Top Oil Sands Pick: Canadian Natural Resources
Turtle Street Capital
Turtle Street Capital
Aug. 13, 2015, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Aug. 12, 2015, 12:27 PM
- Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
- The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
- At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
- The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
- Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
Aug. 6, 2015, 2:44 PM
- Canadian Natural Resources (CNQ +1.8%) is higher after reporting better than expected Q2 earnings, although the $0.16 EPS was far below the $1.04 posted in the year-ago quarter.
- CNQ blamed its unadjusted $405M Q2 loss on taking a $579M deferred income tax charge to account for Alberta’s decision to hike provincial corporate income tax rate to 12% from 10% effective July 1; the charge "effectively translates into lower future cash flows and therefore, lowers reinvestment in the business,” CFO Corey Bieber said.
- Overall Q2 production fell 1.5% Y/Y to ~805K boe/day; drilling activity included 13 net wells, down 93% Y/Y due to lower crude oil and natural gas prices.
- CNQ says it Q2 crude oil and natural gas liquids production fell to an average of 509K bbl/day from ~545K a year ago, partly because of wildfires in Alberta that temporarily slowed output; for the full year, CNQ maintains its crude and NGL production forecast at 562K-602K bbl/day.
- CNQ again cut its capital spending program, this time by C$245M to bring it to C$5.5B this year after announcing spending cuts three times earlier this year.
- Cash flow at the end of Q2 was $1.5B, down from $2.87B a year earlier.
Aug. 6, 2015, 5:50 AM
- Canadian Natural Resources (NYSE:CNQ): Q2 EPS of C$0.16 beats by C$0.08.
- Revenue of C$3.42B (-36.3% Y/Y) beats by C$70M.
Aug. 6, 2015, 5:40 AM
- Canadian Natural Resources (NYSE:CNQ) declares C$0.23/share quarterly dividend, in line with previous.
- Forward yield 2.85%
- Payable Oct. 1; for shareholders of record Sept. 11; ex-div Sept. 9.
Aug. 5, 2015, 5:30 PM
- AAON, ACTA, AGIO, AGN, AGO, AINV, AMCX, APA, AXAS, AYR, BBEP, BBW, BCE, BDBD, BDX, BECN, CC, CCC, CCOI, CECE, CNK, CNQ, CNSL, CRIS, CRZO, CTB, DDD, DUK, DX, EAT, EBS, EMES, ENOC, ENR, EXK, EXTR, FSV, FSYS, GCAP, GLOG, GLP, GNRC, GOGO, GTXI, GWPH, HCLP, HGG, HII, HILL, HL, HSNI, INFI, INSY, IRC, KOP, KORS, LAMR, LEAF, LPI, LQDT, MBLY, MEG, MFC, MITL, MMP, MMS, MPEL, MYL, NGS, NRF, NRP, NRZ, NVO, NXST, NXTM, NYT, OA, OGE, ONE, OTIV, OWW, PBH, PGNX, PLUG, PRIM, RDEN, RGEN, RICE, RSTI, RVLT, RWLK, SATS, SBH, SEAS, SFY, SGM, SNH, SPH, SRPT, SSTK, STN, SUNE, TA, TAP, TDC, TECH, TESO, THS, TK, TLP, TNK, VER, VIAB, WIN, WPP, YORW, ZEUS
Jul. 28, 2015, 1:12 PM
- Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
- A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
- The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
- Related tickers: TRP, ENB, SU, IMO, CNQ, CVE, TCK, OTCPK:HUSKF, OTCQX:COSWF
Jul. 13, 2015, 5:38 PM
- Weakness in oil stocks should not be used as a buying opportunity, Barclays analysts say, viewing shares as significantly overvalued and appearing to discount an average oil price of $85-$90/bbl based on group average historical multiples.
- The firm removes Newfield Exploration (NYSE:NFX) and Cabot Oil & Gas (NYSE:COG) from its list of top oil and gas stocks, leaving only Canadian Natural Resource (NYSE:CNQ), EOG Resources (NYSE:EOG), Southwestern Energy (NYSE:SWN), Noble Energy (NYSE:NBL) and Concho Resources (NYSE:CXO).
- Barclays' bottom group consists of five Underweight rated stocks - CHK, OTCQX:COSWF, PXD, OXY and UPL - while WPX Energy (NYSE:WPX) is bumped off the bottom list to reflect an improved outlook as well as a 20%-plus share price decline.
Jun. 26, 2015, 4:58 PM
- Alberta's government names the top executive of a province-owned bank, ATB Financial CEO Dave Mowat, to head a panel to review oil and natural gas royalty payments and issue recommendations by year’s end.
- The announcement to move ahead with the royalty review, even as oil-rich Alberta struggles with sharply lower crude prices, comes a day after the province said it would double a carbon tax levied on large-scale emitters of greenhouse gases over the next two years.
- Alberta is home of the Canadian subsidiaries of energy giants Exxon Mobil (XOM, IMO), Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT), among others.
- Among other top Alberta oil producers: SU, OTCPK:HUSKF, CVE, CNQ, ECA, TLM, OTCQX:COSWF, CPG, OTCPK:PEGFF
Jun. 25, 2015, 1:04 PM
- Alberta's new government says it will raise the province's existing carbon tax on industrial emitters starting next year, the first step in revamping regulations to curb rising greenhouse gas output from surging oil sands production.
