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The Oil Sands Weekly

The Oil Sands Weekly

CNRL updates shareholders on Horizon's performance . . . 

Canadian Natural Resources (CNRL) reminded investors this week that its Horizon oil sands mine is on track to "achieve higher than expected performance." 

Production out of the Horizon upgrader averaged 178,000 bbl/day in the fourth quarter but a recently completed expansion phase boosted output to 184,000 bbl/day in December and 195,000 bbl/day in January (higher than the facility's advertised nameplate capacity of 170,000 bbl/day).

Operating costs have declined to $22.53/bbl in Q4/2016 and is expected to decline further this year to a range of $24 to $27 per barrel.

The company will take a 24 day shutdown in the fall to tie-in remaining components for its final Phase 3 expansion. Once completed, output from the upgrader will increase by 80,000 bbl/day, bringing total capacity to 250,000 bbl/day.

CNRL is still mulling a debottlenecking of its fractionation tower, which would add another 5,000 to 15,000 bbl/day of capacity. The tie-ins would cost $90 million and require an extra 21 day shutdown. The company is expected to make a final investment decision sometime in the spring. 

CNRL stock has been under pressure lately due in part to a non-existent downstream refining business. The company releases fourth quarter and full year 2016 results on March 2, 2017.

Record fourth quarter performance at Syncrude . . . 

Imperial Oil reported record fourth quarter production at Syncrude, averaging 348,000 bbl/day of upgraded synthetic crude.

For the full year 2016, the mining giant produced 272,000 bbl/day, up from an average of 248,000 bbl/day in 2015. Syncrude had a stellar year reliability-wise, negating some of the effects of the forest fire outages back in May and June.

Syncrude is Alberta's largest oil sands mine and has the capacity to produce about 350,000 bbl/day of bitumen from its two mining operations - Mildred Lake and Aurora North. Bitumen produced at the mine is upgraded into light synthetic crude at the Mildred Lake upgrader.

The average selling price for Syncrude's upgraded oil was $57/bbl in 2016, down from $61 in 2015. Syncrude's Sweet Premium crude sells almost on par with West Texas Intermediate (WTI), which averaged $57.40/bbl last year (or US$43.50).

Imperial Oil owns 25% of the Syncrude operation. 

Unplanned maintenance takes a bite out of Kearl's production . . . 

Better-than-expected results at Syncrude were more than offset with worse-than-expected performance out of the Kearl oil sands mine.

Gross bitumen production out of Kearl averaged just 169,000 bbl/day in Q4, down from 203,000 bbl/day for the previous year quarter. The miss was blamed on planned and unplanned maintenance activities. 

For the full year 2016, Kearl produced an average of 169,000 bbl/day, up from 152,000 bbl/day in 2015. The mining operation has a nameplate capacity of 220,000 bbl/day of bitumen, which is blended with condensate and sold directly to market without upgrading. Bitumen realization prices averaged $26.50/bbl in 2016, down from $32.50 in 2015. However, sale prices improved considerably through the end of 2016, averaging $34.66/bbl in the fourth quarter.

On a more positive note, production out of the Cold Lake thermal in-situ operation averaged 159,000 bbl/day in Q4, up from 155,000 bbl/day in Q4/2015. The improvement was attributed to the timing of steam cycles at Cold Lake, which uses cyclic steam stimulation (CSS) to extract bitumen from the ground. For the full year 2016, Cold Lake produced 161,000 bbl/day, up from 158,000 bbl/day in the previous year. Cold Lake has a nameplate capacity of 180,000 bbl/day. 

Imperial Oil also reported that 2016 was its safest year on record, reflecting the lowest number of spills, incidents and workplace injuries.

Imperial still working on revising its 2016 oil sands reserves . . . 

Back in October, Imperial and parent-company ExxonMobil warned investors it may need to de-book about 3.0 billion barrels of reserves due to the plunge in oil prices. As per SEC (Securities and Exchange Commission) regulations, lower oil prices should reduce the volumes that can be economically extracted from the oil sands. Imperial expects that will translate into a 2.6 billion barrel decline in bitumen reserves at Kearl and 200 million barrel reduction at Cold Lake.

