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
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, 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
Thu, Jul. 30, 3:21 PM
- Cenovus Energy (CVE +1.2%) is higher after cutting its quarterly dividend by 40% and accelerating its cost-cutting efforts while adopting a “more moderate approach” to expanding its oil sands assets.
- Q2 earnings fell to $0.18/share but easily topped analyst estimates, and cash flow dropped 60% Y/Y to $477M.
- CVE says it will cut another ~300 jobs on top of a reduction of 800 jobs announced in February, and raises its cost-cutting target for the year by 40% to $280M.
- CVE says Q2 oil sands output rose 5% to 130.7K bbl/day on a 30% Q/Q improvement in costs, but the production growth was more than offset by lower oil prices.
- CVE keeps its 2015 capital spending plan at C$1.8B-C$2B, but due to its expectations for ongoing low oil prices, it no longer plans to pursue multiple major oil sands construction projects at the same time.
- The company has two producing projects in the oil sands - Christina Lake and Foster Creek - both of which are 50% owned by ConocoPhillips; it plans to take advantage of the slower pace of development to find “the most economic way” to develop a third oil sands project, Narrows Lake.
Thu, Jul. 30, 6:14 AM
Wed, Jul. 29, 5:30 PM
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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
Fri, Jul. 24, 2:22 PM
- Total (TOT -2%) is aiming to sell a 50% stake in its sole U.S. refinery in Port Arthur, Tex., and has retained investment bank Lazard to advise on the deal, Reuters reports.
- TOT reportedly intends to remain operator of the 225K bbl/day plant, which it has owned for more than 40 years.
- Potential bidders could include companies from Canada's oil sands patch such as Cenovus Energy (CVE -1.4%), which are shipping growing volumes of heavy crude to the U.S. Gulf, according to the report.
Wed, Jul. 22, 2:56 PM
- In contrast to his upbeat analysis (I, II) of Exxon Mobil (XOM +1.2%), Goldman's Neil Mehta thinks investors should sell Chevron (CVX -0.2%) and Cenovus Energy (CVE -2.2%) on concerns about dividend sustainability.
- Believing too many investors are focusing on absolute yield when an ability to post dividend growth is more important long term, the analyst ranks CVX a Sell given low dividend growth, weak free cash flow and E&P volume risk, while CVE is a Sell because of limited dividend growth, lower returns and a premium valuation.
- XOM and Suncor Energy (SU -0.4%), on the other hand, "are set to deliver the highest dividend growth through the end of the decade - and now offer solid valuation upside from current levels."
Tue, Jul. 7, 6:43 PM
- Barclays’ Paul Cheng predicts all 10 Americas-based oil majors - XOM, CVX, COP, HES, MUR, SU, CVE, IMO, OTCPK:HUSKF, PBR - will beat earnings forecasts, benefiting from strong downstream and chemical performances as well as better than expected production volumes and a lower operating cost environment.
- Cheng estimates the oil majors will exceed the current EPS consensus by a median of 30% while the refiners will beat by 9%.
- Cheng raises his full-year EPS forecast for CVX to $3.75 from $3.55 and for COP to $0.25 from $0.20, but lowers his forecast for XOM to $4 from $4.05.
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.
Tue, Jun. 30, 7:23 AM
- Cenovus Energy (NYSE:CVE) confirms it has agreed to sell its royalty lands business to Ontario Teachers' Pension Plan for ~C$3.3B ($2.66B).
- Heritage Royalty Limited Partnership owns ~4.8M acres in Alberta, Saskatchewan and Manitoba.
- CVE says its consolidated production will be reduced by 7,800 boe/day of third-party royalty interest volumes.
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, Jun. 19, 9:09 AM
- Cenovus Energy (NYSE:CVE) confirms it is in talks about the potential sale of its royalty interest and mineral fee title lands but provides no details of the other party’s identity or the estimated value of the deal.
- The announcement follows a report yesterday that CVE was holding exclusive talks with the Ontario Teachers Pension Plan about a deal that could be worth C$2.5B-C$3B.
- CVE says there is no assurance of a deal and has no plan to comment further on the discussions.
- Given the likely size of the proceeds, CVE would need to sell both third-party and company-owned lands in one large transaction, a CIBC analyst says.
Thu, Jun. 18, 5:10 PM
- Cenovus Energy (NYSE:CVE) surged to a 4% gain in today's trade, nearly all of it in the final half-hour, after Reuters reported the Canadian company is in advanced talks to sell its package of royalty lands to Ontario Teachers’ Pension Plan.
- The royalty lands, which generate revenue from drilling by other companies and are located across Alberta, Saskatchewan and Manitoba, are said to be worth C$2.5B-C$3B.
- The fund manager had said it was seeking energy assets as it looks to trim positions in oil and gas derivatives and invest instead directly in producing assets.
CVE vs. ETF Alternatives
Cenovus Energy Inc is an integrated oil company. The Company is in the business of developing, producing and marketing crude oil, NGLs and natural gas in Canada with refining operations in the United States.
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