economic Institute has conducted an extensive study on government attempts to lower carbon emissions. The report concludes that there has been no impact on lowering greenhouse gases and that only jobs have been lost.

The study looked at three major areas where governments took action to reduce the use of hydrocarbons. The provinces of Ontario and Quebec were the focus on in Canada while the state of California was looked at in the US.

The study concluded that regardless of the amount hydrocarbons were taxed, the effect was insignificant  in reducing greenhouse gases. Demand and use of hydrocarbons remained the same. Higher prices on hydrocarbons only drove away jobs as employers attempted to cut costs.

Germain Belzile, author of the report states, "If the goal of the governments of Quebec and Ontario is to address the problems caused by climate change, then they should take a global approach. If such an approach, or one that at least encompasses North America, is not feasible, we should just put our trust in technological progress and innovation. We would reach our objectives just as quickly, and there would be a lot less waste.”

Joint Review Panel to study a proposed new oil sands project — June 7, 2018

Teck Resources Limited has submitted a proposal to the National Energy Board for construction of a 260,000 barrels per day oil sands mining operation near Fort McMurray.  

The proposal, “Frontier Oil Sands Mine Project”, will be reviewed by the Joint Review Panel whether Teck Resources has submitted enough information to hold public hearings.

If information submitted is adequate, the Joint Review Panel may begin public hearings as early as this coming September.  Submissions will be accepted from those concerned to hold hearings at specific locations.

Hearings will be open to the public and can be observed through a live webcast during the proceedings.

PETRONAS enters into agreement to purchase part ownership — May 31, 2018

PETRONAS has announced that its wholly owned entity, the North Montney LNG Limited Partnership, has entered into a Purchase and Sales Agreement for an equity position in the LNG Canada project in Kitimat, British Columbia.

Pending upon regulatory approval, PETRONAS will take a 25% ownership in the LNG project. No disclosure was made as to the purchase price but several reliable sources have stated that PETRONAS is willing to invest up to $31 billion in the project. The transaction is expected to be completed in several months.

 PETRONAS President and Group Chief Executive Officer Tan Sri Wan Zulkiflee Wan Ariffin commented, ""PETRONAS is pleased to be part of the LNG Canada project. As one of the world's largest LNG producers, PETRONAS looks forward to adding value to this venture through our long-term expertise and experience across the LNG value chain. We are committed to deliver LNG and natural gas, the cleanest fossil fuel in the world, to the growing global energy market."

PETRONAS is a Malaysian oil and gas company founded in 1974. Petronas has grown to be an integrated international oil and gas company with business interests in 35 countries. It is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining, marketing and distribution of petroleum products.


Our most recent ‘Shouts & Toots’  from the Oil Patch  — September 24, 2018

Africa Energy Corp. (AFE:TSXV) announced on September 24th that the Cormorant-1 exploration well on Petroleum Exploration License 37offshore the Republic of Namibia encountered non-commercial hydrocarbons. Africa Energy holds a 10% effective interest in PEL 37.

The Cormorant-1 exploration well penetrated a 50-meter fan system within the Cormorant Prospect. Interbedded sandstones were encountered in the primary objective of the Cormorant-1 well but proved to be water bearing. Wet gas signatures, indicative of oil, were encountered in the overlying shale section. Important geological data has been gained from this well, and, in combination with high quality 3D seismic data, will provide valuable insights into the future prospectivity of PEL 37 where several additional prospects with significant resource potential have been mapped.

Jan Maier, Africa Energy's VP Exploration, commented, "While we are disappointed that our first well this year did not discover commercial hydrocarbons, we are encouraged that it confirmed the existence of a mid-Cretaceous aged deep marine fan sandstone system with further potential in the play. Our second well is scheduled for December and will target a larger prospect with a higher chance of success on Block 11B/12B in South Africa."

Africa Energy Corp. is a Vancouver based Canadian oil and gas company with exploration assets offshore Namibia and South Africa. Company has a market cap of $682 million and approximately 150 million shares outstanding.

Pembina Pipeline Corporation (PPL:TSX) announced on September 24th an increase to its 2018 Adjusted EBITDA guidance range to $2.75 to $2.85 billion. Company is also pleased to announce that in conjunction with incremental volume commitments from customers on the Peace pipeline, Pembina will be developing additional pipeline and terminalling infrastructure in the Wapiti region near Grande Prairie, Alberta and in northeast B.C. The new infrastructure will have a combined aggregate capital cost of approximately $120 million and will be underpinned by long-term, take-or-pay commitments.

Pembina continues to experience strong demand for transportation services across the liquids-rich areas of the Western Canada Sedimentary Basin. Since sanctioning the Phase VI expansion earlier this year, Pembina has continued to add long-term firm service commitments on the Peace and Northern Pipeline systems. Since Phase VI was originally announced in May 2018, Pembina has secured a total of 50,000 barrels per day of additional firm service commitments. As a result, peak firm volume commitments will reach approximately 885,000 bpd in 2019.

Pembina Pipeline Corporation is a Calgary based transportation and midstream service provider that has been serving North America's energy industry for over 60 year. Company has a market cap of $22.5 billion and approximately 506 million shares outstanding.

Point Loma Resources Ltd. (PLX:TSXV) announced on September 24th the acquisition of lands providing entrance into the Rex (Upper Mannville) oil play in the Leduc area of Alberta and provides an operational update across its core focus areas.