However, if/when oil prices recover, some of those de-booked assets could end up being rebooked in the future.

Adjusting to the new normal in Fort McMurray . . .

The Regional Municipality of Wood Buffalo is eliminating 168 jobs (including 46 vacant positions) in an effort to save $24.2 million from its operating budget. The city blamed slow growth in the oil sands and last year's wildfires. 

The municipality has been forced to adjust its budget as it "transitions" from frantic expansion pre-2014 to a more normal rate of growth.

Teck signs another First Nations participation agreement . . .

Vancouver-based Teck Resources has signed another participation agreement with the Fort McKay Métis for the Frontier oil sands project, located on land belonging to the First Nations community.

Teck signed a similar agreement with the Fort Chipewyan Métis back in December. President Fred Fraser called Teck a model for all oil sands operators, establishing a "real relationship" with aboriginal communities long before they started their regulatory application process.

Frontier is a proposed oil sands mining operation currently under review by the Alberta Energy Regulator (AER). Teck has not provided a timeframe for project construction or when a Final Investment Decision can be expected.

Federal Liberals chart a new course for First Nations involvement in resource projects . . . 

The federal Liberals also signed an agreement with various First nations groups in the Kitimat area to oversee environmental stewardship at the Pacific Northwest LNG Project.

Representatives from the Lax Kw'alaams Band and the Metlakatla First Nation communities will work with federal and provincial counterparts to ensure the project is "developed in the most environmentally sustainable way possible."

The BC government expects operator Petronas to announce a Final Investment Decision (or not) on the LNG project sometime this spring. 

Cautious optimism among Canada's drillers . . . 

The Petroleum Services Association of Canada (PSAC) is cautiously optimistic for the country's oilfield services sector, expecting a rather sharp rebound this year. PSAC revised its forecast for the number of wells to be drilled to 5,150 in 2017, an increase of 975 (or 23%) from its previous forecast released just 3 months ago. 

Spilt by province, 2,706 wells are expected to be drilled in Alberta, 1,985 in Saskatchewan, 367 in BC and 73 in Manitoba.

The forecast revision assumes an average natural gas price of $3.00/mcf AECO and US$52.50 WTI. The upward revision was attributed to more favourable policies out of Alberta, Ottawa and Washington, as well as a slew of new pipeline approvals on both sides of the border.

However, CEO Mark Salkeld warns of pricing pressures up ahead, noting that “the cost savings exacted from the services sector over the last two and half years are not sustainable but that will be corrected as activity and the demand for people and equipment increases.”

Cause of Saskatchewan's latest oil spill still unknown . . . 

The National Energy Board (NEB) is still investigating last week's pipeline spill that occurred near Storthoaks, Saskatchewan. Operator Tundra Energy estimates 5,000 litres were spilled with about three-quarters of the volumes recovered.

The NEB will confirm whether or not the clean-up is adequate and follow-up with Tundra on the root cause of the incident.

"Resource Extraction" regulation gets deleted south of the border . . . 

The US Congress has hit the delete button on a bill that required natural resource companies to disclose payments made to foreign governments, including taxes, royalties, fees, community investments and any information related to contract negotiations, commercial agreements and bids for exploration licenses. The regulation applied to oil and gas producers as well mining companies.

The bill was opposed by US oil majors, who argued they would need to reveal too much information, placing them at a competitive disadvantage over state-owned oil giants. Supporters argued the bill would help curb corruption in foreign jurisdictions. State-owned companies own 96% of the world's oil reserves and control 75% of the world's oil production.

The regulations have since been adopted by Canada and the European Union, who now may find themselves at a competitive disadvantage to their US counterparts.

The "resource extraction rule" was passed by the Obama Administration last June as part of the 2010 Dodd-Frank Wall Street Reform. The reversal is a small part of President Trump's promise to roll-back thousands of regulations introduced since the 2008 financial crisis.

Obama's methane cap next on the chopping block . . . 

