Canadian Insight

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Updated on Tuesday, December 01, 2020

Natural Law Energy investing  a serious stake in Keystone XL November 20, 2020

CEO of Natural Law Energy, Travis Meguinis,  has confirmed that the First Nations Alliance will purchase a 12% stake in Keystone XL pipeline.

Travis Meguinis went on to say that Natural Law Energy may also consider further investments in other projects with TC Energy.

Natural Law energy is the second equity partner for Keystone XL. Earlier this year, the province of Alberta announced a $1.5 billion investment in the pipeline project.

 

First nations investors aid completion of Keystone XL November 18, 2020

President elect Joe Biden will find it more difficult to stop construction of the Keystone XL pipeline. TC Energy believes that it has made it more favorable to gain support of the newly elected administration which has vowed to stop construction in the US.

Calgary based company announced on Tuesday that it is building further partnerships with the First Nations and Indigenous groups in Canada and the US. Company also  has agreements with numerous unions who support the construction of the pipeline.

TC Energy has signed a deal with Natural Law Energy, an alliance of Canadian Indigenous communities, for an investment of up to $1 billion in the pipeline project. It is expected that the new investors and TC Energy will close the deal in 2021.

TC Energy is also pursuing to secure an additional $37 billion in added capital projects. 

 

Cenovus Energy buying out Husky Energy — October 26, 2020

Cenovus Energy announced that it will be taking over Husky Energy to create a new integrated oil and gas company.

The boards of each company have entered to a definitive agreement under which Cenovus and Husky will combine in all stock valued at $23.6 billion.

The transaction has been approved by both boards.  It is expected to approved by both shareholders and finalized in the first quarter of 2021.

Husky shareholders will receive 0.7845 of a Cenovus share. They will also receive 0.0651 share purchase warrant for each Husky common share.

 

Saskatchewan’s Premier Scott Moe concerned with the possible Joe Biden win in US presidential election — October 19, 2020

Premier Scott Moe announced last week that he is very concerned with the possible outcome and consequences in the US presidential reelection.

Premier Moe stated that the Democratic candidate, Joe Biden, has repeatedly stated that he would kill the Keystone XL pipeline when he is elected.

The Keystone XL pipeline was rejected by the former president Barack Obama and vice president Biden. There is reason to believe that this would happen again.

The pipeline project is very important to western Canadian oil industry. It would connect western Canada with Gulf oil markets.

 

Joe Biden’s win in US presidential election will have serious repercussions for the oil industry — October 1, 2020

The election of Joe Biden will not only have many changes for all Americans but even more serious repercussions for the American and Canadian oil and gas industry.

Joe Biden has repeatedly stated during his campaign that his government will re-enter the Paris Climate Agreement and  focus on ‘Green Energy’. Biden government intends to bring US emissions to net zero by 2050.

Biden plans to halt all off shore drilling and exploration on federal lands to stop global climate change. He has openly stated that his government would support all climate  related lawsuits against the oil and gas industry.

The policy which will seriously hurt western Canada is the option lost to export heavy crude into the Gulf states. The Democrats headed by Joe Biden intend to stop further construction of the TC Energy Keystone XL pipeline

 

 

OPEC tangled in a losing scenario — September 29, 2019

OPEC’s control over oil prices may be drawing to an end.  The rising global oil inventory is about to get another shot with Libya returning back to exporting oil. Despite sanctions against Iran, it has managed to increase its oil exports.

Earlier this summer, OPEC thought that it had oil exports and oil prices under control and began relaxing its supply quotas.  Saudi National Oil Corporation had plans to increase its oil exports by 160,000 barrels per day by the summers end.

The corona virus pandemic showed signs of relief in mid-summer. It is  now on the increase and is once again skewing the global oil demand. Infections have skyrocketed in India and on the rise in Europe and North America.

Several reports indicate that tankers are now being booked to store crude oil. Mercuria, a multinational commodity trading group, recently announced that crude oil stocks are expected to build before there are any signs in an increase in demand.

 

Alberta’s Premier Jason Kenny is optimistic that oil industry will survive and flourish —September 17, 2020

Alberta’s Premier Jason Kenny stated that his government has not given up on east-west pipeline system that would carry Alberta oil to Saint John, New Brunswick.

The recent re-election of the Progressive Conservative government in New Brunswick and the new Conservative leadership of the Erin O’Tool has created more hope for the oil industry to revive and flourish .

The Alberta premier believes that the election of the Conservative government in Ottawa will make a significant difference to the state of the oil industry.

 Kenny went onto explain that the only reason why the Energy East Pipeline failed was because of the Notley NDP government in Alberta and the Trudeau Liberals in Ottawa. Both want the pipeline to fail.

 

 

Trans Mountain pipeline on schedule to be operational by end of 2022—September 16, 2020

Trans Mountain CEO Ian Anderson reported that the pipeline expansion is on budget and on schedule to open by the end of 2022.

