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The Oil Sands Weekly

The Oil Sands Weekly

Suncor unveils new expansion plans, but not before 2020 . . . 

Suncor Energy announced plans to file for regulatory approval of the Lewis project sometime this year. Lewis is an in-situ property located about halfway between Fort McMurray and Fort McKay, on the east side of the Athabasca River. Lewis will use SAGD (steam-assisted gravity drainage) to extract bitumen in place, but the company says it is exploring options to use solvents or electromagnetic heating to reduce steam loads.

The company says the facility could eventually produce up to 160,000 bbl/day. No timeline was given for an expected sanction date but the company hinted construction could begin in 2024 with first-oil coming online by 2027.

Lewis would likely be after the Meadow Creek East project, which already received approval in March. Meadow Creek is a Petro-Canada legacy property, owned jointly with Nexen. Suncor also says it plans to file paperwork for Meadow Creek West sometime this year. Each phase of development will likely have an estimated capacity of 40,000 bbl/day. Meadow Creek is located 20 km SW of Anzac, just south of Fort McMurray. If everything goes according to plan, first oil could be as early as 2023.

CEO Steve Williams says he hopes to use the concept of replicating modules to save capital costs while bringing 30,000 to 40,000 bbl/day online every 12 to 18 months. The CEO warned not to expect any new construction spending before 2020 at the earliest.

Federal Liberals boost funding for Clean Tech in energy sector . . .

Canada's Minister of Natural Resources Jim Carr announced $21 million in funding for "Clean Tech" projects related to lowering GHG emissions from the oil sands. The projects are being funded through Natural Resource Canada’s Oil and Gas Clean Tech Program (aka the Energy Innovation Program), which has received $50 million over the past two years.

Approved projects include InnoTech's carbon capture pilot, Field Upgrading's partial upgrading technology, MEG Energy's Enhanced Modified VAPour Extraction process, and Cenovus' Hot Solvent Extraction process. 

KMI Canada stock coming to the TSX . . .

Kinder Morgan Canada has filed a preliminary prospectus with Canadian securities regulators in preparation for its upcoming IPO. The company plans to issue about 80 to 90 million Restricted Voting Shares at a price of $19 to $22 a share. The sale is expected to generate $1.75 billion.

Parent-company Kinder Morgan will own about 260 million Special Voting Shares, retaining ownership of about 75% of its Canadian subsidiary. The IPO would be the largest in Canadian history, valued at about $7 billion. Kinder Morgan says it will use the funds to build the $7.4 billion expansion of the Trans Mountain pipeline.

The filing squashed rumours that Kinder Morgan was close to selling a stake to US-private equity firm ArcLight Capital Partners. Aside from the Trans Mountain line Kinder Morgan Canada includes the Canadian portion of the Cochin condensate pipeline, various terminals in Edmonton and Vancouver as well as the Puget Sound and Jet Fuel pipelines.

Kinder Morgan plans to issue the new shares between May 22 and May 29 on the TSX.

Looking for leverage to reject Energy East . . . 

The National Energy Board (NEB) is now asking the general public whether upstream and downstream emissions should be factored into their pipeline approval process. The changes, if any, would be applied to TransCanada's 1.1 million bbl/day Energy East environmental assessment. 

Under the current process, the NEB calculates emissions from construction and operation of the pipeline itself, and not emissions from oil producers or consumers. Once the NEB completes its review, the Canadian Environmental Assessment Agency (CEAA) then releases another report on upstream emissions, including extraction, processing and refining, which form part of the federal government's "new" approval process. 

The NEB had previously always maintained that upstream and downstream emissions, as well impacts on climate change in general, extend far beyond the scope of assessing the pipeline itself, which is just a mode of transportation. The regulator is now asking the public if they should consider:

  • impacts on Canada's total GHG emissions
  • potential changes to the amount of oil produced (upstream emissions)
  • potential changes to the amount of oil consumed (downstream emissions)

Upstream GHG emissions are already factored into approvals required for the production facility itself. As for downstream emissions, the world consumes about 95 million barrels of oil per day, regardless of where the oil is produced or how it's transported.