The Trump Administration is also working on killing the Methane and Waste Reduction regulation enacted by the Bureau of Land Management (BLM) just days before Trump's inauguration. The regulation was intended to reduce natural gas flaring and venting, particularly in states like North Dakota that lack the infrastructure to collect the gas. 

The regulation was introduced with much fanfare last March during Prime Minister Trudeau's visit to the White House.

US lawmakers invoked the Congressional Review Act which allows them to roll back executive action taken during the past 60 days, provided the regulation is costly, exceeds agency authority or is redundant. The American Petroleum Institute (API) called the legislation "technically flawed and redundant," noting that individual states already have their own venting and flaring regulations in place. Other politicians have argued the BLM has overstepped their authority since air quality legislation falls under the jurisdiction of the EPA.

The US government estimates the country vented 375 billion cubic feet of natural gas into the atmosphere between 2009 and 2014.

Trump tests limits of DAPL protestors' resolve . . . 

North Dakota Senator John Hoeven says the final permit required to complete the Dakota Access Pipeline is pending, after Acting Army Secretary Robert Speer instructed the Army Corps of Engineers to grant an easement required to cross the Missouri River at Lake Oahe in North Dakota. 

The Army Corps of Engineers had previously ordered a new environmental impact assessment. Protestors and lawyers for the Standing Rock Sioux Native American Tribe have vowed to keep fighting the project, which is 95% complete. Another 76 protestors were arrested this week, bring the total to about 700. Protest camp leaders are asking the public to contribute to their legal defence fund.

Operator Energy Transfer Partners has allegedly already commenced drilling for the river crossing. Minority owner Phillips 66 (who has a 25% stake in the project) says it expects the pipeline to come into service by the middle of this year.

Pipeline approvals continue to roll (south of the border) . . . 

The US Federal Energy Regulatory Commission (FERC) has delegated authority to its staff while it works to hire new commissioners. FERC requires at least three commissioners to make decisions on interstate pipelines, but will be left with just two commissioners after the resignation of former chairman Norman Bay. Bay quit after President Trump promoted Cheryl LaFleur to the position of chairperson, allegedly due to Bay's efforts to "heavily regulate" the country's power and natural gas sector.

Commissioners serve a five-year term and are appointed by the President. FERC has been frantically approving projects before Bay's departure.

Energy Transfer Partners' US$4.2 billion Rover Pipeline, which will bring cheap US natural gas into Ontario, was approved this week. Rover doesn't technically cross the border (and therefore does not require approval from Canada) but connects to the Dawn natural gas trading hub in Ontario. Dawn is the largest underground storage facility in Canada.

Williams Company's Atlantic Sunrise expansion was also approved this week, connecting the Marcellus shale in Pennsylvania to markets in the mid-Atlantic and Southeastern US. 

TransCanada's Leach XPress, which connects the Marcellus and Utica shale to the Midwest and Gulf Coast was approved last week.

Spectra Energy's Nexus Gas Transmission line, which also transports natural gas from Ohio to the Dawn Hub in Ontario, is still awaiting FERC approval. The company filed its application with FERC at the end of 2015. National Fuel Gas Company's Northern Access Pipeline, which transports gas from Pennsylvania into Ontario, New York and the Midwest has also been sitting with FERC since March of 2015.

Other notable US energy news . . .

A Texas judge has put TransCanada's Keystone XL lawsuit on hold for the next 90 days, pending a decision from the new US Administration. TransCanada filed the lawsuit last year claiming President Obama exceeded his authority and violated terms of the North American Free Trade Agreement when he vetoed the pipeline.

A road construction crew accidentally punctured the Seaway Pipeline in a Dallas suburb this week, gushing oil into the air, spewing onto an adjacent highway. The line was shut while clean-up crews mopped up the mess. Seaway is a 50/50 joint venture between Enbridge and Houston-based Enterprise Product Partners. The company expects service to resume on or before February 7, 2017.

The US Senate has confirmed former ExxonMobil CEO Rex Tillerson as the country's Secretary of State. The vote was split largely along party lines in a 56-to-43 vote. Tillerson replaces outgoing Secretary of State John Kerry.