The expansion will triple the capacity of the pipeline connecting Alberta’s central oil collection point at Hardisty with the west coast loading terminal in Greater Vancouver.

Last February it was announced that construction costs had risen from the original estimate of $5.2 million to $12.6 billion. This was mainly due to cost overruns from delays by protestors and legal challenges.

There are thirteen committed  oil producers who will be using the pipeline once it is completed.

 

 

Crude oil markets are expected to be stable for remainder of this year and improve in  2021 —August 10, 2020

According to HIS Markit Energy Advisory Service, global crude oil markets have stabilized and are expected to trade between $40 to $45 per barrel for the remainder of this year.

The renown advisory agency predicts that crude oil prices will begin to improve in the second half of 2021. It predicts that oil prices will rise by $5 to $7 next May and pass the $50 mark by mid-summer. 

Improved and more stable oil prices are expected to alleviate the pains in oil industry. Investment capital should once again return to the oil and natural gas sector by this time next year.

 

Keystone XL pipeline project faces more hurdles  — July 9, 2020

US Supreme Court has upheld a lower court ruling which temporarily blocks the continued construction of the Keystone XL pipeline project.

The setback underscores the continued legal delays in construction. Since the beginning of the announced project over a decade ago, environmental groups have thrown legal challenges.

TC Energy is still optimistic that the pipeline will be completed. The project on the Canadian side of the border is unaffected.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our most recent ‘Shouts & Toots’  from the Oil Patch  — December 1, 2020

Gear Energy Ltd. (GXE:TSX) announced an extension to the scheduled date for its semi-annual borrowing base redetermination from November 30, 2020 to December 18, 2020. Gear's syndicated credit facilities currently consist of available credit facilities of $70 million with the semi-annual redetermination due on or before November 30, 2020. Gear and its banking syndicate have agreed to extend the date for completion of the semi-annual borrowing base redetermination to December 18, 2020 to allow for additional time to finalize negotiations and to obtain required approvals.

Gear Energy limited is a Calgary based oil and gas company with operations and assets in western Canada. Company has a market cap of $158 million and approximately 219 million shares outstanding.

Imperial Oil Ltd. (IMO:TSX) announced that it will take an impairment charge of about C$900 million to C$1.2 billion ($923 million) in the fourth quarter as it no longer plans to develop a significant portion of its oil sands in Alberta.

The Canadian energy company said on Monday the assets are non-core, non-producing, undeveloped assets and it does not expect any material future cash expenditures related to the impairment.

The impairment excludes the high-value, liquids-rich portion of Imperial’s unconventional asset, which the company still plans to develop.

Imperial Oil Limited is a Calgary based company focused on upstream operations, petroleum refining operations, and the marketing of petroleum products. Imperial has a market cap of $28.5 billion and approximately 785 million shares outstanding.

New West Energy Services Inc. (NWE:TSXV) announced its third quarter 2020 financial results. Continuing operations revenue was $352,963 in the three months ended September 30, 2020, compared to $2,091,032 in the same period the year prior.

Continuing general and administrative expenses were $220,699 in the three months ended September 30, 2020 compared to $589,530 in same period the year prior. Normalized EBITDAC was negative $64,390 in the three months ended September 30, 2020 compared to $134,288 in the same period last year.

New West Energy Services is a Calgary based company engaged in waste management and environmental services to drilling and production sectors of oil and gas industry. Company has a market cap of $0.68 million and 44 million shares outstanding.

Pan Orient Energy Corp. (POETSXV) announced on December 1st an update on Thailand operations. The L53-DD9 well was put on production using an electrical submersible pump on November 20, 2020 through 12.9 meters of perforations in the CC sand. The well has averaged 980 barrels of oil per day ("BOPD"), 490 BOPD net to Pan Orient's 50.01% equity interest, with a water cut of 0.3%.

The L53-DD4 well had been shut-in since October 10, 2020 due to water handling constraints. The well was producing 21 BOPD (11 BOPD net to Pan Orient's 50.01% equity interest) and with a water cut of 98.5% in the five day period prior to shut-in and workover. The well was put back on production on November 23rd and has averaged 351 BOPD (176 BOPD net to Pan Orient).

Pan Orient is a Calgary based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada. Company has a market cap of $135 million and approximately 55 million shares outstanding.

Suncor Energy Inc. (SU:TSX) announced its 2021 corporate guidance. Company projects an average upstream production of 740,000 to 780,000 barrels of oil equivalent per day. Its expected debt repayment in 2021 of between $500 million and $1.0 billion. Company plans a capital program of between $3.8 and $4.5 billion (sustaining capital of $2.9 to $3.4 billion which includes In Situ well pads); and a $500 million share repurchase program for the fiscal year 2021.