- The price will rise to C$20/metric ton in 2016 from C$15 now, and increase to C$30 in 2017, when the rules will expire, the environment ministry says; large emitters will be required to reduce emissions by 15% next year and 20% in 2017, compared with a 12% reduction this year.
- Alberta’s oil sands have become a target for environmentalists because of their significant carbon footprint, and the new NDP government had campaigned on a promise to toughen the province’s environmental standards.
- Among Alberta's top oil producers: SU, IMO, XOM, OTCPK:HUSKF, CVE, CNQ, ECA, TLM, OTCQX:COSWF, CPG, OTCPK:PEGFF
Jun. 18, 2015, 10:18 AM
- Concerned that pledges by the newly elected left-leaning government in Alberta may stifle spending by energy companies and kill jobs, Canadian Natural Resources (CNQ +0.5%) President Steve Laut says his company is considering shifting investment away from the province.
- While ~73% of CNQ's assets are in Alberta, Canada's largest heavy oil producer could devote more spending to operations in Africa, the North Sea, Saskatchewan and British Columbia, Laut says.
- Earlier this week, new Premier Rachel Notley said the government will push ahead with a tax increase for corporations to 12% from the current 10%, policies critics say will prove hostile to the province's dominant oil and gas sector and accelerate its downward spiral.
- Laut also expresses measured support for a carbon pricing system in Alberta, but only if the program is used to fund new technology to reduce greenhouse gases, in a somewhat different take than the broad support recently offered by Suncor (SU -0.2%) CEO Steve Williams.
Jun. 17, 2015, 2:21 PM
- Canadian Natural Resources (CNQ -0.4%) says its Q2 production will be reduced by ~7,500 bbl/day as a result of wildfires in Alberta that shut in output at its Primrose and Kirby South projects.
- Meanwhile, CNQ's 125K bbl/day Horizon oil sands project resumed synthetic crude output on Monday after maintenance work was completed after a five-day extension.
- Also, CNQ President Steve Laut says he expects Alberta's royalty, regulatory and environmental burdens will be "reasonable," since Alberta needs to remain competitive with other Canadian provinces.
Jun. 12, 2015, 8:32 AM
- Canadian Natural Resources (NYSE:CNQ) says full production has resumed at its 80K bbl/day Primrose and its 25K bbl/day Kirby South projects in Alberta nearly three weeks after a nearby forest fire forced evacuations.
- CNQ has not provided a cost estimate for lost production.
- Earlier: Cenovus resumes operations at Foster Creek oil sands project
Jun. 9, 2015, 8:22 AM
- Canadian Natural Resources (NYSE:CNQ) and Cenovus Energy (NYSE:CVE) have resumed production at sites shut by a two-week-old wildfire in northern Alberta.
- CNQ says it expects to resume full production later this week at its 80K bbl/day Primrose site and its 30K bbl/day Kirby South site; the Primrose site had been evacuated and shut down, while Kirby South was forced to cut output because of the temporary closure of a pipeline.
- CVE says it began increasing output at its 135K bbl/day Foster Creek location over the weekend, but has not said when output would return to normal.
- The fires had shut down ~10% of Canada’s oil sands output, or ~233K bbl/day.
Jun. 4, 2015, 5:58 PM
- Cenovus Energy's (NYSE:CVE) 135K bbl/day Foster Creek oil sands project and Canadian Natural Resources' (NYSE:CNQ) 80K bbl/day Primrose site now have been shut for a week after workers were evacuated when a wildfire threatened the two sites.
- But while the fire remains a threat, officials have allowed both companies to return some staff to their sites to prepare for normal operations.
- CNQ has resumed some production at its Kirby South project after a third-party pipeline shutdown, and the site began ramping up yesterday.
- Though the two companies had combined production losses of more than 1M barrels of oil, neither has issued a warning that the project shutdowns will impact their Q2 earnings or revised production estimates.
Jun. 1, 2015, 5:33 PM
- Firefighters report some progress fighting wildfires in Alberta's oil producing region but a number of oil sands projects remain shut down, keeping ~10% of total oil sands production offline.
- The number of fires has dropped to 35 from 42 on Friday, with five considered out of control.
- The wildfire hazard in the Lac la Biche region, where Cenovus Energy (NYSE:CVE) and Canadian Natural Resources (NYSE:CNQ) evacuated their respective Foster Creek and Primrose projects more than a week ago, was downgraded today to “moderate” from “extreme” by Alberta's government.
- CVE also evacuated workers from its non-producing Narrows Lake site last week due to a different fire, and says that blaze is now under control.
- Statoil (NYSE:STO) had evacuated non-essential staff from its Leismer oil sands project with no impact to production, and now says it hopes to remobilize evacuated workers this week.
- A wildfire burning near MEG Energy’s (OTCPK:MEGEF) Christina Lake site also remains out of control.
Canadian Natural Resources Ltd. is a senior independent crude oil and natural gas exploration, development and production company. The company's exploration and production operations are focused in North America, largely in Western Canada; the United Kingdom portion of the North Sea; and Côte... More
Sector: Basic Materials
Industry: Independent Oil & Gas
Other News & PR