The Trump Administration has reinstated sanctions against Iran. Trump's national security adviser Michael Flynn put Iran "on notice" after it conducted a ballistic missile test. Iran has increased oil production by 1 million bbl/day since sanctions were lifted. It is unclear what effect, if any, this will have on global oil supplies. Most of Iran's crude is sold to Asia.

Shell divests more than half its North Sea production . . .

After weeks of rumours and speculation, Royal Dutch Shell has finally closed on a deal to sell various North Sea assets to Chrysaor Holdings for US$3.0 billion plus contingencies for higher oil prices and future discoveries. 

The assets include Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine and a 10% stake in Schiehallion. The divestitures represent 115,000 boe/day, dropping Shell's production from the North Sea by 55%. Shell will use the funds to pay down part of its US$30 billion debt load.

Chrysaor is backed by US investment fund EIG Global Energy Partners, chaired by former Shell executive Linda Cook. Cook says the North Sea has "undergone a revolution", becoming much more cost competitive with other assets globally.




US IMPORTS OF CANADIAN CRUDE
million bbl/day • preliminary data by EIA
US OIL INVENTORIES
million bbls • data by EIA
US OIL PROD'N & RIG COUNT
million bbl/day • data by EIA & Baker Hughes

3,635k
+437k ▲ 13.7%
BBL/D CDN EXPORTS TO US
8,915k
-46k ▼ 0.5%
BBL/D US PROD'N
494.76M
+6.47M ▲ 1.3%
BBL US INVENTORIES
583
+17 ▲ 3.0%
US RIG COUNT
CHANGE WK/WK  

Oil production in Alberta hit a record 3.26 million bbl/day in the month of November (the latest available data from the Alberta Energy Regulator). Imports of Canadian oil into the US also climbed to a record high last week, bringing the 4-week average to almost 3.5 million bbl/day.

Oil inventory volumes continue to rise south of the border due in part to rising imports. The US imported over 8 million bbl/day of crude last week, bringing total petroleum imports to about 10.5 million bbl/day. The US exports about 5 million bbl/day, mostly in the form of gasoline and refined products, much of that back to Canada and South American countries.

US oil rig counts jumped again this week, now at their highest level since October 2015. 

The Energy Information Administration (EIA) pegged last November's crude oil production at 8.9 million bbl/day, much higher than preliminary estimates of about 8.7 million bbl/day. Preliminary data is released weekly by the EIA while final figures are published 2 months in arrears.

This week's update on OPEC's production cut agreement:

  • Reuters reported that Russia has already cut 100,000 bbl/day of production, one-third of its promised 300,000 bbl/day production cut. However, Russian oil exports by pipeline rose from 4.358 to 4.409 million bbl/day in January.
  • The news agency also estimates OPEC production was reduced by 950,000 bbl/day in January,  with most of those cuts coming from Saudi Arabia.
  • Iraq has allegedly reduced output by 200,000 bbl/day in January, just under its 210,000 bbl/day reduction quota. Output fell from a high of 4.7 million to 4.51 million bbl/day last month. However, under terms of the OPEC deal, the country's "reference level" is 4.561 million bbl/day, suggesting output still needs to be reduced by another 159,000 bbl/day.

Both Russian and OPEC leaders have said they are not worried by rising production out of the US as they expect the increase to be absorbed by rising demand.




CURRENCIES • WEEKLY CLOSE
Friday close • data by Bank of Canada & ICE

99.84
-0.69 ▼ 0.7%
USD INDEX
76.76
+0.64 ▲ 0.8%
CDN DOLLAR
2.49%
+0.00 ▼ 0.0%
US 10Y Bond
1.77%
-0.01 ▼ 0.6%
CDN 10Y Bond
CHANGE WK/WK  

In his latest speech before the House of Commons this week, Bank of Canada Deputy Governor Sylvain Leduc says household debt and crazy home prices pose the largest risks to the country's financial system. Personal debt to disposable income has been rising steadily since the early 2000s, now at a ratio of 170%. National average home prices are six times the average household income. Leduc says only a sharp rise in unemployment could topple the housing market. The Bank of Canada says it will work towards "keeping inflation low, stable and predictable". 

