Official (Alberta) Oil Discussion Thread

[Fuzz]

The only real way to know is to check the futures market for Subway double meat orders.

[red sky]

With AECO and WCS prices in the gutter I would suggest that companies that do not have exposure to US price points will struggle. If you want to play the sector you might as well invest in strong US oil companies like EOG, PXD, and FANG.

A rising loonie with depressed Canadian energy prices does not make for a good recipe. The industry as a whole will and is starting to change. As prices go up and companies are generating free cash flow, you will start to see share buybacks and increased dividends versus increased capex and production growth. The return on capital, even when oil was $100/bbl, did not really offer a value proposition. Until that formula changes, the sector will remain cautious and tempered.

[GGG]

WCS should recover throughout the year based on forecasts so if you believe them you might have a good opportunity in the Canadian companies. I agree that sustained production and small brownfield expansion will be the focus of capital and using free cash to pay dividends.

This bodes well for a Cenovous type company not so much for a MEG type company which has real high debt loads.

[chemgear]

http://business.financialpost.com/fe...reen-activists

‘Eco-colonialism’: Rift grows between Indigenous leaders and green activists

He was quoted in the campaign’s news releases, filed complaints to the United Nations and spoke defiantly to investors. Environmental group Stand.earth even described him as the “poster boy” for Indigenous opposition to Enbridge Inc.’s pipeline.

Louie’s experience is indicative of a widening rift between Indigenous communities and activists over natural resources, particularly in British Columbia, the focal point of major green campaigns generously funded by U.S. interests to thwart oil and gas exports.

They said in interviews they’ve had enough of activists invading their lands, misleading them about their agendas, recruiting token members to front their causes, sowing mistrust and conflict, and using hard-line tactics against those who don’t agree.

“The best way to describe it is eco-colonialism,” said Ken Brown, a former chief of the Klahoose First Nation in southwestern B.C. “You are seeing a very pervasive awakening among these First Nations leaders about what is going on in the environmental community.”

Their partnership ended bitterly because the two sides had conflicting objectives. He wanted better benefits; the activists wanted the project to fail.

The projects were attacked by groups such as Save Our Rivers and Western Canada Wilderness Committee for being harmful to fish habitat, and Brown’s band was criticized for being “sellouts and socially irresponsible people looking for the quick buck,” he said.

Vancouver-based researcher and blogger Vivian Krause has tallied the large sums poured by U.S. groups to fight pipelines and gas projects in Canada by analyzing tax filings.

The biggest funder has been the Gordon and Betty Moore Foundation, which has granted more than $190 million to First Nations, environmental and other organizations working in B.C., Krause said.

The top recipient of funds from the Moore Foundation is Tides Canada, which received at least $70 million, she said. Tides Canada spends that money internally and re-grants it to other groups, particularly First Nations organizations.

Other big U.S.-based funders are the Rockefeller Brothers Fund, the William and Flora Hewlett Foundation and Pew Charitable Trusts.

“These American interests are trying to stop these projects any way they can, and one of the best ways is by leveraging the constitutional rights of First Nations in the courts,” Krause said.

[Mr.Coffee]

Originally Posted by red sky

With AECO and WCS prices in the gutter I would suggest that companies that do not have exposure to US price points will struggle. If you want to play the sector you might as well invest in strong US oil companies like EOG, PXD, and FANG.

A rising loonie with depressed Canadian energy prices does not make for a good recipe. The industry as a whole will and is starting to change. As prices go up and companies are generating free cash flow, you will start to see share buybacks and increased dividends versus increased capex and production growth. The return on capital, even when oil was $100/bbl, did not really offer a value proposition. Until that formula changes, the sector will remain cautious and tempered.

exactly right. My understanding is that Tourmaline is now starting to allocate their free cash flow to dividends... that's not really the usual strategy for that management team and it's not really a good signal for where they think their dollars are best put to use.

NG producers are still in some really tough times.

[Ashasx]

Chinese firm Sequoia Resources exits oil sites in need of environmental cleanup

A Chinese-controlled company that snapped up distressed oil and gas assets in a series of deals told regulators it plans to cease operations, potentially dumping hefty environmental liabilities on an industry already struggling with a sharp rise in unfunded cleanup.

Sequoia Resources Corp. told Alberta's Energy Regulator (AER) that it is unable to clean up thousands of sites for which it has licences and that it would "cease operations imminently" due to defaults on municipal tax payments, according to regulatory documents.

A notice posted on the website of tax and consultancy firm PricewaterhouseCoopers LLC says Sequoia has filed initial paperwork that typically precedes a court-supervised restructuring.

The company's struggles raise questions about oversight of transactions in cases where purchasers lack the financial wherewithal to clean up assumed liabilities. It also threatens to exacerbate a spike in idle oil and gas wells leftover following a string of corporate bankruptcies across the industry.

The provincial energy regulator has sought to crack down on an increase in companies using insolvency proceeds to shed environmental liabilities. Whether or not provincial environmental regulations trump federal insolvency laws is currently the subject of a Supreme Court appeal led by the AER in the case of defunct Redwater Energy Corp. In a letter dated March 1, it warned Sequoia against walking away from its commitments.

"While the AER encourages companies to be proactive and engage with their partners and the regulator when ceasing operations, the ceasing of operations does not absolve the licensee from complying with its obligations, including end of life obligations," the regulator said.

