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
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, 2:59 PM
- Suncor (SU +5.7%) CEO Steve Williams says prices for oil and gas asset have fallen enough to make acquisitions more attractive, but that his company is not actively pursuing any specific targets.
- Williams says SU is focused on developing its own assets and buying back shares, but that strategic acquisitions are a third option for making use of its growing cash reserves, especially as asking prices decline.
- SU's Q2 earnings fell to C$0.63 on lower oil prices, but the result was well above analyst expectations; the company cut another C$400M from its 2015 capital spending budget, and now plans to spend C$5.8B-$6.4B as it lowers its range from up to C$6.8B previously and an original target of up to C$7.8B.
- With a C$4.9B war chest, Williams says SU would consider boosting its 40.8% interest in the 180K bbl/day Fort Hills oil sands project in Alberta to assure its startup by 2017.
Wed, Jul. 29, 11:07 PM
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
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."
Wed, Jul. 15, 9:59 AM
- Suncor (SU -0.4%) says it is planning a pilot project that will use radio frequencies to produce heavy crude oil, which it says is the first such production test of the technology on subterranean oil sands deposits.
- "If successful and commercially viable, [it] has the potential to improve economic and environmental performance in the oil sands by eliminating the need for water” to produce oil, according to SU’s general manager of oil sands strategic technology.
- SU and its partners, Devon Energy (NYSE:DVN), Cnooc's (NYSE:CEO) Nexen Energy unit and Harris Corp. (NYSE:HRS), will begin small-scale test production at a pair of wells at SU’s Dover site in Alberta.
- SU tells WSJ the pilot project will cost ~C$44M, and if successful will lead to a full commercial scale field test.
Wed, Jul. 8, 8:25 AM
- TransAlta (NYSE:TAC) agrees to acquire Suncor Energy’s (NYSE:SU) interest in two wind farms in Canada, as part of a complicated deal to restructure the companies' power generating arrangement in Alberta’s oil sands.
- TAC will acquire the 20 MW Kent Breeze wind farm in Ontario and SU’s 51% stake in the 88 MW Wintering Hills plant in Alberta.
- SU will acquire two steam turbines with capacity of 132 MW, and full operational control of TAC’s Poplar Creek co-generation plant, along with the rights to use 244 MW of gas generation capacity.
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.
Mon, Jun. 29, 8:15 PM
- Cameron (NYSE:CAM) stands out as Barclays' Top Pick in the energy sector, as the firm highlights "resilient results expected from improved execution and manufacturing flexibility, while also being well positioned for the eventual recoveries in each of its end markets."
- Valero Energy (NYSE:VLO) remains Barclays' favorite name among refiners, due mostly to the new management’s emphasis on growing value for shareholders; Suncor (NYSE:SU) and Vermilion Energy (NYSE:VET) also rank among the firm's favorites.
- Among regulated utilities, NextEra Energy (NYSE:NEE) is one of the highest quality names, with 5%-7% targeted earnings growth generated from continued investment in its Florida Power & Light regulated entity.
- In precious metals, Royal Gold (NASDAQ:RGLD) is Top Pick; Barclays prefers gold royalty companies over gold producers as they have wider margins and limited exposure to rising operating and capital costs while their diversified portfolios limit political risk, and RGLD is the best of the group.
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
Thu, Jun. 18, 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.
Tue, Jun. 16, 2:49 PM
- Royal Dutch Shell (RDS.A, RDS.B) gains approval from Canada's environment ministry for an offshore drilling project in Nova Scotia, saying the exploration program was "not likely to cause significant adverse environmental effects.”
- The approval is contingent on meeting several conditions, including mitigating the potential impact on fish and marine habitats.
- Shell plans to drill up to seven exploration wells over a four-year period in an area in the Shelburne Basin ~250 km off the coast.
- Shell holds a 50% stake in the project, while joint venture partner ConocoPhillips (NYSE:COP) has a 30% share and Suncor Energy (NYSE:SU) owns 20%.
SU vs. ETF Alternatives
Suncor Energy Inc is an integrated energy company. Its operations include developing petroleum resource basin, Canada's Athabasca oil sands. It explores for, acquires, develops, produces & markets crude oil & natural gas in Canada and internationally.
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