In addition, the NEB is also asking whether the "potential impacts that government GHG strategies, policies, laws, and regulations (including ceilings and pricing) may have on the availability of oil supply and markets underpinning the need for the Project and its economic and financial considerations."

Translation: If Alberta sticks to its 100 Mt/yr carbon limit, oil production will likely become capped by about 2025, eliminating the need for Energy East.

The public is being given to the end of May to submit comments to the NEB Hearing Panel.

Tanker ban moves closer to reality . . . 

The Federal Liberals have tabled a motion to ban tanker traffic on BC's northern coast as part of their $1.5 billion Oceans Protection Plan.

The ban would apply from the BC/Alaska border down to about Port Hardy. Kitimat would be included in the exclusion zone. The moratorium is specifically for crude oil and bunker fuels but not refined products, propane or LNG. The ban would be another "nail in the coffin" for the Northern Gateway Pipeline and make life difficult for any company planning to build an oil refinery in Kitimat.

Vessels carrying less than 12,500 tonnes of crude will be exempted in order to allow local communities and industries to continue to receive "critical supplies", including heating oil and marine fuel. There were a number of fuel spills reported along the northern coast last year, primarily from fuel barges and tugboats that travel inland. However, barges and tugboats are exempted from the ban. Tankers travelling to and from Alaska and Washington State must stay west of the existing Voluntary Tanker Exclusion Zone.

The federal government says it has "consulted extensively" with Indigenous groups and industry stakeholders in formalizing the moratorium. Prime Minister Trudeau made the BC tanker ban a key promise during the last federal election. Aboriginal Equity Partners (AEP), made up of 31 First Nations groups, have expressed disappointment over Trudeau's opposition to pipeline and tankers in northern BC. AEP own a 33% stake in the Northern Gateway Project.

BC Liberals win a (very) narrow victory . . .

The ruling BC Liberals managed to eek out a very narrow election victory this week, winning 43 seats, 1 seat short of a majority. The NDP took 41 seats while the Green Party improved considerably to 3 seats, giving the opposition parties a combined majority in the legislature. Absentee votes are still being counted. A final tally is expected on May 24.

Both the Greens and NDP are opposed to oil pipelines. The Green Party is also opposed to LNG. The NDP have waffled several times on the subject of LNG exports, trying not to offend private-sector unions in the province. Green Party leader Andrew Weaver notes his party is more closely aligned with the Liberals than the NDP on economic issues. 

Although many have expressed concern for the future of Kinder Morgan's Trans Mountain expansion, the project has already been approved by both levels of government and is unlikely to go back to the provincial legislature.

Note that the BC "Liberals" are far more "Conservative" (or right-leaning) than other Liberal governments in Canada, including the Federal Liberals. The BC Liberals have been in power since 2001. This is the province's first minority government in 65 years.

Other Canadian energy news . . . 

The Alberta government has launched a review of abandoned wells in the province. The province says it plans to work "with industry and experts to find ways to better protect Albertans and the environment by improving policies for managing old oil and gas facilities." Alberta currently has about 69,000 abandoned wells. By the end of March, the Orphan Well Association (OWA) had 2,084 orphaned wells going through the closure process (1,394 to be abandoned and 690 to be reclaimed). OWA closed just 185 wells last year.

Husky Energy has resumed remediation work for its 2016 spill into the North Saskatchewan River. About 1,400 barrels of crude and condensate were spilled from Husky's 16TAN pipeline, about 160 meters from the riverbank. This year's post-cleanup activities include assessing the shoreline and any impacts to vegetation and wildlife. The company took a $107 million charge for the spill, $88 million recovered through insurance. The Province of Saskatchewan says it sent Husky a "significant" invoice for the clean-up last February. 

