Vermilion's Westbrick deal worth $745 million strengthens Canada’s Deep Basin position
Vermilion Energy, a Canadian company, announced on Monday that it would acquire Westbrick Energy, a privately-held oil and gas company. The deal will be for C$1.075 Billion ($746.53 M), mostly in cash. This acquisition will strengthen Vermilion Energy's position in Alberta's Deep Basin. In premarket trading, U.S. listed shares rose 1.8% to $9.03 per share. This acquisition will likely add 50,000 barrels per day of equivalent oil, consisting 75% of gas and 25% of liquid, to the existing production. Vermilion, based in Calgary, Alberta, said that it represented a 5% growth year-over-year and was forecast to generate over C$110,000,000 of free cash flow annually.
Cenovus Energy predicts increased production by 2025 for new projects
Cenovus Energy, a Canadian energy company, forecasted higher oil and natural gas production in 2025. It expects to benefit from the new projects that will be coming online. According to LSEG, the company expects upstream production of between 805,000 and 845,000 boepd by 2025. The midpoint is higher than analyst estimates of 820140 boepd. The company anticipates between 770,000 and 810,000 boepd this year. The U.S. Energy Information Administration has predicted that power consumption in the U.S. will increase in 2025, with data centers, manufacturing and other operations driving the demand. This could help gas producers like Cenovus.
Alberta, Canada's oil province, will clean up 5% of its inactive wells by 2023
A regulatory report on Thursday said that the number of inactive gas and oil wells in Alberta, Canada’s largest fossil fuel producing province, dropped 5% from 2022 to 2023, indicating progress in reclamation and decommissioning work. Alberta has 79,000 inactive wells compared to 83,000 in 2012. Inactive wells are no longer producing oil or gas, and must be permanently plugged. The land surrounding them should also be restored. Canada is the fourth largest oil producer in the world and the sixth largest gas producer. Its western provinces have hundreds of thousands active and non-active wells. Some of these wells are orphans.
Canada Environment Minister warns oil companies against retaining emissions data
Canada's Environment Minister warned Wednesday that oil companies who withheld data on emissions would be violating federal law. This was after Alberta's Premier said the province had considered measures to stop a proposed cap. Danielle Smith, Premier of Alberta, said on Tuesday that her government will introduce a motion to the legislature to allow them to challenge Ottawa's proposed cap on oil and gas emissions. Alberta, Canada's largest oil and natural gas province, is also looking into other ways to undermine the cap should it become law. These include restricting access to oil and gas installations in Alberta as well as access to emission data.
Sunshine Oilsands operations halted by Canadian regulator
Sunshine Oilsands has been ordered by a Canadian regulator to suspend all operations in the oil sands area of northern Alberta, including its wells, pipelines and facilities, due to a continuous failure to comply with environmental and safety regulations. The Alberta Energy Regulator's (AER) order of Nov. 14, also required Sunshine Oilsands to post a C$6,091,318 (4.36 million dollars) security deposit in order to offset the estimated costs of abandoning or recovering a well or an facility. Tuesday, the company didn't immediately respond to an inquiry for comment.
Ovintiv extends Montney footprint by $2.38 billion
Ovintiv, a Canadian shale producer, announced on Thursday that it would acquire oil assets from Paramount Resources in exchange for cash of approximately $2.38 billion. This will strengthen its position in Canada’s highly productive Montney shale. About half of Canada's natural gas is produced in the shale formation that spans northern Alberta, British Columbia and British Columbia. The assets are near Ovintiv’s current operations. They would add 70,000 barrels per day of oil equivalent production to the Montney Formation in Alberta. Ovintiv said that it will also sell its Uinta Basin asset, located in Utah to FourPoint Resources, for $2 billion.
Industry says that the US dependence on Canadian oil should discourage Trump tariffs
Canada's oil industry doesn't expect tariffs to be included in the protectionist measures proposed by Donald Trump, U.S. president-elect. This is because U.S. refineries depend on Canadian barrels. Some Canadian oil industry players saw Trump's victory as a positive, which would encourage energy investment in North America. It could also boost the value of U.S. dollar that Canadian producers get for their crude. Some however, said that any increase in U.S. production of oil and gas could put Canadian exports into competition with other countries. Canada is the fourth largest oil producer in the world and the sixth largest natural gas producer.