Suncor's 2021 capital program is largely focused on sustaining capital ($2.9 – $3.4 billion which includes In Situ well pads) given the major planned maintenance programs in Oil Sands upgrading operations, Syncrude and Downstream refineries.

Suncor Energy is an integrated energy company. It operates in western Canada, east coast Canada, the United States, and the North Sea. Suncor is based in Calgary. Company has a market cap of $63.4 million and approximately 1.6 billion shares outstanding.

 

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AltaGas Ltd. (ALA:TSX) announced on November 30th that it has completed its issue of $50 million of senior unsecured medium term notes (the "7.5 Year Notes") with a coupon rate of 2.075 percent, maturing on May 30, 2028 and $200 million of senior unsecured medium term notes (the "10 Year Notes") with a coupon rate of 2.477 percent, maturing on November 30, 2030.

The net proceeds resulting from the Offering will be used to pay down existing indebtedness under AltaGas' credit facility, to fund the redemption of all of the issued and outstanding Cumulative Redeemable 5-Year Minimum Rate Reset Preferred Shares, Series I of AltaGas and for general corporate purposes.

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.

Falcon Oil & Gas Ltd. (FO:TSX) announced that it has filed its Interim Financial Statements for the three and nine months ended 30 September 2020 and the accompanying Management’s Discussion and Analysis.

Company reported a revenue of $1,000 from sales of oil and gas and a loss of $(426,000) during the third quarter in 2020. Net cash flow during that quarter was $(1,387,000).

Falcon Oil & Gas Ltd is an international oil & gas company based in Dublin Ireland. Company is engaged in the exploration and development of unconventional oil and gas assets, with the current portfolio focused in Australia, South Africa and Hungary. Falcon Oil & Gas Ltd has a market cap of $113 million and approximately 69 million shares outstanding.

New Zealand Energy Corp. (NZ:TSX) announced that it has filed with Canadian regulatory authorities its Q3 2020 consolidated financial results and management discussion and analysis report, which documents are available on the company's website and on SEDAR.

New West Energy Services is a Calgary based company engaged in waste management and environmental services to drilling and production sectors of oil and gas industry. Company has a market cap of $0.68 million and 44 million shares outstanding.

Obsidian Energy Ltd. (OBE:TSX) announced on November 30th an update to its 2020 capital spending plan due to the re-initiation of our Cardium development program. Obsidian Energy will increase its 2020 capital program by $3.2 million to commence drilling activity on the first pad within our Central Alberta Willesden Green asset.

Company has completed all the necessary commercial agreements to assume ownership of over 15 km of pipelines in the Bigoray area. These pipelines, in concert with $2 million of upgrades to an Obsidian Energy processing facility will restore 450 boe/d of high netback oil production which was taken off-line towards the end of the third quarter 2020 due to the permanent closure of a third party processing facility.

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.

PetroShale Inc. (PSH:TSX) announced on November 30th that pursuant to its Bonus Award Incentive Plan, an aggregate of 240,000 restricted awards and 960,000 performance awards were granted to Scott Pittman, the newly appointed Chief Financial Officer of the company.

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.

Razor Energy Corp. (RZE:TSX) announced its third quarter 2020 financial and operating results. Company reported $5.6 million of funds flow in the third quarter of 2020 compared to $2.6 million of funds flow in the third quarter of 2019. It reported a sales revenue of $3.573 million and a loss of $($(1.8) million in the third quarter. Sales volumes in the third quarter of 2020 averaged 3,712 boe/d, down 15% from the sales volumes in the same period in 2019.

Razor is a Calgary based oil and gas development and production company focused on acquiring, and subsequently enhancing, producing oil and gas properties primarily in Alberta. Company has a market cap of $37 million and approximately 18 million shares outstanding.

More news on Oilpatch Review

 Quote of the day

Lyndon B. Johnson, “Making a speech on economics is a lot like pissing down your leg. It seems hot to you, but it never does to anyone else.”

Did you know?

The Irwing refinery in St. John, New Brunswick is Canada’s largest refinery. In peak production it produces 300,000 barrels per day of refined petroleum products. It makes high octane gasoline, low sulphur diesel, jet fuel, heating oil, motor gasoline, a variety of motor oils, asphalt, and propane. The Irwing refinery accounts from 40% of Canada’s petroleum exports.

 

 

prices compiled and updated on a regular basis by Canadian Insight

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Victoria

Vancouver

Calgary

Edmonton

Saskatoon

Regina

Brandon

Winnipeg

Hamilton

Ottawa

Toronto

Montreal

Halifax

Moncton

St. John’s

 

 

$ / liter

 

1.199

1.209

1.049

0.909

1.019

0.959

0.999

0.999

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0.989

0.999

1.049

0.989

0.989

1.089

 

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     WCS  / WTI

 Price Spread -$11.10

  December 1, 2020

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