Enbridge has launched a binding Open Season for its BC Pipeline T-South system for delivery of an additional 190 MMcf/day of natural gas from the Montney and Duvernay regions into the Huntington/Sumas market, along the Canada/US border. The upgrade is expected to cost about $1 billion. Subject to sufficient demand, the project could be brought into service by the end of 2020.

The Canadian Press is reporting that the Federal Liberals are set to impose an "Alberta-style" carbon tax on uncooperative provinces. The plan will likely include rebate cheques to low-income families and a redirection of funds to renewable energy projects. Provinces have been given until 2018 to come up with their own carbon tax regimes. Saskatchewan and Manitoba are two notable holdouts. Both have threatened to take the feds to court if a carbon levy is imposed.

EIA warning of rapid rise in global oil output . . . 

The US Energy Information Administration (EIA) is warning that production outside of OPEC is set to rise dramatically over the next few years.

Production out of the US is expected to rise from an average of about 9 million bbl/day in 2016 to 10 million bbl/day in 2018. The EIA warns that an extension of OPEC's production cuts will not be enough to offset expanding US output.

In addition to the US, Canada, Brazil and Kazakhstan plan to increase production over the next two years as several major projects come online. Expectations for increases in global liquids supply have been revised higher to 1.4 million bbl/day this year, and another 1.9 million increase next year.

Despite the OPEC cuts, the EIA estimates global petroleum stockpiles rose about 150 million barrels in 2016 and will rise another 70 million barrels this year. As production rises through 2018, global stockpiles are expected to add another 180 million barrels next year.

US pipeline protestors come up with a Plan B . . .

Now that the "new" US Administration has turned their backs on pipeline protestors, activists are now channeling their efforts towards banks that lend to the energy sector. 

A small group of pipeline protestors hijacked several Chase branches in Seattle, forcing the closure of several banks across the city. The protestors are trying to pull funding for TransCanada's Keystone XL and Kinder Morgan's Trans Mountain Expansion.

Greenpeace has had some success targeting banks, which are seen as being far more protective of their image then energy companies. Amsterdam-based ING Group sold its $120 million loan for the Dakota Access Pipeline last month.

Notable US energy news from the White House this week . . . 

President Trump and associates have once again delayed making any decisions on the Paris Climate Accord. The US Administration had promised to make a decision before the next G7 meeting in Sicily at the end of this month. The Paris deal was signed by President Obama in 2015 but never ratified by the Senate. It is therefore not legally binding, allowing the US to withdraw without penalty.

The US Senate also failed to pass a vote to repeal Obama's methane reduction initiatives. The regulations, passed last November, would require oil and gas operators to capture methane, rather than flaring it. Although the Republicans have a majority in the Senate, three Republican senators voted with Democrats to block the motion. The Interior Department says the methane reduction targets are too costly for energy companies and has vowed to review the regulations.

President Trump continues to cozy-up to China, no longer labeled a currency manipulator. The US and China signed a new trade pact that included exporting US-produced LNG to the Chinese. The US government has agreed to cap LNG exports to no more than 30% of total US output, ensuring domestic natural gas prices don't spin out of control. WoodMac calls the deal a win-win for both countries. Chinese LNG demand is expected to reach 75 million tonnes/year by 2030 (or 10 Bcf/day), potentially worth US$26 billion annually (at current LNG prices).

At the same time, the US Administration has appointed a new NAFTA negotiator, Robert Lighthizer. Lighthizer has been accused of being decidedly anti-trade and is thought to favour more protectionist policies. Still reeling from tariffs slapped on softwood lumber, both the BC and Federal Liberals are considering banning the export of thermal coal from BC's west coast. Thermal coal exports are already banned out of Washington State and Oregon, forcing about 10% of US coal exports through BC. If implemented, Alberta's coal exporters would be inadvertently caught in the cross-fire. BC's coking coal exports (used for steelmaking) would not be impacted.

Around the world this week . . . 