Canada's renewable fuel projects are hit by a surge in US imports
Canadian renewable fuel producers will see lower returns from new facilities as a result of a slump in British Columbia’s low-carbon fuel standard (LCFS). This trend is expected to continue amid an influx of US exports. The weakness in British Columbia's LCFS Credit Market reflects the growing pains of the international biofuels sector, where many regulators are clamping down on imports in order to protect their nascent national markets from an oversupply. Low-carbon fuels cost more to produce than gasoline or diesel based on petroleum. LCFS programs bridge the gap between fuels with low emissions and those that have higher emissions. Canada is behind the U.S.
The Globe and Mail reports that Canada is proposing to support the carbon-capture projects of oil-sands companies.
The Globe and Mail reported that Canada Growth Fund, the federal funding agency of Canada, has proposed to fund a multi-billion dollar carbon-capture project by Pathways Alliance. The Alliance represents Canada's largest oil sands producers. According to a report published on Sunday, which cited sources familiar with this matter, the CGF's offer is likely to start further negotiations. However, the final agreement is still months away as the two sides are at odds on certain key terms. Carbon capture is the process by which the carbon dioxide produced from industrial activity can be stored underground. The report did not mention any financial details regarding the investment.
Canada regulator suspends Imperial's application to extend Norman Wells oil permits
The Canada Energy Regulator announced on Tuesday that Imperial Oil has put its application to extend life of the remote Norman Wells oil-and-gas facility in Canada's Northwest Territories on hold until a report on environmental assessment is completed. The Norman Wells site is located on nine islands, both natural and artificial in the Mackenzie River (Canada's longest river) and near the town of Norman Wells. Imperial, owned by Exxon Mobil Corp., requested last year that its Norman Wells Operating Permit, due to expire Dec. 31, 2024, be extended by an additional 10 years.
Canadian Natural Gas Companies eager to capitalize on the LNG boom flood the market with excess supply
Analysts said that a huge LNG Canada terminal, led by Shell, could struggle to raise Canadian natural-gas prices dramatically when it begins operating next year, because of a glut of supply waiting to be released. Storage was full, and the price of a million British thermal unit (mmBtu), which had been at a high for two years, dropped to 5 Canadian cents in late September. The slump hurts producers who increased drilling activity in anticipation of LNG Canada's new demand and has prompted some firms curtail their production. Analysts and executives at the companies estimate that between 800 million to 1 billion cubic feet per day (bcf/d) of gas has been shut down…
Chevron sells assets worth $6.5 billion to Canadian Natural Resources
Chevron announced on Monday that it would sell its assets in the Athabasca Oilsands and Duvernay Shale fields to Canadian Natural Resources at a price of $6.5 billion. This is part of its divestment plan. The cash-only transaction is part of the company's strategy to sell assets worth $10 to $15 billion by 2028. Chevron will be able to produce 84,000 barrels equivalent per day (boepd), based on the assets located in Alberta Canada. Wood Mackenzie reported in January that the Duvernay was one of Canada's most important shale plays, with eight deals totaling $2.9 billion over the past three years. Shell will hold the remaining 10%.
Alberta regulator fines Imperial Oil over tailings leak
Alberta Energy Regulator announced on Thursday that it had imposed a C$50,000 administrative penalty ($36,764.71) against Imperial Oil for a toxic tailings spill at Kearl Oil Sands Mine. The leak lasted months. The AER also requested that the Canadian energy company submit two reports in order to increase awareness of the leaks. One report will focus on monitoring and mitigating seepage, and the second on the possible impacts of the release industrial wastewater. Exxon Mobil, which owns the Kearl Mine of Imperial, has been leaking toxic tailings for several months. It was only discovered when the company reported another leak in February 2018.
