Yesterday, 7:55 AM
- The oil sands-related cutbacks in Alberta announced (I, II) by Canadian Oil Sands (OTCQX:COSWF) and Cnooc's (NYSE:CEO) Nexen Energy could affect oil exports to the U.S. in the long run and already have raised prices in the short term, WSJ reports.
- Neither company offered specifics on production or how long the shutdowns would last, but prices for Canadian synthetic crude oil rallied in trading Monday amid concerns about a drop in shipments from Syncrude and Nexen.
- Light synthetic crude from the oil sands for September delivery jumped to a one-month high of $1/bbl below the West Texas benchmark, rallying from $4.50/bbl below WTI on Friday.
- The impact on Canada’s crude production and pricing will depend on the duration of the outages; “It all comes down to how long these facilities are down and out, “ says Kevin Birn, a director in charge of oil sands analysis at IHS Energy.
Mon, Aug. 31, 7:12 AM
- Canadian Oil Sands (OTCQX:COSWF) says it has halted crude oil production at the Syncrude oil sands project after a fire damaged equipment at its processing facility in northern Alberta on Saturday.
- COSWF says the main coker conversion units were not damaged and Syncrude continues to operate, but it has suspended synthetic crude oil production and is currently developing a recovery plan.
- The company does not estimate the volume or value of lost production, but Syncrude’s synthetic crude output averaged 207.7K bbl/day in Q2.
- COSWF holds a 37% stake in Syncrude, and six other companies own the rest, including lead operator Exxon Mobil (NYSE:XOM) unit Imperial Oil (NYSEMKT:IMO), Suncor Energy (NYSE:SU), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO) subsidiary Nexen.
Fri, Aug. 28, 2:28 PM
- Alberta's new government launches its royalty review panel, and says it will not raise oil and gas royalty rates until the end of 2016.
- The specter of a higher government take is spooking the industry, especially with oil prices recently hitting more than six-year lows; some have argued the royalty review should be deferred until the outlook improves, while others would prefer to just get it over with.
- Related tickers: SU, ENB, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
Tue, Aug. 25, 8:44 AM
- Canadian Oil Sands (OTCQX:COSWF) is downgraded to Baa3, one notch above speculative grade, at Moody's, which cites the recent tumble in crude prices to more than six-year lows and the company's deteriorating balance sheet.
- Moody’s says it expects negative free cash flow of ~C$125M (US$94M) from June 30, 2015, to Sept. 30, 2016, to be largely debt funded, and says the rating could be reduced to junk grade if the company's debt-to-earnings ratio fails to improve, which is likely if WTI prices remain below $60/bbl.
Thu, Aug. 13, 5:58 PM
- The median North American independent producer can survive at a ~$42/boe price, according to a new analysis by Moody’s that found that many producers can handle low commodity prices thanks to significant cost savings and continued production growth.
- EQT Corp. (NYSE:EQT) had the lowest costs at $13.07/boe, and Penn Virginia (NYSE:PVA) had the highest full-cycle costs at $135/boe, according to the study.
- E&Ps paid an average $13.68 to bring one barrel of oil equivalent to the surface, Moody's says, with production costs higher among companies that mainly produced oil while gas companies drilled for less; EQT had the lowest production costs and Canadian Oil Sands (OTCQX:COSWF) had the highest.
- The largest expense among producers is finding and acquiring new oil and gas, but Moody’s cautions that its numbers here are not definitive, since the study only examined a single year of expenses and companies usually spend money and book reserves over a years-long period.
Thu, Aug. 13, 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
Wed, Aug. 12, 10:15 AM
- Syncrude is facing an environmental protection order following the deaths of 30 great blue herons at an abandoned sump pond at its Mildred Lake mine site near Fort McMurray, Alberta.
- Although bird deterrents were working elsewhere on the mine site, Syncrude says no such equipment was in operation at the sump.
- Syncrude was fined $3M in 2008 when more than 1,600 ducks died after they landed on a company tailings pond.
- Canadian Oil Sands (OTCQX:COSWF) owns 37% of Syncrude, with stakes also held by lead operator Imperial Oil (NYSEMKT:IMO), Suncor (NYSE:SU), Murphy Oil (NYSE:MUR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO).
Thu, Jul. 30, 7:37 PM
- Canadian Oil Sands (OTCQX:COSWF) reports a Q2 net loss and says it has trimmed its budget and narrowed its production expectations.
- The largest owner of the Syncrude oil sands project in Alberta says it lost C$128M, or C$0.26/share, in the quarter, citing lagging crude oil prices and Alberta’s recent increase in corporate taxes; a year ago, it posted a net profit of C$176M, or C$0.36/share.