Petrobras is mulling the sale of its 100,000 bbl/day refinery in Pasadena, Texas. Petrobras' purchase of the refinery in 2006 is currently being investigated by federal prosecutors as part of a larger corruption scandal into bribes and kickbacks paid to the Brazilian oil major and government officials. Belgium's Transcor Astra Group purchased the refinery in 2005 for $42.5 million before selling it to Petrobras just one year later for US$1.2 billion.

Royal Dutch Shell is petitioning S&P Global Platts to change the Brent basket in light of declining production out of the North Sea. Shell would like to see other grades, including Russia's Urals crude, used as part of the Brent calculation. Brent currently consists of the Forties, Oseberg, Ekofisk and Brent Ninian crude streams. Platts has agreed to add Norway's Troll to the benchmark beginning in January 2018. About two-thirds of the world's crude is priced off the Brent benchmark.

Norway's oil ministry has approved development of its Oda oil field, located in the southern part of the Norwegian North Sea. Oda holds an estimated 48 million barrels of oil equivalent, weighted about 95% oil. Production is expected to begin in 2019 at a capacity of 35,000 bbl/day. The field will be operated by Centrica, who owns 40% stake in the field. Partners include Suncor Energy (30%), BP (15%) and Foroe Petroleum (15%).

The Caspian Pipeline Consortium (CPC) is on track to to expand its network by almost 50% this year in preparation for additional output from the Kashagan field. The system is expected to transport about 1.3 million bbl/day this year, connecting the Tengiz field in Kazakhstan to a marine terminal near Novorossiisk, Russia. CPC is the only private pipeline in Kazakhstan and Russia. The consortium is a joint venture between 11 companies including the governments of Russia (24%), Kazakhstan (19%) and Chevron (15%). This latest phase of expansion has an estimated price tag of US$5.4 billion.

The Saudi government is continuing their quest to find a suitable stock exchange to list its Saudi Aramco shares, planned for 2018. Most of the shares will be listed on Saudi stock exchange. The New York, London, Hong Kong, Singapore, Tokyo and Toronto exchanges have been courting company executives for the balance of the shares. Reuters speculates London and Hong Kong are currently the front-runners. The kingdom plans to IPO a 5% stake in the state-owned company, worth an estimated US$100 billion.

ExxonMobil has reportedly been in discussion with Brazil's Petrobras to help the country expand its oil production. The deal would give Exxon access to Brazil's oil fields and infrastructure, while allowing Petrobas to gain expertise in production, refining and distribution. Last December, Brazil signed a similar US$2.2 billion deal with France's Total. Petrobras declined to comment on the rumours but issued a statement noting that it is "constantly in touch with companies in the oil and gas sector to evaluate opportunities and share experience."

Unionized workers at ExxonMobil's Nigeria operation began strike action this week in protest of the firing of 150 employees last December. The union wants the workers to either be re-hired or given a "proper" severance package. Exxon says there is no impact to production. The Nigerian government is trying to mediate the conflict.

Sticking with the Exxon theme, the company also announced the purchase of a refinery and petrochemical plant owned by Jurong Aromatics (JAC) in Singapore. The plant will be integrated with Exxon's existing 592,000 bbl/day refining-petrochemical complex on Jurong Island. Once the transaction is completed, Exxon expects to produce more than 3.5 million tonnes/year of aromatics out of its Singapore operations. Financial terms of the deal were not disclosed but the Korea Herald estimates the purchase prices at about US$1.7 billion. The plant was completed in 2014 at a cost US$2.4 billion. JAC went into receivership a few years ago due to financial and technical difficulties.

The government of Tunisia has deployed the army to protect several industrial sites in the southern part of the country, including oil and gas facilities. Protestors are demanding more employment opportunities and revenue sharing. Tunisia produces about 44,000 bbl/day of oil. Operators in the region include Italy's ENI and Austrian firm OMV.

BP announced the production of gas from two fields in the West Nile Delta region of Egypt. The project was delivered eight months ahead of schedule and under budget. The total development includes 5 gas fields, expected to produce 1.5 Bcf/day by 2019. This is the second of seven major upstream projects coming online this year.