OPEC+ Outlines Record Oil Production Cut; Mexico Balks
OPEC, Russia and other allies outlined plans on Thursday to cut their oil output by more than a fifth and said they expected the United States and other producers to join in their effort to prop up prices hammered by the coronavirus crisis.But the group, known as OPEC+, said a final agreement was dependent on Mexico signing up to the pact after it balked at the production cuts it was asked to make. Discussions among top global energy ministers will resume on Friday.The planned output curbs by OPEC+ amount to 10 million barrels per day (bpd) or 10% of global supplies…
OPEC+ Debates Biggest Ever Oil Output Cut as Virus Destroys Demand
OPEC and allies are working on a deal for an unprecedented production cut equivalent to around 10% of global supply, an OPEC source said after U.S. President Donald Trump called on oil nations to stop the oil rout caused by the coronavirus pandemic. The meeting of OPEC and allies such as Russia has been scheduled for Monday, April 6, Azeri's energy ministry said, but details were still thin on the exact distribution of production cuts. Oil prices have fallen to around $20 per barrel from $65 at the start of the year as more than 3 billion people went into lockdown because of the virus, reducing global oil demand by as much as a third or 30 million barrels per day.
Update: Brent Oil Rises above $32 on Hopes of Output Deal
Benchmark Brent crude oil futures rose as high as $33.05 a barrel on Friday on rising hopes of a new global deal to cut global crude supply.Brent crude futures were up 9.3%, or $2.79, at $32.73 a barrel by 1014 GMT. Brent soared as much as 47% on Thursday for its highest intraday percentage gain on record. It closed 21% up, still about half the $66 at which it was trading at the end of 2019.U.S. West Texas Intermediate (WTI) crude also moved back into positive territory, rising 4.8%, or $1.22, to $26.54 a barrel after advancing by 24.7% on Thursday.U.S.
Upstream Sector Leads O&A M&A in 2019
A latest research revealed that the upstream sector accounted for the bulk of mergers and acquisitions (M&A) in the global oil and gas industry in 2019, generating some high-value transactions during the process.According to GlobalData's theme report, ‘M&A in Oil and Gas – 2020’, the acquisition of Anadarko Petroleum by Occidental Petroleum in April 2019 for a purchase consideration of US$57bn was the highlight of oil and gas M&A activity last year, says GlobalData, a leading data and analytics company.Ravindra Puranik, Oil & Gas Analyst at GlobalData…
Canadian Energy Sector to Boost Spending
Capital spending by Canada's oil and gas industry will rise by 6%, or C$1.9 billion, in 2020 from the previous year, halting a six-year decline due to improving economics, the Canadian Association of Petroleum Producers (CAPP) forecast on Thursday.CAPP said a corporate tax cut by Alberta's provincial government last year and its easing of oil production limits will lead to higher spending.Congested pipelines created a glut of oil in storage in the Western Canadian province in recent years, depressing prices and causing its government to curtail…
Cenovus Energy Sets Out to Slash Emissions
Canada's Cenovus Energy on Thursday unveiled plans to reduce per-barrel greenhouse gas emissions by 30% by the end of 2030, as the country's oil industry faces growing pressure from environmental activists.The Alberta-based integrated oil and gas company said it will spend an additional C$1.5 billion on businesses run by the country's indigenous communities.Opposition from environmental and indigenous groups have stalled new pipeline projects in Canada and the United States that are needed to move Canadian crude to refineries. Investors in the region have also become more vocal about environmental…
Keystone Pipeline Still Closed, ND Leak Source Unclear
The precise source of a leak on TC Energy Corp's Keystone oil pipeline in North Dakota has not yet been identified, a spokesman for the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) said on Monday.There is no estimated timeline for restart of the pipeline and the company is continuing excavation work to isolate the affected part of the pipeline, the spokesman said by phone.Clean-up crews in Walsh County, North Dakota, have been working to plug the Keystone pipeline after a more-than 9,000-barrel oil leak last week.Work continues to progress at the site with about 200 personnel focused on clean-up and remediation activities…
