Apr. 7, 2014, 10:58 AM
- Stifel analysts raise price targets on their favorite exploration and production stocks, saying all the ingredients are in place for crude oil prices to stay elevated.
- Anadarko's (APC) target is lifted to $104 from $87 after underperforming the sector, but the Tronox environmental contamination suit went back decades and last week's settlement removes a huge overhang from the stock.
- Canadian Natural Resources (CNQ), considered one of the top Canadian oil stocks with the largest reserve base among its peers, is raised to $42 from $38.
- EOG Resources (EOG), which is reporting record oil and gas production and revolutionizing the U.S. energy position, is upped to $120 from $100.
- Also receiving price target raises: GPOR, NFX, PQ, SWN.
Apr. 4, 2014, 11:22 AM
- It's been nearly three years since the Obama administration started stalling and deferring its decision on the Keystone XL (TRP) pipeline, but the prevailing view is that the project will go ahead - and when it does, an approval could be "a light bulb moment" for investing in Canadian energy, says analyst Sonny Mottahed of Calgary-based Black Spruce Capital.
- The Keystone debacle has resulted in negative investor sentiment toward Canadian energy stocks, depressing their values relative to U.S. counterparts, Mottahed says; approval would remove much of the negative psychology, with investors saying Canada is in the game again.
- Many investors also feel that Keystone delays are constraining the development of Canada's energy sector, "so if that roadblock is removed, it would be a big positive," says Nomura's Charles St. Arnaud.
- The uncertainty has resulted in “an overhang on market access against Canadians” that has pushed capital to the U.S. energy industry, Canadian Natural Resources (CNQ) CFO Corey Bieber says.
Mar. 10, 2014, 5:34 PM
- Canadian Natural Resources (CNQ) remains haunted after nearly a year of unexplained leaks at its Primrose oil sands production site, as Alberta's energy regulator turned down its application to resume steaming operations in the affected area "in light of the ongoing investigation into the leaks at Primrose."
- The decision came on Friday, just a day after CNQ CEO Steve Laut told analysts the issue was “totally solvable” and that the company hoped to restart steaming in the impacted area in March or April.
- The mysterious subterranean leaks of oily water, which now total more than 7K barrels of crude, were first detected last May and led regulators to impose an indefinite ban on some steaming operations at Primrose.
Mar. 7, 2014, 10:57 AM
- Canadian Natural Resources (CNQ +0.8%) says it expects rising construction costs and delays at its Sturgeon refinery project in Alberta could double its equity commitment for the project to as much as C$680M.
- Sturgeon is designed to process 50K bbl/day of crude oil into refined products such as low-sulfur diesel and diluent used to dilute heavy oil for shipment.
- The cost overruns are a setback for Canada's second largest oil and gas company, which has prided itself on completing projects on time and within budget, and raises questions about the project's viability as other oil sands producers have abandoned similar upgrader plans.
Mar. 6, 2014, 11:28 AM
- Canadian Natural Resources (CNQ +1.2%) is trading higher after raising its dividend 12.5% and posting a 50% improvement in adjusted Q4 earnings as production edged higher.
- The dividend hike was the second in three months, and now is 80% higher than a year ago.
- Despite the strong growth, Q4 results were no better than mixed compared with analyst estimates, and cash flow per share was $1.64, $0.10 below expectations.
- Q4 crude oil at natural gas liquids production volumes rose 2% Y/Y as a result of steady production at Horizon, production growth at Pelican Lake and increased NGL output; natural gas production rose 5% Y/Y due to the Montney drilling program at Septimus.
- Total FY 2013 production more than 671K boe, up 3% Y/Y.
Mar. 6, 2014, 6:53 AM
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Mar. 5, 2014, 5:30 PM
Feb. 24, 2014, 5:48 PM
- Encana (ECA) is working with Royal Bank of Canada to find a buyer for its Bighorn properties in Alberta, Bloomberg reports.