BP also announced the discovery of yet another major oil field, this time off the coast of Senegal. The Yakaar-1 exploration well is adjacent to other big finds offshore Senegal and Mauritania. BP says the discoveries "create the foundation" for the future construction of a major LNG hub in the area.



WEEKLY ENERGY STATISTICS

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

3,262k
-138k ▼ 4.1%
BBL/D CDN EXPORTS TO US
9,314k
+21k ▲ 0.2%
BBL/D US PROD'N
522.53M
-5.25M ▼ 1.0%
BBL US INVENTORIES
712
+9 ▲ 1.3%
US RIG COUNT
CHANGE WK/WK  

According to Statistics Canada, the country produced about 4.05 million bbl/day in February, a very close tie with November's record output of 4.05 million bbl/day.

The numbers of oil rig in service in the US rose for the 17th week in a row, now the highest since April 2015. Canada gained two rigs to a total of 29. Gas rigs fell by four to 55.

US natural gas inventories rose 45 Bcf last week, slightly less than expected.

In this month's Short-Term Energy Outlook, the Energy Information Administration (EIA) is forecasting US oil production will average 9.3 million bbl/day in 2017, rising to about 10 million in 2018. Production averaged 8.9 million bbl/day in 2016.

According to Reuters, US imports of crude from Venezuela rebounded slightly in April to 741,000 bbl/day, the highest since last November. About 25% of those imports were upgraded crude. The balance is mostly extra heavy oil diluted with naphtha. Venezuela accounts for about 9% of all US crude oil imports.

OPEC produced an estimated 29.674 million bbl/day in April, putting compliance at 111% last month. In their latest Monthly Oil Market Report, the cartel now expects world oil production to rise 950,000 bbl/day this year, 350,000 bbl/day higher than its previous forecast. 

OPEC warns there's way too much oil being produced and says that balancing the market would "require the collective efforts of all oil producers." The agency is also pleading with the US to reign-in production "not only for the benefit of the individual countries, but also for the general prosperity of the world economy."

Production from US shale is expected to increase by 600,000 bbl/day this year alone. The US is not able to place a "quota" on domestic production since crude is produced by private corporations, and not the state. 

Energy trader Vitol also warned energy markets this week that demand growth is not keeping up with increases in global oil output. The firm estimates demand growth is only 800,000 bbl/day this year, leaving oil markets with a larger surplus than initially planned. 

This week's other OPEC chatter . . . 

Saudi Arabia's oil minister Khalid-al Falih, says OPEC will do "whatever it takes" to rebalance the market, affirming suspicions the cartel's production quotas will be extended to the end of the year. Reuters is reporting that core-OPEC members are considering extending the cuts into the first quarter of 2018. Bloomberg is reporting some OPEC members are even considering deeper cuts to production quotas. An announcement is expected at the OPEC formal meeting on May 25.

Iran produced an estimated 4.4 million bbl/day in April and expects output to rise to 5 million by year end.

Libya's output was close to 800,000 bbl/day last month on the restarting of several production fields, including Al-Bayda, which had been closed for the past four years.

Shell is poised to restart its Trans Forcados oil export pipeline in Nigeria this week, which should see the country's production return to more normal levels. The pipeline was shutdown early in 2016 after being bombed by the Niger Delta Avengers.


WEEKLY MARKET SUMMARY

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

99.13
+0.60 ▲ 0.6%
USD INDEX
72.92
-0.01 ▼ 0.0%
CDN DOLLAR
2.33%
-0.03 ▼ 1.3%
US 10Y Bond
1.57%
+0.03 ▲ 1.9%
CDN 10Y Bond
CHANGE WK/WK  

Ratings agency Moody's Investor Services sounded the alarm this week on Canada's elevated debt-load, downgrading the country's big six banks. Moody's notes that "continued growth in Canadian consumer debt and elevated housing prices leaves consumers, and Canadian banks, more vulnerable to downside risks facing the Canadian economy than in the past."


