Saskatchewan’s June Petroleum Rights Offering Generates Largest Revenue Since 2014

June’s Public Offering Generates Largest Revenue Since 2014

Released on June 8, 2017

oil pump jack

Driven by strong interest in an area prospective for heavy oil northeast of Lloydminster, June’s public offering of Crown petroleum and natural gas rights raised $22.8 million dollars on Tuesday—the largest revenue for a single public offering in almost three years.

The total for the 2017 fiscal year to date is $24 million after two sales.  The fiscal year’s current average price per hectare for Saskatchewan parcels is $828.81, almost double Alberta’s average of $470.71 for conventional oil and gas parcels, and comes in the wake of recent upward trends in provincial drilling activity.

“This is a significant revenue increase and the highest for any of Saskatchewan’s past public offerings since August 2014,” Energy and Resources Minister Dustin Duncan said.  “Some of the most dynamic opportunities in Saskatchewan are those in our oil and gas sector, backed up by a world-class supply chain and a global reputation among the industry for low-risk investment.”

Millennium Land Ltd. bid $4,002,780 to acquire a 1,327-hectare exploration licence located southwest of Midale.  The parcel is prospective for multiple targets, particularly the Bakken Formation and the Three Forks Group/Torquay Formation.

Two parcels northeast of Lloydminster in the St. Walburg area received bonus bids totalling $9,736,304.69 for 1,295 hectares, with one of these parcels receiving the highest dollar-per-hectare at $8,115.76; these parcels are prospective for heavy oil in the Mannville Group, with well logs showing significant potential for the application of thermal recovery methods.

The next public offering of petroleum and natural gas rights will be held on August 1, 2017.

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For more information, contact:

Deb Young
Economy
Regina
Phone: 306-787-4765
Email: deb.young@gov.sk.ca

 

 

 

Shore Gold confirms ‘preliminary’ deal negotiations as share price hits five-year high

Shore Gold confirms ‘preliminary’ deal negotiations as share price hits five-year high

ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: June 5, 2017 | Last Updated: June 5, 2017 4:53 PM CST

 shore-gold

Shore Gold Inc’s Star-Orion-South diamond property east of Prince Albert, Sask. SASKATOON

A Saskatoon-based diamond exploration and development company has confirmed it’s in “preliminary negotiations” with an unnamed third party about a transaction involving its mineral properties.

Shore Gold Inc. issued the statement Monday, a few days after speculation surrounding the unexpected cancellation of its annual meeting drove its share price to a five-year high of $0.435. Its share price last climbed above $0.40 in early 2012.

“No agreement has been reached and there is no assurance that these discussions will continue or that any transaction will be agreed upon,” Shore Gold said in a terse statement, which it said was issued in response to “recent trading activity” involving its shares.

“If the discussions result in agreement upon a transaction, of which there is no certainty at this time, an announcement will be disclosed in accordance with applicable legal and regulatory requirements,” the statement said.

Shore Gold announced last week that the meeting, which had been scheduled for June 30, would be held later in the year. The new date for the 2017 meeting has not been set “but it is anticipated that it will be set shortly,” the company said in a news release.

Ken MacNeill, the company’s president and CEO, said last week that the board decided “it’s the best thing for the corporation to hold it a little later.” MacNeill said he could not comment further as he cannot speak on behalf of the board of directors.

Shore Gold has been working to establish a $2.5 billion diamond mine on its Star-Orion property in the Fort à la Corne forest east of Prince Albert since 1995. Its updated feasibility study is expected to project a “significant” reduction in capital costs.

The postponement comes three months after the SGF Shareholders Association Inc., a group of Shore Gold investors concerned about the company’s direction and communications, said it planned to continue working to shake up its board of directors.

A controversial proxy vote at the company’s last annual meeting in June 2016 came within a few percentage points of unseating three of its directors. Shore Gold’s chairman deemed the vote illegal but allowed the results to stand.

Reached by phone, SGFSA spokesman David Wright said the association was not yet ready to comment on the meeting’s postponement.