This week's economic data out of Statistics Canada:

  • The country's real gross domestic product (GDP) rose 0.4% m/m in December, on higher output from the manufacturing, energy and finance sectors. Oil and gas extraction rose 1.3%, driven higher by a 3.7% increase in non-conventional extraction. Conventional oil and gas extraction contracted 0.9%.
  • The Industrial Product Price Index (IPPI) rose 0.4% m/m in December, led higher by a 5.5% increase in petroleum products. Motor gasoline prices rose 7.1% while and diesel rose 5.3%. Excluding energy, IPPI actually declined 0.4% for the month.
  • The Raw Materials Price Index (RMPI) also increased 6.5% m/m, also attributed to a 14% increase in energy products. Crude oil prices gained 15% in December, the largest increase since May of last year. Excluding energy, RMPI gained only 1.1%.
  • Consumer insolvency in Alberta rose another 6% in November, bringing the 12 month increase to 35%. Saskatchewan and Newfoundland are seeing a similar trend, where insolvencies have increased 34% and 31%, respectively.

Economic data out of the US was largely better than expected this week, including private payrolls, manufacturing and job growth. The US Federal Reserve left interest rates unchanged despite seeing signs of strength in labour markets and improvement in business activity. However, wage inflation remains below expectation, suggesting there's still plenty of slack in the US labour market.

GDP and inflation figures out of the Eurozone came in much stronger than economists were expecting this week, sending bond yields higher in most EU countries. The Trump Administration accused Germany of profiting from a weak Euro, adding to confusion in currency markets.




OIL PRICES • WEEKLY CLOSE
Friday close, USD/bbl • data by CME Group
56.81
+1.29 ▲ 2.3%
BRENT USD/BBL
53.83
+0.66 ▲ 1.2%
WTI USD/BBL
50.77
+0.60 ▲ 1.2%
CDN LT USD/BBL
40.41
+0.75 ▲ 1.9%
WCS USD/BBL
CHANGE WK/WK  

Monthly average benchmark crude prices were higher in January. Monthly average price and gains were as follows (versus the December average):

  • Brent Crude: US$55.60 (+1.2%)
  • West Texas Intermediate (WTI): US$52.76 (+1.1%)
  • Western Canadian Select (WCS): US$38.98 (+6.4%)
  • Canadian Light: US$49.66 (+2.6%)

The average heavy oil discount narrowed about 10% to US$13.80 a barrel in January.

Despite a drop in supply storage volumes, Natural gas prices sank over 8% this week on expectations of warmer winter weather for parts of the US.




ENERGY SECTOR PERFORMANCE
Friday close • data by TSX & NYSE

CANADIAN & US EQUITIES
Friday close • data by TSX & NYSE

SECTOR SUMMARY
Friday close • data by TSX & NYSE

The energy index was the worst performing sector on the TSX in January, declining 8.5%. January's decline wiped out most of the post-election gains. Analysts at TD Securities blamed the poor performance on anxiety over the potential for a "Border Tax Adjustment" on all Canadian exports to the US, including oil.

The best performing energy stock on the TSX last month was Enerflex (EFX), gaining almost 10%. Recent high-flyers were the worst performers in January, including MEG Energy, down almost 28% for the month reversing most of December's gains.

The US energy index was also the worst performing sector on the S&P500 in January, declining 3.6%. The best performing stock for the month was by far Kinder Morgan (KMI), gaining over 8%.

In their latest Industry NoteTD Securities is recommending investors go overweight the energy sector on expectations that market conditions are improving and oil markets should rebalance in 2017. TD expects international E&Ps will have significantly lagged Canadian domestic producers in 2016 but international companies should start to outperform this year.