- COSWF's Q2 production of 207.7K bbl/day was little changed from 202.5K bbl/day a year ago, but the realized selling price for its synthetic crude oil fell by more than a third Y/Y to C$74.47/bbl.
- COSWF now forecasts Syncrude will produce 96M-107M barrels in 2015, vs. its previous outlook for 95M-110M barrels; it again cuts its 2015 capex budget, to C$422M from C$429M previously and C$564M originally.
- Cash flow from operations shrank 71% Y/Y to C$70M.
Tue, Jul. 28, 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
Mon, Jul. 13, 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.
Tue, Jul. 7, 6:25 PM
- Low crude oil prices present an opportunity to drive down oil sands costs even further, adding to the 25% savings YTD, some of Canada's largest producers said today at a TD Bank conference in Calgary.
- Cenovus Energy (NYSE:CVE) executive VP of oil sands Harbir Chhina believes his company can cut costs by another 30%, adding that “the key thing that’s going to happen now, with this downturn, is really the cost structure in the oil sands is going to come down."
- It is a sentiment echoed by Canadian Oil Sands (OTCQX:COSWF) CEO Ryan Kubik, who expects 2015 operating costs of C$39.48/bbl vs. C$45.69 at the start of the year.
- Encana (NYSE:ECA) VP of strategy Corey Code said the oil price slide has provided the opportunity to cut costs not just in oil sands but across its shale oil holdings in Alberta and Texas.
- In addition to reducing operating costs, MEG Energy's (OTCPK:MEGEF) John Rogers said the company would grow its production solely by expanding existing oil sands plants for the foreseeable future.
Fri, Jun. 26, 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
Thu, Jun. 25, 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
Fri, May 15, 2:45 PM
- Canada says it is committing to cut greenhouse gas emissions by 30% below 2005 levels by 2030, partly by introducing new regulations on its oil and gas sector.
- Environment Minister Aglukkaq says Canada will cut its emissions to 515 metric megatons by 2030 from 726 metric megatons in 2013; earlier this week, Ontario - Canada’s most populous province - set its own 2030 target of 112 megatons, which would represent a 46% cut from 2005 levels.
- To meet the new target, Canada will develop regulations to cut methane emissions from the oil and gas sector, such as industrial leaks and gas flares, as well as new rules to control emissions from the electricity and chemical sectors, including from nitrogen fertilizers.
- Relevant tickers: SU, ENB, TRP, IMO, CNQ, CVE, TCK, TAC, OTCQB:HUSKF, OTCQX:COSWF
Thu, May 7, 6:25 PM
- Canadian oil producers plunged for a second straight day as "all bets are off" after election results in Alberta raised concerns over the possibility of higher taxes for the companies.
- Among today's losers: SU -2.6%, OTCQB:HUSKF -5.2%, GTE -5.8%, PWE -5.7%, IMO -1%, CVE -1%, OTCQX:COSWF -3.4%, OTCPK:MEGEF -5%.
- COSWF is among the most exposed to a potential hike in royalties and stricter environmental policies, while electricity supplier TransAlta (NYSE:TAC) would suffer from the new government’s vow to shut coal plants sooner than planned, according to analysts at BMO Nesbitt Burns and RBC Dominion.
- Advice is split on owning stocks of companies that transport and process fuels in Alberta; Raymond James says stocks such as TransCanada (NYSE:TRP) and Enbridge (NYSE:ENB) are less directly exposed to reduced investment in the sector, but RBC advises to sell pipeline and midstream companies with operations in Alberta.
- Analysts also are divided about how much producers with oil refineries, such as SU and IMO, could offset losses from potentially higher royalties by boosting processing of crude in Alberta, a move pro-labor NDP has pledged to support.
Wed, May 6, 2:36 PM
- Canadian energy stocks are broadly lower after the shocking election result in Alberta raised questions about the future of the country's oil industry: SU -3.3%, ENB -2.8%, TRP -2.6%, IMO -2.3%, CNQ -2.3%, CVE -5.8%, OTCQB:HUSKF -1%, TCK -1.6%, TAC -4.1%, OTCQX:COSWF -6%.
- "Energy is such a critical issue to Alberta, I’m really not that concerned," ENB CEO Al Monaco says, but investors and analysts disagree.
- "It’s completely devastating" for energy companies and investors, saysCanoe Financial's Rafi Tahmazian of stated plans by the newly elected government to raise corporate taxes, review the government’s take of energy revenue, scale back advocacy for pipelines and phase out coal power more quickly.
- “If you are invested in energy stocks, you should be concerned,” says AltaCorp’s Jeremy McCrea, noting that drillers already face higher costs to extract oil and gas in Alberta than in many jurisdictions, so an increase in royalties would make the province even less competitive.
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