With the addition of these properties and a large land position in excess of 160,000 net acres (over 250 net sections) targeting the Mannville (Upper and Lower), Banff and Duvernay oil opportunities and commencement of drilling activity, the corporation is strategically positioned to unlock significant upside value across its assets.

Point Loma is a Calgary based oil and gas exploration and development company focused on conventional and unconventional oil and gas reservoirs in west central Alberta. Company has a market cap of $17.5 million and approximately 51 million shares outstanding.

Top Strike Resources Corp. (VENI:CNX) announced on September 24th the completion of an initial tranche of its previously announced non-brokered private placement of units of the corporation for gross proceeds of $5.6 million.

Company has decided to delist its shares from the NEX Board of the TSX Venture Exchange and the concurrent listing of the common shares on the facilities of the Canadian Securities Exchange. It is anticipated that the shareholders of the corporation will be asked to approve a change of the corporation's name to "Vencanna Ventures Inc." at a special meeting called for such purpose.

Top Strike Resources is a Calgary based company anticipating to change its focus to the cannabis industry. It has a market cap of $47 million and approximately 296 million shares outstanding.

                                       * * * * * * * 

Africa Energy Corp. (AFE:TSX) announced on September 21st  that it acknowledges the stock trading halt in Pancontinental Oil and Gas NL today pending an announcement regarding the Cormorant-1 well offshore the Republic of Namibia. Africa Energy is not aware of any material non-public information.

Pancontinental Oil and Gas has requested a stock trading halt in anticipation of drilling results for the Cormorant-1 well on Petroleum Exploration License 37 offshore Namibia. Pancontinental Oil and Gas trading has been halted until the earlier of a market announcement or market open on Tuesday, September 25, 2018.

As previously announced, the Cormorant-1 well was spud on September 4, 2018, and Africa Energy holds a 10% effective interest in Pancontinental Oil and Gas 37. Africa Energy owns one-third of Pancontinental Namibia (Pty) Ltd, a subsidiary of Pancontinental Oil and Gas that holds a 30% participating interest in PEL 37, resulting in a 10% effective interest for the company.

Africa Energy Corp. is a Vancouver based Canadian oil and gas company with exploration assets offshore Namibia and South Africa. Company has a market cap of $682 million and approximately 157 million shares outstanding.

Alvopetro Energy Ltd. (ALV:TSXV) announced on September 21st  that it has been awarded a contract for the construction of our Natural Gas Treatment Facility in the state of Bahia in Northeast Brazil. This facility is the key strategic asset underpinning our natural gas development project and will be the first 100% independently owned treatment facility in Brazil capable of delivering sales specification natural gas.

Corey Ruttan, President and Chief Executive Officer of Alvopetro commented, "We are extremely excited to be working with Enerflex on this precedent setting development. This agreement brings the confidence of working with a world-class fabrication, construction and operating company, delivering a key component of our infrastructure, and reducing our project financing requirements. We look forward to working with Enerflex as we continue to expand our natural gas business in Bahia."

Over the next few weeks company expects to award the turnkey contract for the construction of the 11-kilometre transfer pipeline from the Caburé unit to the Facility. Alvopetro has secured the land for the Facility, completed all field survey and initial permitting work, and the application for construction of the pipeline and the Facility was submitted for regulatory approval in April 2018.

Company's Gomo natural gas project will also connect to the 11-kilometer transfer pipeline via an 8-km transfer pipeline to be built in 2019, following the stimulation of the 183(1) well planned near the end of 2018. Company anticipates approximately $1.4 million of capital expenditures for the Caburé and Gomo development later in 2018 and $6.0 million in 2019, and are in the process of securing the remainder of the project financing for this development.

Alvopetro Energy Ltd is a Calgary based company engaged in the exploration, acquisition, development and production of hydrocarbons in Tucano, reconcavo, and camamu almada basins onshore Brazil. Company has a market cap of $37 million and approximately 85 million shares outstanding.

Tidewater Midstream and Infrastructure Ltd. (TWM:TSX) announced on September 21st that its Board has declared a dividend for the third quarter 2018 of $0.01 per common share payable on or about October 31, 2018 to shareholders of record on September 28, 2018. The ex-dividend date is September 27, 2018. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).

Tidewater Midstream and Infrastructure Ltd is a Calgary based company engaged in providing midstream infrastructure and a natural gas storage facility. Company has a market cap of $451 million and approximately 329 million shares outstanding.

More news on Oilpatch Review


Today’s Inspirations

“In the presence of trouble, some people buy crutches while others grow wings.”

Quotes are directly taken from a book entitled, ‘Phrase A Day Inspirations’, written by Bernie Shimko. ‘Canadian Insight’ wishes to thank Bernie and his wife Adeline for permitting the use of their inspiring quotes.

Did you know?


Drilling rigs were once built on site and left in place after the completion of the well. In recent times drilling rigs are expensive custom built machines that are capable of being moved from well to well. Some light duty drilling rigs are similar to a mobile crane. Larger land rigs are now being made to be disassembled into multiple sections and loads in order to move to a new location, a process which can at times take from several days even a week or more.


prices compiled and updated on a regular basis by Canadian Insight

















St. John’s



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     WCS  / WTI

 Price Spread  $32.00

  September 24, 2018

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