However, the regulator has also given companies substantial leeway to complete deals, even as it warns against the risks of unfunded liabilities.

In October, 2016, court documents show Sequoia submitted a "request to the AER to apply discretion" to rules meant to stop financially shaky companies from buying distressed assets. Sequoia later closed the purchase of assets from Waldron Energy.

https://www.theglobeandmail.com/repo...ticle38246532/

So this company comes in, buys a bunch of legacy assets for pennies, divests its winners and keeps the losers in Sequoia to die, passing off the liabilities to Alberta tax payers.

Unreal.

[GP_Matt]

If they can get away with it what will stop every company from selling their assets to a shell company, buying back the good assets and then declaring the shell company bankrupt.
It seems insane and will not make us look good in BC where some environmentalists are concerned about the exact same thing happening with pipelines.

[RM14]

Originally Posted by GP_Matt

If they can get away with it what will stop every company from selling their assets to a shell company, buying back the good assets and then declaring the shell company bankrupt.
It seems insane and will not make us look good in BC where some environmentalists are concerned about the exact same thing happening with pipelines.

B.C. environmentalists think we look awful in any case. They will never look at Alberta and say, "good job", until the industry is eliminated. Their opinion is irrelevant at this point.

[Robbob]

This is why the Redwater decision that went before the Supreme court is vital. The decision is due in May I believe.

https://www.scc-csc.ca/case-dossier/...aspx?cas=37627

[Husky]

Originally Posted by Ashasx

Chinese firm Sequoia Resources exits oil sites in need of environmental cleanup

https://www.theglobeandmail.com/repo...ticle38246532/

So this company comes in, buys a bunch of legacy assets for pennies, divests its winners and keeps the losers in Sequoia to die, passing off the liabilities to Alberta tax payers.

Unreal.

People need to realize this does not impact tax payers. It gets takem care by owl fund which is funded by industry. Every year they get hit with 2 orphan well levy bills.

[Harry Lime]

Originally Posted by Husky

People need to realize this does not impact tax payers. It gets takem care by owl fund which is funded by industry. Every year they get hit with 2 orphan well levy bills.

So the industry doesn't recoup these losses elsewhere on the backs of government or end-users? That's nice of them.

[Bring_Back_Shantz]

Originally Posted by Harry Lime

So the industry doesn't recoup these losses elsewhere on the backs of government or end-users? That's nice of them.

Anybody want to play a game of “who doesn’t understand how commodity based businesses work”

Obviously it’s not this guy. He can totally explain how a company with no say in the selling price of their product can pass a cost along to an end user. Also, how they can pass cost along to the government. He gets it!

[GGG]

Originally Posted by Husky

People need to realize this does not impact tax payers. It gets takem care by owl fund which is funded by industry. Every year they get hit with 2 orphan well levy bills.

Sort of that program is pretty underfunded relative to current liabilities

[Canehdianman]

Originally Posted by Husky

People need to realize this does not impact tax payers. It gets takem care by owl fund which is funded by industry. Every year they get hit with 2 orphan well levy bills.

The levy could increase 10x and the orphan well fund would still be underfunded.

At the end of the day it absolutely will be taxpayers left footing the bill.

[Ashasx]

Originally Posted by Husky

People need to realize this does not impact tax payers. It gets takem care by owl fund which is funded by industry. Every year they get hit with 2 orphan well levy bills.

The industry is not a tax payer? The liabilities simply get passed onto others. They don't disappear.

[Husky]

Originally Posted by Canehdianman

The levy could increase 10x and the orphan well fund would still be underfunded.

At the end of the day it absolutely will be taxpayers left footing the bill.

Owl cost to service is typically 3 to 4x industry norms. For what its worth i heard they are internally being aufited as services are given to friends and family versus best quote.

[Ashasx]

More vilification of the oil and gas industry in the media:

Schwarzenegger planning to sue oil companies for 'knowingly killing people all over the world’

"This is no different from the smoking issue. The tobacco industry knew for years and years and years and decades, that smoking would kill people, would harm people and create cancer, and were hiding that fact from the people and denied it. Then eventually they were taken to court and had to pay hundreds of millions of dollars because of that,” Schwarzenegger, a global environmental activist, said.

“The oil companies knew from 1959 on, they did their own study that there would be global warming happening because of fossil fuels, and on top of it that it would be risky for people’s lives, that it would kill.” Schwarzenegger accused oil companies of being irresponsible and vowed to go after them.

"It’s absolutely irresponsible to know that your product is killing people and not have a warning label on it, like tobacco,” he said.

“Every gas station on it, every car should have a warning label on it, every product that has fossil fuels should have a warning label on it.”

http://thehill.com/blogs/blog-briefi...wingly-killing

[Fuzz]

Just so we are clear...this guy?



The hypocrisy is indeed large.

He owns many fuel efficient family cars.

http://www.celebritycarsblog.com/cel...chwarzenegger/

And a private jet. The least polluting way to fly!

Get bent.

[CaptainCrunch]

Wonder if Tides is going to finance his next movie?

That's how they work with the celebrity environmental base.

[Ducay]

The doofus knows his "solution" of having warning labels on all gas stations and products with fossil fuels in them (read: everything) he is just going to increase fossil fuel usage through printing of billions of stickers (plastics) and additional transport and servicing/installation costs (fuels)?

I'm all for it! More demand! Thanks Arnold