TSX ENERGY STOCKS • WEEKLY CHANGE

Imperial Oil (IMO) reported a fourth quarter net income of $1.44 billion, including a $988 million gain from the sale of 500 Esso retail gas stations. For the full year 2016, the company earned $2.165 billion, up from $1.22 billion in 2015. Almost all of Imperial's earnings came from its downstream business, while upstream operations lost another $661 million last year (after a $704 million loss in 2015).

Enerplus (ERF) announced a $450 million capital budget for full year 2017, to be mostly spent in North Dakota. The company expects to increase liquids production by 25% by Q4 on expectations of a 50% increase in light oil output from the Williston Basin. Enerplus expects to exit 2017 at 92,000 to 97,000 boe/day of production, weighted about 50% towards liquids. The company says its capital spending and dividend is fully funded at US$55 WTI and US$3 NYMEX gas prices.

Pipe manufacturer Shawcor (SCL) reached a new 52 week high on the TSX this week.

NYSE ENERGY STOCKS • WEEKLY CHANGE

ExxonMobil (XOM) reported fourth quarter earnings of US$1.7 billion, down 40% from the previous year quarter: 

  • For the full year, the company earned US$7.8 billion, about half of 2015 earnings. 2016 earnings were adversely affected by a $2 billion impairment charge related to undeveloped gas assets in the Rocky Mountains
  • The company completed five major upstream projects in 2016 in Australia, Kazakhstan and the US, adding 250,000 boe/day of production capacity. Exxon also made three new discoveries last year in Guyana, Nigeria and Papua New Guinea, and has added 19 new exploration blocks to its portfolio. 
  • Full year production was 4.05 million boe/day, down 1% from the previous year. 
  • Capital expenditures in 2016 was reported at US$19.3 billion, 38% lower than the previous year.

Royal Dutch Shell (RDS.A) reported a fourth quarter profit of US$1.54 billion and full year profit of US$4.76 billion, much improved from the previous year:

  • Cash flow from operations declined 31% in 2016 to US$20.6 billion on lower revenues from its gas and downstream business, while upstream net losses widened to US$2.7 billion. 
  • Shell has divested US$15 billion worth of assets so far, about half its targeted divestitures of US$30 billion by the end of 2018.
  • The company plans to invest US$25 billion into "high quality, resilient" projects this year, down from US$26.9 billion in 2016.
  • CEO Ben van Beurden says he is "reshaping Shell" and is "confident 2017 will be another year of progress" for the company.

ConocoPhillips (COP) reported smaller-than-expected quarterly loss of just US$35 million in the Q4:

  • Operating costs have declined 21.5% from the same time last year. The company says its average breakeven is now less than US$40/bbl.
  • For the second quarter in a row, cash flow from operations exceeded expenditures and dividend payouts. 
  • Excluding Libya, 2016 production increased 3% to 1.567 million boe/day but is expected to remain relatively flat this year.
  • Canadian production hit a record high last year due to record output at its Surmont in-situ oil sands facility and start-up of Christina Lake's Phase F expansion. 
  • The company also increased its quarterly dividend by 6% to US$0.0265 per share.

Valero Energy (VLO) reported a fourth quarter net income of US$367 million. The refiner made US$2.3 billion for the full year 2016, versus US$4.0 billion earned in 2015. Valero sees strength in the domestic market for refined products and expects crude prices to remain "relatively low". The company processed 2.9 million bbl/day of crude, reflecting a 95% capacity utilization rate. Valero operates 15 refineries - 13 in the US, 1 in the UK and 1 in Canada. The company's Jean Gaulin refinery, just outside Quebec City, is Canada's second largest refinery with a processing capacity of 265,000 bbl/day.

Anadarko Petroleum (APC) reported a US$515 million fourth quarter loss, bringing full year losses to US$3.1 billion. The company averaged 774,000 boe/day in the fourth quarter, down from 779,000 boe/day in Q4/2015. Anadarko says it has reduced its operating expenses by almost 30% by the end of 2016 while capital expenditures are down 50% from the previous year. The company has another US$3.5 billion of divestitures on the books that should close in the first quarter.