- Bighorn may attract bids of C$2B-C$2.5B if offers are in line with the ~C$30K per flowing barrel that Canadian Natural Resources (CNQ) agreed to spend on Devon Energy’s (DVN) conventional assets in Canada last week, Cormark analyst Todd Kepler says, adding that Exxon Mobil (XOM) may be “a natural” buyer after its purchase of Celtic Exploration last year.
- The properties up for sale are said to produce ~61.5K boe/day, of which 79% is gas.
Feb. 19, 2014, 6:58 AM
- Devon Energy (DVN) has agreed to sell some of its liquids-rich natural-gas assets in Canada and six natural-gas plants for $3.13B to Canadian Natural Resources (CNQ).
- Before royalties, the properties produced the equivalent of 383M cubic feet of natural gas per day, 10,800 bpd of light crude oil and 12,000 bpd of natural gas liquids.
- The transaction doesn't include Devon's Horn River interests in northern British Columbia and heavy oil assets in Alberta.
- The deal comes after Devon said in November that it planned to sell all of its Canadian gas assets following years of low prices. (PR)
Feb. 18, 2014, 7:56 AM
- Total (TOT) says it expects to spend hundreds of millions of dollars on exploration drilling in South Africa this year.
- TOT, which has a 50% share in a permit to explore off the southern coast of South Africa with Canadian Natural Resources (CNQ), will begin drilling later in the year and is in talks with the South African government to acquire a second exploration permit.
- Other oil majors such as Shell and Exxon have rights to explore for gas off South Africa's coast; the country currently imports ~70% of its oil from the rest of Africa and the Middle East.
Jan. 14, 2014, 6:56 PM
- The weak Canadian dollar will provide extra cash flow to the country's energy sector but this is not being recognized by investors, particularly those outside Canada, Canaccord's Martin Roberge says in recommending Canadian Natural Resources (CNQ), MEG Energy (MEGEF) and Suncor (SU) as Canadian names benefiting most by heavy oil differentials.
- "A weaker C$ should also help spreads to narrow but more importantly allow Canadian producers to enjoy huge currency translation gains," Roberge says.
- The shale growth allure of U.S. E&Ps has blinded investors, but with the loonie breaking down below key resistance levels, the strategist sees a catalyst for going long the three Canadian names and shorting ConocoPhillips (COP), Anadarko (APC) and EOG.
Jan. 13, 2014, 3:38 PM
- The leak at Canadian Natural Resources' (CNQ -0.5%) Primrose field in the Alberta oil sands continues to seep bitumen crude at "a low rate" six months after it started, CNQ CEO Steve Laut says while expecting to halt the leak soon.
- The Primrose field was hit by a second incident at the start of this year, when 27K liters of bitumen were accidentally released underground; that release has since been stopped, but ~1M liters of bitumen have leaked since July 2013.
- Also, Laut says he expects CNQ to increase production by ~9% in 2014 to 711K-757K boe/day; ~75% of the company's production is oil.
Jan. 10, 2014, 7:49 AM
- Canadian Natural Resources (CNQ) says the release of ~170 barrels of oil underground last week at a troubled production site in Alberta was a routine well failure and questions the chief regulator's decision to issue an incident report on it.
- "There's no spill," CNQ says. "Casing failures do happen, and they're generally not reported as spills," but the Alberta Energy Regulator says there's no error in reporting the incident and an investigation is under way.
- The Primrose site has suffered a series of unexplained subterranean leaks of thousands of barrels of oil dating back to May; unlike with this latest seepage at an active well, the earlier leaks involved abandoned well bores.
Jan. 9, 2014, 4:31 PM
- KKR says it will open its first Canadian office next month in Calgary, the capital of Canada's oil patch, as it seeks to tap into growing demand for private-equity financing in the region and expand its presence in the global energy industry.
- KKR Director Brandon Freiman, who will relocate from the NYC headquarters to start up the new office, is eyeing investment of $500M to "several billion dollars" over the next five years in upstream oil and gas production, midstream pipelines and related infrastructure as well as energy services businesses.
- The planned investments will include providing financing instead of outright takeovers, KKR says.
- Canadian energy names on the radar: SU, IMO, BTE, SOQ, ERF, CVE, COSWF, AAV, BXE, CNQ.
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