Baker Hughes, a GE company has posted its Weekly Rig Count reports.
Prices for Canadian heavy and light oil should improve somewhat in 2019 because of increased demand from refineries in the United States, improving transportation capacity and mandatory productions cuts in Alberta, according to Deloitte's Resource Evaluation and Advisory (REA) group. In its latest report, Deloitte says these factors should begin to reduce the current oversupply of Canadian oil and help narrow the larger-than-usual differentials with WTI prices that were present in the final quarter of 2018.
"The severe imbalance between Canada's production and its capacity to export that oil caused Canadian oil price benchmarks to collapse over the past few months," says Andrew Botterill, Partner, REA group. "Heavy oil differentials were as high as US$45 per barrel in mid-November while light oil differentials reached as much as US$35 per barrel, although they did begin to drop back slightly toward the end of the year as refineries in the U.S Midwest returned to more normal utilization rates for Canadian oil."
Botterill says the Canadian supply glut remains an issue, however, noting that storage stockpile volumes in Alberta rose to approximately 35 million barrels in 2018. Mandatory production cuts imposed by the Alberta government and which take effect this month should reduce production by 325,000 barrels a day until the excess storage volumes dissipate, after which the cuts will drop to 95,000 barrels a day for the rest of 2019. Deloitte expects this will decrease differentials for Canadian oil price benchmarks and increase provincial royalty revenues in Alberta and in Saskatchewan, where there are no mandatory production cuts but where crude prices will also rise because of the reduction in oversupply.
Deloitte notes that Canadian oil prices should also strengthen in 2019 because of improved export capacity as a result of the Alberta government's plan to purchase additional rail cars to transport crude oil and the expanded capacity of Enbridge's Line 3 pipeline, which transports a variety of Canadian crude oil to the United States. The extra rail cars should increase exports by 120,000 barrels a day by 2020, while the Enbridge pipeline will add approximately 370,000 barrels a day of export capacity, an increase of about nine percent.
"Increased demand for Canadian oil from Alberta's Sturgeon refinery and from U.S. Gulf Coast refineries looking to replace some of their heavy crude supplies that used to come from Mexico and Venezuela is another reason we expect the price differential with WTI to continue narrowing in 2019 and beyond," says Botterill. "At this point, we are forecasting a price of US$58 per barrel for WTI this year and C$50 per barrel for WCS".
Botterill says Deloitte expects Canadian natural gas prices to continue to trail behind the Henry Hub benchmark in 2019 despite some recent gains. No near term growth is expected for Canadian natural gas production because of high U.S. production rates and the possibility that short-term demand in Alberta could slow as oil sands producers - whose extraction efforts account for about 40 percent of natural gas consumption in the province - scale back their operations due to the mandatory production cuts. Several natural gas producers continue to take advantage of any available price diversification opportunities, however, including shipping volumes to East Coast markets where prices are higher.
"We expect low AECO prices to continue for several years given the current situation," says Botterill. "Our current forecast for AECO is C$1.75 per Mcf in 2019 while Henry Hub should be US$3 per Mcf."
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Speaking at the closing of the AIPN 2019 International Petroleum Summit (IPS), Ryan Lance, Chairman and Chief Executive Officer of ConocoPhillips spoke about his company's "hyper focus on returns" highlighting that the "returns the energy industry has generated have been negative over the last 10 to 15 years. Investors are frustrated. We chase the cycle up only, they have to chase the cycle back down on the back side. We recognize it's a mature industry growing at 1 percent per year. There's a lot of companies, some tremendous companies ... that have dramatic growth profiles. But when they put a hundred percent of their cash flow back into the business, don't pay the shareholder a fair amount of money, they're actually destroying value in the long run.
In less than four years, the Quest carbon capture and storage (CCS) facility has captured and safely stored four million tonnes of CO2, ahead of schedule and at a lower cost than anticipated. Four million tonnes of CO2 is equal to the annual emissions from about one million cars. Quest has now stored underground the most CO2 of any onshore CCS facility in the world with dedicated geological storage.
Oil potential remains abundant beyond shale, according to Association of International Petroleum Negotiators
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Over the past decade, uncertainty has been constant in Canada's oil and gas industry, brought on in part by unknown investment outlooks, lack of market access, and a complex regulatory process. According to PwC Canada's 2019 Energy Visions report, there are two main factors that could catalyze change for the oil and gas industry: a national energy strategy as well as further technological innovation.