OIL PRICES • WEEKLY CLOSE
Friday close, USD/bbl • data by CME Group

50.84
+1.74 ▲ 3.5%
BRENT USD/BBL
47.84
+1.62 ▲ 3.5%
WTI USD/BBL
45.07
+1.24 ▲ 2.8%
CDN LT USD/BBL
38.04
+1.33 ▲ 3.6%
WCS USD/BBL
CHANGE WK/WK  

The EIA is forecasting Brent prices to average US$53/bbl in 2017 this year, rising to US$57 in 2018. Both forecasts are US$1 lower than previous estimates. WTI is expected to trade at a US$2 discount to Brent in both 2017 and 2018.


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
TSX ENERGY STOCKS • WEEKLY CHANGE

Enbridge (ENB) reported a big Q1 earnings miss this week on insufficient demand for natural gas, blamed on a warner-than-normal winter: 

  • Adjusted earnings came in at $675 million last quarter while net earnings fell 47% to $638 million. Earnings included a one-time gain of $416 million on derivatives.
  • Once Enbridge's merger with Spectra is fully integrated, the company expects cash flow to increase to a range of $7.2 to $7.6 billion, up substantially from the $4.7 billion earned last year.
  • The company has about $13 billion in new growth projects coming online this year, including the Athabasca Twin pipeline, the Norlite diluent pipeline and the Jackfish Lake natural gas pipeline expansion. 

Enbridge President Al Monaco is confident the new Enbridge can boost its dividend 10-12% annually through 2024. Enbridge also says they remain open to acquiring more assets later this year.

Revenues at MEG Energy (MEG) almost doubled to $560 million in the first quarter: 

  • Net profits declined to just $1.6 million, including a $98 million gain booked on favourable foreign exchange. Excluding the forex gain, losses were less than analysts were expecting. 
  • Bitumen production increased almost 1% to 77,245 bbl/day.
  • The average realized price for bitumen rose to $37.93 in Q1, more than triple the same time last year.
  • Operating costs declined 1.2% to $8.43 per barrel, including energy costs.

MEG is on track to meet its annual production guidance of 80,000 to 82,000 bbl/day this year and hopes to exit 2017 at about 86,000 to 89,000 bbl/day. The company also says maintenance turnarounds are currently in progress at both Phase 1 and 2 of its Christina Lake in-situ facility.

Inter Pipeline (IPL) reported a net income of $140 million in Q1, a record quarter for the company. Funds from operations rose 33% to $247 million. Pipeline throughput volumes also reached a record 1,461,300 bbl/day for the quarter, driven by strong performance from its three oil sands pipelines (Cold Lake, Corridor and Polaris).

First quarter results were better than expected at Keyera (KEY). Net earnings were reported at $96 million, up from $70 million for the same time last year. The company says all three of its business segments are doing well, generating earnings of $148 million in Q1. Sales volumes rose 4% to 140,600 bbl/day.

Keyera (KEY) also announced a 6% dividend increase to $0.14 per share paid monthly.

Gibson (GIB) energy reported an unexpected loss of $9.9 million for the first quarter of this year, down from a profit of $35.6 million for the same time last year. Revenues rose 60% to $1.5 billion. The company is in the process of building two new 400,000 barrel tanks in Edmonton, and may add another two tanks if there's sufficient demand. Gibson also announced CEO Stewart Hanlon will retire next year.

Revenues at Bellatrix Exploration (BXE) were reported at $66 million in Q1, inline with analysts' expectations. Net profit for the quarter declined 30% to $13 million. The company produced 34,750 boe/day, an increase of 9% from the same time last year. Full year capital guidance was unchanged at $105 million while production is expected to average 34,500 boe/day.

Birchcliff Energy (BIR) reported record output of 42,000 boe/day in the first quarter. Revenues rose to $133 million, up from $58 million for the same time last year. The company expects to produce an average of 70,000 to 74,000 boe/day this year and hopes to exit 2017 closer to 80,000 bbl/day. Birchcliff has put its Charlie Lake light oil asset up for sale. Credit Suisse estimates the property to be worth just under $200 million.