 

 

 

SHORE GOLD RESPONDS TO RECENT TRADING ACTIVITY

Shore Gold

NEWS RELEASE

June 5, 2017

Stock Symbol: SGF:

 

TSX Saskatoon, Saskatchewan SHORE GOLD RESPONDS TO RECENT TRADING ACTIVITY Shore Gold Inc. (TSX:SGF) (“Shore”) today issued, at the request of IIROC, on behalf of the Toronto Stock Exchange, the following statement in response to the recent trading activity in its common shares:

Shore is engaged in preliminary discussions regarding a potential transaction with a third party involving an earn-in on Shore’s mineral properties. However, no agreement has been reached and there is no assurance that these discussions will continue or that any transaction will be agreed upon. Until such time as it is appropriate to make a public announcement on any potential transaction, should one occur, Shore Gold will not comment further on this matter. If the discussions result in agreement upon a transaction, of which there is no certainty at this time, an announcement will be disclosed in accordance with applicable legal and regulatory requirements.

Caution Regarding Forward-Looking Statements

This press release contains “forward-looking statements” and/or “forward-looking information” (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. All statements, other than statements of historical fact, are forward-looking statements. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expect”, “is expected”, “in order to”, “is focused on” (a future event), “estimates”, “intends”, “anticipates”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, or the negative connotation thereof. These forward-looking statements are based on Shore’s current beliefs as well as assumptions made by and information currently available to Shore. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements.

 

 

Coherence, not shouting, needed in Canadian energy discussion

Coherence, not shouting, needed in Canadian energy discussion

This is the text of a letter that will be sent to Prime Minister Justin Trudeau and all of Canada’s premiers and territorial leaders. It speaks to a special effort by the team at JWN Energy—a Calgary-based energy information company—to create a national platform via which all Canadians can access the important discussions we need to have about Canada’s energy future.

By Bill Whitelaw

June 5, 2017 5:06pm

http://www.jwnenergy.com/article/2017/6/coherence-not-shouting-needed-canadian-energy-discussion/

 Kinder Morgan pipe

Pipeline construction. Image: Kinder Morgan

 

Dear Prime Minister and Premiers:

Canadians want to talk about energy. More important, they need to talk about energy.

They want to be part of a civil society that shapes and defines its own future constructively and respectively.

But there’s nothing civil about the way we discuss energy currently. In fact, it’s more akin to thinly-disguised civil war.

Take the pipeline “debate.”

Look what’s happening in British Columbia. It’s shameful. A decision with the force of democracy behind it has been made—on a project that was thoroughly debated and is intensively regulated. And yet there are those who think they can undo it simply by disagreeing with the decision. That attitude flouts the way we do democracy in Canada and it sets us on a slippery slope.

So far, we should give ourselves a C-minus grade on how-to-get-along-on-things-energy report card. And that’s being generous.

Most Canadians also want a stop to the shouting and political backbiting around energy matters; an end to the activists who torture facts and figures until they scream false confessions. They want a stop to the pseudo-science that generates misleading headlines from a befuddled media and a stop to the belief we can flip a switch and be independent of petroleum in a heartbeat. No wonder they seem disinterested; who would really want to step into the mess we’ve made of our energy heritage.

In the oil and gas sector, we get that we have been part of the dialogue problem. We haven’t done a particularly good job talking to Canada. Oh, we shovel numbers and equations at Canadians that they know mean something, but it all somehow gets lost in translation. Put another way, we haven’t helped ordinary folks make meaning around the ways energy intersects and transects their lives.

We should be helping Canadians understand they actually own the hydrocarbon molecules we extract and process. Beyond what we take as profit, as a reward for risking capital, the rest of the proceeds go toward making Canada better. Health care. Education. Social welfare. Public infrastructure. These all come to mind, among many other benefits, that sometimes seem too countless to enumerate.

It’s a tough message, but we’re energy entitled in this country. As Canadians, we use (and even abuse) energy. As the oil and gas sector—as do our counterparts in other energy systems—we need to share with Canadians the realities of accountabilities and responsibilities of being so energy blessed; to recognize we live with an embarrassment of energy riches, but we’re also spending ourselves silly.

Instead, as a sector, we have focused on talking to elected officials, often convinced we need to do that because your ears are being bent by special interests who don’t get how important energy, in this case petroleum, is to the way we live as Canadians.

We get as a petroleum sector we need to improve our performance. And improving we are. We’re tackling air, water and land challenges with world-class technologies developed by some of the finest minds around. Often, we’re the envy of other jurisdictions globally for the way we innovate and the way we regulate.