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Crude-oil-to-chemicals technology could boost per-barrel profits for refiners and petrochemical producers: IHS Markit
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Canada's vast gasoline production and transportation infrastructure ensures flexible and reliable supply for Canadians but unique market conditions in each region drive prices at the pump, according to a new report released by the National Energy Board (NEB).
Canbriam Energy Inc. and Pacific Oil and Gas Ltd. have announced the signing of definitive documents for the acquisition by PO&G of all of the issued and outstanding shares of Canbriam for cash consideration. Canbriam's Board of Directors has provided unanimous approval of the Transaction, and all of the officers, directors and significant shareholders of Canbriam representing greater than 90 percent of the outstanding Canbriam shares have entered into support and lock-up agreements in favor of the Transaction.
Fuelled, Canada's leading energy equipment marketplace, announced an agreement with PricewaterhouseCoopers Inc., LIT, in its capacity as the court appointed Receiver of Trident Exploration. This agreement will allow Fuelled to act as the exclusive sales agent for Trident's surplus oil and gas equipment. Fuelled is representing the Receiver on the divestiture of approximately 250 pieces of production equipment located in Western Canada. "We look forward to working closely with the Receiver on this engagement while we continue to deliver an unparalleled customer experience to our online buyers" said Austin Fraser, VP of Fuelled. "Trident's equipment includes gas compression, separation, dehydration, refrigeration, MCC's and other gas processing equipment that we believe there is strong demand for from our customers domestically as well as in the US and Overseas"
The International Gas Union (IGU) released its 2019 Wholesale Gas Price Survey at Flame 2019. The survey is the eleventh to be undertaken in a series that began in 2007. The eleven surveys examine the dramatic changes in wholesale price formation mechanisms during a period of key developments in the global gas market.
Athabasca Oil Corporation has reported strong operational and financial performance in the first quarter of 2019. With its resilient business model, the Company is well positioned to generate free cash flow in 2019 and beyond.
Pfannenberg, a manufacturer of thermal management and signaling technologies, announces a new video highlighting the ease of installation of its line of PATROL signaling devices, including both audible and combined visual-audible signal models. Pfannenberg signaling devices are designed to be installed in less than a minute. Video viewers can see a direct head-to-head comparison with competitive signaling alarms that take considerably more time to install.
TC PipeLines, LP reported net income attributable to controlling interests of $93 million and distributable cash flow of $116 million for the three months ended March 31, 2019.
Baker Hughes, a GE company announced that the Baker Hughes international rig count for April 2019 was 1,062, up 23 from the 1,039 counted in March 2019, and up 84 from the 978 counted in April 2018. The international offshore rig count for April 2019 was 251, up 4 from the 247 counted in March 2019, and up 57 from the 194 counted in April 2018.
From 2016 to 2018, capital investment in Canada's upstream oil and gas industry (essentially, exploration and production) increased 15 percent compared to 41 percent in the U.S. over the same period, finds a new study released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
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TransCanada Corporation announced that shareholders representing approximately 99.55% per cent of votes cast approved a special resolution authorizing the Company to amend its articles to change its name to:
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AltaGas Ltd. reported first quarter 2019 financial results and provided an update on its business, including the expansion of its integrated western Canadian midstream service offering to include global energy export capabilities, through its Ridley Island Propane Export Terminal (RIPET).
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A Southwest Research Institute methane leak detection system is taking flight as part of a U.S. Department of Energy (DOE) National Energy Technology Laboratory (NETL) project to develop automated inspections of oil and gas facilities.
The cost of building
and operating oil sands projects has fallen dramatically in recent years and
total oil production is expected to rise by another 1 million barrels per day
(mbd) by 2030. But external factors—such as price uncertainty caused by
pipeline constraints—are contributing to a more moderate pace of production
growth than in years past, a new report by business information provider
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Vermilion Energy Inc. has released its operating and condensed financial results for the three months ended March 31, 2019. The company announced a 2 percent increase in its production averages over the previous quarter, including a 1 percent boost in its Canadian operations.
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Crescent Point Energy Corp. has selected the AFTI WatchDog as a key service provider to support its field automation strategy.
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