Marathon Petroleum (MPC) reported a 21% increase in Q4 profits, boosted by better performance from its refining and infrastructure business. Net income rose to $227 million, up from $187 million in Q4/2015. Marathon processed about 1.04 million bbl/day of crude through its refineries last year.

Independent refiner and midstream player Phillips 66 (PSX) reported a sharp drop in quarterly profits blamed on weak refining margins and an extended shutdown of its LA Refinery. Earnings declined to US$163 million, down 75% from last year. For the full year, the company turned a profit of US$1.5 billion, down from US4.2 billion in 2015. The company also announced it is in the process of upgrading its Billings Refinery in Montana to process 100% Canadian heavy crude. The project is should be completed by the first half of 2017. 

Enterprise Energy Partners (EPD) reported full year income of US$3.6 billion, up 3% from the previous year. The company has US$6.7 billion worth of projects currently under construction including a newly sanctioned isobutane dehydrogenation plant at Mont Belvieu, Texas.

NGL distributor ONEOK will purchase all outstanding shares of its MLP ONEOK Partners for US$9.3 billion. The newly combined US$30 billion company operates 37,000 miles (59,500 km) of natural gas and NGL pipelines, processing plants, fractionators and storage facilities located throughout the US. ONEOK also raised their annual dividend by 21% to US$2.98 per share and will be issuing 168.9 million new shares to help finance the deal.

MLPs (Master Limited partnerships) do not pay corporate taxes and instead pay out profits to shareholders in the form of juicy dividends. As cash flow has dried up in recent years, MLP stocks have come been under pressure, with many getting taken over by their parent companies on both sides of the border.

Camp operator Civeo (CVEO) announced plans to issue 20 million shares at $3/share. The stock hit a new 52 week high of US$3.60 earlier this week before sinking over 10% on news of the share issuance. The company expects to benefit greatly from an anticipated resurgence of activity in the energy patch. Civeo operates camps in North Dakota, Texas, Australia and Canada including the 8 lodges near Fort McMurray.

UPGRADES & DOWNGRADES

  • Anadarko Petroleum (NYSE:APC): Upgraded from Underweight to Neutral at Atlantic Securities.
  • Athabasca Oil Corp (TSX:ATH): Upgraded from Hold to Buy at TD Securities.
  • BP (NYSE:BP): Upgraded from Hold to Buy at Societe Generale.
  • Canadian Natural Resources (TSX:CNQ): Upgraded from Hold to Buy at Desjardins.
  • Clean Harbors (NYSE:CLH): Upgraded from Sector Weight to Overweight at KeyCorp.
  • Marathon Oil (NYSE:MRO): Upgraded from Sector Perform to Outperform at Scotiabank.
  • Precision Drilling (TSX:PD): Upgraded from Neutral to Overweight at JP Morgan Chase.
  • Tesoro (NYSE:TSO): Upgraded from Neutral to Overweight at JP Morgan Chase.
  • Enbridge Energy Partners (NYSE:EEP): Downgraded from Buy to Neutral at Mizuho.
  • Royal Dutch Shell (NYSE:RDS/A): Downgraded from Buy to Hold at Societe Generale.

NEXT WEEK'S EVENTS

Tuesday:

  • December Trade Balance released by StatsCan @ 8:30am ET
  • API Weekly Statistics Bulletin released @ 4:30pm ET
  • Q4/2016 earnings releases: BP

Wednesday:

  • EIA Petroleum Status Report released @ 8:30am ET
  • Q4/2016 earnings release: Suncor Energy, Mullen Group and Birchcliff Energy

Thursday:

  • EIA Natural Gas Report released @ 10:30am ET
  • Bank of Canada Deputy Governor Lawrence Schembri delivers speech in London, Ontario
  • Q4/2016 earnings releases: MEG Energy and Precision Drilling

Friday:

  • January Labour Force Survey released by StatsCan @ 8:30am
  • Baker-Hughes Rig Count released @ 1:00pm ET

Next edition of the Oil Sands Weekly: Friday February 10, 2017 @ 8pm MT.

The Oil Sands Weekly

The Oil Sands Weekly

The Oil Sands Weekly

The Oil Sands Weekly

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