We have great stories to tell. But we haven’t been very good storytellers. Nor have we been very good at earning trust.

All that means we’re at an energy crossroads in Canada. There are important choices we have to make collectively as Canadians—choices informed by balanced and rational dialogues unfiltered and unadulterated by the extremes of both ends of our energy continuum. There’s much about energy Canadians don’t know—much about how energy fuels so much of what we take for granted in our overall life quality.

So my company is stepping up.

At JWN Energy, we’re trying to make a difference. We’re not a big company. Many oil companies make more in an hour than we make in a year. But we’re passionate. And we know energy. We’re stepping up because no one else so far seems to be able to bring Canadians together through energy knowledge development, idea-sharing and working through challenges collaboratively.

We’re using our flagship brand, Oilweek, to create a national dialogue platform—one that embraces all forms of energy and welcomes all energy stakeholders. On this platform the hydro community will connect to the solar community; the nuclear folks to the petroleum people. We will discuss. We will debate. We will collaborate. And we will disagree.

Yes, we’re leaving Oilweek as the name. It’s a brand with value. And it stands for something. It stands for an energy sector that for more than a century has helped make Canada what it is; the reality is that a robust and evolving petroleum sector is still critical to Canada’s well-being domestically and internationally—and it will be so for a long time to come. If we don’t get the oil and gas conversation right, we will fail miserably as other forms of energy gain momentum as stable suppliers to Canadians.

For 75 years Oilweek has served, we think honourably, Canada’s upstream petroleum sector as a perspective platform. Now, as we turn 150 as a nation, this fall we are turning our attention to all forms of energy—and to all Canadians.

Our new positioning statement: Connecting Canadians to Their Energy.

There are no free energy rides. Sunbeams and wind gusts don’t pay royalties, but solar and wind and hydro and biomass have an important part to play in the way we shape our future. But as systems, they need to cohere and mature. Oil and gas is a mature energy system, both bruised and built by decades of experience. We will transition over time, and those other systems will come to play important roles in an evolving system of systems. But petroleum will remain a key driver of our economic and social foundations for a long time despite the noisy naysayers. People won’t drive electric cars on roads paved with charged particles but rather on asphalt derived from petroleum. That’s how a system of systems works.

We’re fragmented as an energy nation. At a time when we need coherence, we’re shouting at each other. The noise is deafening.

At Oilweek, we hope to be a stepping stone to the Canada that can be: one in which energy solidarity defines us as a nation.

 

 

 

K+S Potash, Ducks Unlimited in $2.8 million project to protect wetland in Saskatchewan

K+S Potash, Ducks Unlimited in $2.8 million project to protect wetland in Saskatchewan

K+S Potash

June 5, 2017

Mining.com

 

Regina, Sask. – K+S Potash Canada (KSPC) has committed over $2.8 million in funding for wetland conservation through an agreement with Ducks Unlimited Canada (DUC) to ensure wetlands affected by the Bethune mine are offset through the restoration and preservation of wetlands across Saskatchewan. The agreement, based on a unique science-based formula developed by Saskatchewan’s Ministry of Environment in collaboration with DUC and KSPC, is the largest-known wetland industry offset in Saskatchewan’s history.

“Wetlands are one of the most important eco-systems on the planet and provide critical habitat for migratory birds including waterfowl,” explains Trevor Plews, Head of Conservation Programs for DUC in Saskatchewan. “Wetlands have been in decline for many years and because Saskatchewan is in the heart of waterfowl breeding habitat in North America, this offset agreement goes a long way to help mitigate habitat loss in this very important region.”

KSPC’s offset agreement is the largest mitigation payment DUC has ever received in Saskatchewan and will enable DUC to invest in areas that provide the greatest conservation value possible. Direct and indirect impact on 199 acres of wetlands near the Bethune mine site will be offset by restoring 361 acres of wetlands in DUC’s target landscapes in Saskatchewan.

Eric Cline, Vice President of Land and Sustainable Development for KSPC, says the agreement satisfies the ministry’s condition for approval of KSPC’s Environmental Impact Statement and does so through a credible third party. “It’s of benefit to have Ducks Unlimited Canada facilitate this agreement because their interest is to maximize the amount of quality wetlands in Saskatchewan,” says Cline. “This partnership with DUC is valuable to our company not only because it ensures the offset meets our commitment to the ministry, but also because it assures the public that the conservation plan is being implemented in a scientific way.”

