Today, 12:11 AM
- Cenovus Energy (NYSE:CVE) has shut down operations at the 135K bbl/day Foster Creek oil sands project and Canadian Natural Resources (NYSE:CNQ) closed its 80K bbl/day Primrose project after a forest fire broke out on the Cold Lake Air Weapons Range in Alberta.
- CVE and ConocoPhillips (NYSE:COP) each own 50% of Foster Creek, with CVE's share of the production representing 31% of total company-wide average oil output of 218K bbl/day; Primrose's production represents less than 10% of CNQ's total corporate output.
- More than 7% of Canada's oil sands production has been shut down by the fire, which started Friday and is considered "out of control."
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, 12:47 PM
- Canadian Natural Resources (CNQ -0.6%) is lower after Q1 earnings beat expectations amid record production, but unadjusted earnings resulted in the company's first quarterly loss in more than four years.
- CNQ says Q1 output totaled a record 898K boe/day, up 31% Y/Y, with crude oil production rising 23% and natural gas production increasing 51%, but cash flow fell 36% to C$1.37B due to lower commodity prices.
- CNQ says Q1 operating costs to produce oil and natural gas liquids fell 22% Y/Y.
- CNQ also reduces its 2015 capital program by another C$300M, now targeting spending of ~C$5.7B after announcing spending cuts in January and March.
- Says options for its royalty lands and royalty revenue portfolio include a sale or spinoff.
Thu, May 7, 6:12 AM| Comment!
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Wed, May 6, 5:30 PM
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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.
Wed, May 6, 7:38 AM
- In a stunning election result, voters in Canada's energy-rich Alberta province swept aside the four-decade hold on power by the ruling Progressive Conservative Party and elected an New Democratic Party majority government that wants to raise corporate taxes and increase oil and gas royalties.
- NDP leader Rachel Notley - who has vowed to raise the corporate tax rate to 12% at a time energy companies are reeling from layoffs and project cancellations amid weaker oil prices - is expected to succeed Jim Prentice as Alberta’s premier.
- Notley has said she would not lobby for the proposed Keystone XL pipeline to link Alberta’s oil deposits to refineries in Texas, and that she is against the Northern Gateway pipeline from Alberta to the British Columbia coast.
- She also has promised another review of oil royalties at a time other oil producing areas around the world that are also struggling with low oil prices are expected to make their terms more appealing.
- Relevant tickers: ENB, SU, TRP, IMO, CNQ, CVE, OTCQB:HUSKF, OTCQX:COSWF, XOM, BP, RDS.A, RDS.B
Wed, Apr. 22, 6:53 PM
- Nomura came out bullish today on the energy E&P sector - issuing Buy ratings for MRO, PXD, EOG, CLR, APC, NFX, RRC, CNQ, CXO, ECA and SU - even as the firm does not foresee a V-shaped rebound in crude oil prices.
- Nomura believes core North American shale plays do not represent the economic marginal cost of supply in the world, which runs counter to commonly held views that largely see shale occupying the high end of the cost curve; thus as oil rebounds, so will investment in the shales, which should support prices, the firm says.
- In such an environment, Nomura says selecting stocks will depend on factors such as ”the reinvestment opportunity set, impact of oilfield technology, continued efficiencies, potential new geologic plays, management acumen and balance sheet strength."
- The firm is Neutral on DVN, HES, MUR, OAS, UPL, WLL, XEC, COG, COP and SWN; it rates NBL, APA, DNR, CHK and CVE as Reduce.
Tue, Mar. 24, 11:59 AM
- Canadian energy companies are trading at record valuations, signaling their shares have not yet caught up to the reality of lower crude oil prices, according to a Bloomberg analysis.
- Suncor Energy (NYSE:SU), Canadian Natural Resources (NYSE:CNQ) and other stocks in the S&P/TSX Energy Sector Index are priced at 65x expected earnings, an all-time high and more than double the average of U.S. peers.
- "The group, in general, is reflecting oil prices closer to US$60," says an analyst at Cormark Securities, adding that "the longer oil stays at these levels, there is downside risk.”
- SU, Canada’s largest oil producer, is changing hands at 58x projected earnings and Husky Energy (OTCQB:HUSKF) is at 85x, Bloomberg says.
Fri, Mar. 6, 5:57 PM
- Oil drillers expecting prices to rebound have come up with an alternative to storing their crude in tanks: They’re keeping it in the ground, as drillers who have spent millions boring holes through petroleum-rich shale are just waiting for prices to go up before actually turning on the spigot.
- The backlog of unfracked wells is one reason U.S. crude output is poised to climb even as companies have idled more than a third of the rigs that were drilling for oil in October; Continental Resources' (NYSE:CLR) Harold Hamm says ~85% of U.S. wells aren’t being completed right now.
- Examples: Anadarko Petroleum (NYSE:APC) says it expects to have as many as 440 uncompleted wells by year's end, EOG started the year with ~200 uncompleted wells and plans to let that inventory build through H1, and Canadian Natural Resources (NYSE:CNQ) says it has 161 uncompleted wells.
- Initial production from a new well typically is 750-1,000 bbl/day, meaning the "fracklog" could represent as much as 3M bbl/day of new output, at least at the outset - a major reason an oil price recovery will prove to be an extended process, analysts say.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
- Earlier: Oil glut's latest dilemma: where to store it all
Thu, Mar. 5, 2:38 PM
- Canadian Natural Resources (CNQ +4.7%) confirms that it plans to spin off or sell its royalty land business this year once energy prices have stabilized.
- “We target this monetization in 2015,” CNQ President Steve Laut said on today's earnings conference call without specifying how the company would do so; CNQ has publicly discussed "monetizing" the business over the past year after Encana raised more than $4B in an IPO and secondary offering of its royalty business, spun out as PrairieSky Royalty.
- Shares have been strong all day following better than expected Q4 earnings as more oil was pumped to counter the effect of plunging prices, and CNQ's move to raise its dividend even as other oil producers have cut or eliminated dividends.
Thu, Mar. 5, 9:13 AM
- Canadian Natural Resources (NYSE:CNQ) +1.9% premarket after reporting Q4 earnings that almost tripled from a year ago and raising its dividend while other oil producers have cut or eliminated dividends.
- Q4 production rose 27% Y/Y to nearly 861K boe/day from 677K, while output for the full year gained nearly 18% to 790K boe/day; production got a boost from CNQ's purchase last year of Devon Energy's western Canadian natural gas and light oil assets.
- Targets 2015 production at 850K-897K boe/day, including crude oil and natural gas liquids production of 562K-602K bbl/day.
- CNQ is cutting another C$150M from its 2015 capital budget to C$6.04B, citing a reduction in the number of planned maintenance turnaround days scheduled at its Horizon oil sands operation; CNQ expects to bolster Horizon output by ~10K bbl/day by reducing the planned outage to six days from 35.
- CNQ says its management committee will see a 10% pay cut and the board will reduce its annual cash retainer by 10%.
Thu, Mar. 5, 8:56 AM| 2 Comments
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