DOB Morning Briefing
Here’s your early morning summary of the latest oil and gas news — a concise look at what you need to start your day in the know. Get more detailed, contextual information in the noon-hour DOB, or view the continuous feed of articles all morning at www.dailyoilbulletin.com.
Rig Locator activity dashboard
- On Wednesday there were 348 active rigs (defined as rigs that are drilling, rigging up or moving) in Western Canada, up from 347 active rigs on Wednesday. There were 290 rigs down on Tuesday for an overall activity rate of 55 per cent.
- For the same week a year ago, activity levels were at 28 per cent.
Oil prices down
- Oil slipped on Friday, pressured by growing global stocks, while expectations that an oil output cut by producers might eventually balance the market helped to underpin prices.
- Brent crude futures were trading at US$55.57 at 0945 GMT, eight cents below their last close.
- U.S. West Texas Intermediate (WTI) crude futures were down four cents at US$53.32.
- Both appeared on track for losses on the week, though prices had moved higher earlier in the session in response to news that producer group OPEC could extend an output cut aimed at reining in a global supply overhang.
Western Canadian producers again discussing long-term mainline transportation deal with TransCanada
- TransCanada Corporation is “very encouraged” about discussions with western Canadian producers over the past few weeks to attract more long-term volumes to the Canadian Mainline, although there is still no agreement, says CEO Russ Girling.
- The company had left the door open to further discussions on a “load attraction” deal when it announced it would not be proceeding with a new, long-term, fixed-price proposal for Mainline transportation from Empress, Alta., to Dawn, Ont., after an open season failed to attract sufficient producer bids (DOB, Nov. 15, 2016). Producers were offered 10-year terms with a provision for early termination.
- “Regardless of how those [current] discussions proceed, both the western portion of the Canadian Mainline and the Eastern Triangle are expected to continue to generate stable returns for our shareholders,” Girling said in a conference call to discuss fourth quarter 2016 results.
Cenovus ponders restarting oilsands projects
- Cenovus Energy Inc. hinted that construction could restart on two deferred steam-assisted gravity projects in the next couple of years and says more information will be released in the coming months.
- The company intends to provide an update on its plans for Foster Creek phase H and Narrows Lake phase A, including expectations for capital costs and timing for each project at its investor day in June.
- Over the course of 2016, Enbridge Inc. said it made good progress on its secured growth capital program, bringing six major projects into service, and expanding its footprint in a number of business lines. In 2017, the company expects to put another $6 billion of organic growth projects into service, including its Regional Oil Sands Optimization project, the Norlite Pipeline System project, and the Bakken Pipeline System, which the company expects will contribute to growing available cash flow from operations."
Enbridge announces senior management on closing of Spectra deal
- On closing of the merger with Spectra Energy Corp., the following senior management appointments, reporting to Al Monaco, president and CEO of Enbridge Inc., will take effect:
- Guy Jarvis, executive vice-president and president, liquids pipelines.
- Bill Yardley, executive vice-president and president, gas transmission and midstream.
- John Whelen, executive vice-president and chief financial officer.
- Vern Yu, executive vice-president and chief development officer.
- Bob Rooney, executive vice-president and chief legal officer.
- Cynthia Hansen, executive vice-president, utilities and power operations.
- Karen Radford, executive vice-president and chief transformation officer.
- Byron Neiles, executive vice-president, corporate services.
Spectra continues advancing western Canadian projects
- Projects in Western Canada continue to advance toward their respective in-service dates, announced Spectra Energy Corp., specifically Jackfish Lake (first half of this year) as well as RAM and High Pine (second half of this year). All three projects have received their regulatory permits, and are under construction.
- Earlier this week, the National Energy Board (NEB) said it will hold a public hearing to consider a proposal from Westcoast Energy Inc., doing business as Spectra Energy Transmission, to build and operate the 27-kilometre-long Wyndwood pipeline expansion project in northeast British Columbia.
- At Union Gas, both the 2017 Dawn-Parkway expansion and the Panhandle Reinforcement projects remain on schedule to be placed in-service in the second half of this year.
Spectra Western Canada Transmission & Processing segment results impacted by lower gathering and processing revenues
- Ongoing EBITDA from Western Canada Transmission & Processing was $105 million in fourth-quarter 2016, compared with $123 million in fourth quarter 2015, Spectra Energy Corp. reported. The segment’s ongoing results largely reflect lower gathering and processing revenues. Fourth quarter 2016 results exclude special items of $31 million, primarily from a non-cash loss on the sale of assets, as well as from continued contract demand credits net of insurance recoveries at its Grizzly Valley operations in British Columbia associated with significant flooding in June. Fourth quarter 2015 results exclude special items of $14 million for employee and overhead reductions and a non-cash asset impairment.
- For the year 2016, ongoing EBITDA for Western Canada Transmission & Processing was $443 million, compared with $516 million in 2015. The 2016 period excludes special items of $56 million for contract demand credits net of insurance recoveries associated with flooding in British Columbia, employee and overhead reductions, and a non-cash loss on the sale of assets. The 2015 period excludes special items of $25 million related to employee and overhead reduction costs and a non-cash asset impairment.
Inter Pipeline generates record funds from operations
- Inter Pipeline Ltd. generated record funds from operations (FFO) of $849 million, a 10 per cent increase over 2015 results
- Also, effective Jan. 1, 2017, Christian Bayle has been appointed to Inter Pipeline’s board of directors. Bayle has been an employee of Inter Pipeline for nearly 20 years, including serving as its president and chief executive officer since January 2014.
Fluor awarded contract for Woodfibre LNG project in Canada
- Fluor Corporation has signed an agreement with JGC America, Inc. (JGC) to provide construction-related support to the front-end engineering and design (FEED) services for the Woodfibre LNG project in the District of Squamish near Vancouver.
Senate set to approve Trump’s EPA pick as White House targets regulation
- The U.S. Senate is expected to approve President Donald Trump’s pick to run the Environmental Protection Agency (EPA) on Friday over the objections of Democrats and green groups worried he will gut the agency, as the administration readies executive orders to ease regulation on drillers and miners.
- Trump’s nominee, Oklahoma Attorney General Scott Pruitt, is likely to pass the vote scheduled for midday with the support of nearly all the Republicans in the Republican-controlled Senate. The vote could take place earlier in the day.
As U.S. shale oil activity surges, sand could be in short supply
- Demand for frack sand has surged in recent weeks as U.S. producers rush back to the oilpatch, stoking concern that supplies of the key component of drilling may not be able to keep up with demand later this year, industry professionals said.
- The growing appetite for frack sand comes as oil producers have added hundreds of rigs in U.S. oil fields from Texas to North Dakota. Last week, the U.S. rig count hit 591, the highest since October 2015 and nearly double the figure seen seven months ago.
Governor, Army Corps block deadline extension for Dakota pipeline protesters
- Federal officials and North Dakota’s governor on Thursday refused to extend next week’s evacuation deadline for activists living in camps that have been a base for months for demonstrations against the multibillion-dollar Dakota Access oil pipeline.
Asian LNG prices continue slide as supplies rise, demand thins
- Asian spot LNG prices fell for a sixth consecutive week as a series of sell tenders launched this week are seen offering supplies into a market with thin demand following a warmer-than-expected winter in North Asia.
- Spot prices for LNG for April delivery were pegged at around $6.40 per mmBtu, about 50 cents below last week's levels, according to five traders surveyed by Reuters.
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