Quarterly production at Peyto Exploration (PEY) averaged 101,000 boe/day in the first quarter. Funds from operations were reported at $139 million in Q1, roughly unchanged from last year. Capital spending is expected to average $550 to 600 million in 2017.

First quarter production at Trilogy Energy (TET) rose 11% y/y to about 25,100 boe/day. Funds from operations increased 67% to $36.4 million. Net income rose to $7.7 million for the quarter.

Ensign Energy Services (ESI) reported a 3% decline in revenues for the first quarter, falling to $251 million. Net losses totalled $24.6 million in Q1 as funds from operations declined 19% to about $45 million.

Camp-operator Black Diamond Group (BDI) reported a 28% decline in first quarter revenues, falling to $38.2 million. The decline was partly blamed on lower bookings in Northern Alberta. Net loss for Q1 were reported at $5.5 million, about double the same time last year.

This week's 52-week highs on the TSX include Paramount Resource (POU), Parkland Fuel (PKI) and Veresen (VSN).

NYSE ENERGY STOCKS • WEEKLY CHANGE

Houston-based Enbridge Energy Partners (EEP) reported a net income of US$65 million in the first quarter, down from $80 million for the same quarter last year. Higher volumes on its Mainline system and record performance for the Lakehead line offset weakness in the company's natural gas business and lower rates on the North Dakota system.

Spectra Energy Partners (SEP) reported a net income of US$317 million for the first quarter of 2017, up from US$298 for the same time last year. The company boosted its dividend 1.25% earlier this month (now US$2.805 per share annually), its 38th consecutive quarterly increase. SEP currently has US$4.4 billion in projects, currently under execution. The company expects to receive FERC approval for its NEXUS and TEAL pipelines sometime this year. The MLP is now an Enbridge company, operating more than 15,000 miles of pipelines, 170 Bcfof natural gas storage, and 5.6 million barrels of crude oil storage.

Revenues increased to US$6.6 billion at Tesoro (TSO), up from US$5.1 billion for the same time last year. Refinery utilization improved to 95% in Q1 while throughput averaged 825,000 bbl/day, up 5.5% from Q1/2016. Full year capital expenditures is expected to total US$1.1 billion this year.


UPGRADES & DOWNGRADES
  • ConocoPhilips (NYSE:COP): Downgraded from Buy to Neutral at Bank of America. 
  • Ensign Energy Services (TSX:ESI): Downgraded from Sector Perform to Underperform at Scotiabank. 
  • ExxonMobil (NYSE:XOM): Upgraded from Neutral to Buy at Bank of America. 
  • Imperial Oil (TSX:IMO): Upgraded from Sell to Hold at ValuEngine.
  • Marathon Oil (NYSE:MRO): Downgraded from Buy to Neutral at Bank of America.
  • Parkland Fuel (TSX:PKI): Upgraded from Sector Perform to Outperform at Scotiabank.
  • Raging River Exploration (TSX:RRX): Downgraded from Buy to Hold at Canaccord Genuity.

NEXT WEEK'S EVENTS

Monday:

  • President Trump meets with Abu Dhabi crown prince at the White House
  • Q1/2017 earnings results: Marquee Energy, RMP Energy, Storm Resources, Tamarack Valley Energy

Tuesday:

  • API Weekly Statistical Bulletin released @ 4:30pm ET
  • IEA Monthly Oil Market Report (May)

Wednesday:

Thursday:

Friday:

  • Baker-Hughes Rig Count released @ 1:00pm ET
  • April CPI released by StatsCan @ 8:30am ET
  • March Retail Trade data released by StatsCan @ 8:30am ET

Next edition of the Oil Sands Weekly: Friday May 19, 2017 @ 10pm MT.

The Oil Sands Weekly

The Oil Sands Weekly

The Oil Sands Weekly

The Oil Sands Weekly

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