While this landmark initiative demonstrates the power of collaboration and responsible environmental management in the province, the ministry hopes that other industry players will benefit from this large-scale “test case” of their formula-based approach.

“The lessons learned from this experience will help us further improve and develop this promising approach,” said Brant Kirychuk, Executive Director of the ministry’s Fish, Wildlife and Lands Branch. “I would like to congratulate and thank K+S Potash Canada and Ducks Unlimited Canada for being leaders and innovators in our quest for responsible development.”

This historic announcement corresponds with this year’s World Environment Day which is themed “Connecting People to Nature,” a call to action for people to protect the Earth that we share. “Protecting the Earth is everyone’s responsibility,” says Michael Champion, Head of Industry and Government Relations at DUC, “and we want to recognize the efforts of KSPC in doing their part as a good corporate citizen.”

About K+S Potash Canada GP

K+S Potash Canada GP (KSPC) is a K+S Group company with headquarters in Saskatoon, Saskatchewan; a solution potash mine and production facility located near Moose Jaw, Saskatchewan; and a world-class potash handling and storage facility operated in partnership with Pacific Coast Terminals in Port Moody, British Columbia. Bethune mine, formerly known as the Legacy Project, is the first new potash mine in Saskatchewan in nearly fifty years. KSPC celebrated the Grand Opening of Bethune in May 2017 and expects to reach a production capacity of 2 million tonnes by the end of 2017. The Bethune mine has created new job opportunities for Saskatchewan workers and new business opportunities for Saskatchewan companies supplying goods and services to this major economic development. All sales and distribution of the potash produced at the Bethune mine will be carried out through the K+S Group’s experienced and well-established global distribution structures.

About Ducks Unlimited Canada

Ducks Unlimited Canada is the leader in wetland conservation. A registered charity, DUC partners with government, industry, non-profit organizations and landowners to conserve wetlands that are critical to waterfowl, wildlife and the environment.

 

 

 

BHP to grow potash business to size of iron ore — report

BHP to grow potash business to size of iron ore — report

Cecilia Jamasmie

June 5, 2017

Mining.com

jansen-shaft

BHP expects to complete the first phase for its massive Jansen potash mine by 2023.(Image courtesy of BHP)

 

BHP (ASX, NYSE:BHP) (LON:BLT), the world’s largest mining company by market capitalization, is considering to grow its potash business to the size of its iron ore division, but only under “certain circumstances.”

Speaking to Japanese newspaper The Nikkei, chief executive Andrew Mackenzie said that as part of the company’s recently announced restructuring, BHP expects to reinvest what it gets for its US shale gas assets into potash.

BHP is currently developing its Jansen potash mine in Canada, which would be the company’s biggest single investment ever.

The results of this strategy, however, won’t be immediate, he warned: “It’s taken us 50 years to create today’s iron ore business. It will be another 50 years to create a potash equivalent. So you have to start somewhere,” Mackenzie said.

And that starting place seems to be Canada’s Saskatchewan province, where the world’s third largest iron miner is currently building its massive Jansen potash mine.

To date, BHP has committed a total investment of $3.8 billion to move Jansen into production. From that total, $2.6 billion have been set aside for surface construction and the sinking of shafts, though analysts predict the total cost will be close to $14 billion.

Mackenzie said last month it was looking at a phased expansion of Jansen, which is projected to produce 8 million tonnes of potash a year or nearly 15% of the world’s total.

He added the company could seek approval from the board for such expansion as early as June 2018, with production beginning in 2023.

Prices for the crop fertilizer ingredient, however, are not favourable — they are still hovering around $230 a tonne, less than half what they were only five years ago.

Besides, BHP’s iron ore business brings in about $9 billion a year, which doesn’t look like an easy target to match by any other division, particularly by potash, given current prices.

But the company is looking long-term and has repeatedly stated it believes rising demand for fertilizer in growing nations, particularly China and India, will lead to a long-term price increase for the commodity.

 

 

 

 

Oil and gas drilling expected to come back with a vengeance

Drilling expected to come back with a vengeance

PSAC raises its 2017 drilling activity forecast by 60 per cent

BRIAN ZINCHUK/ PIPELINE NEWS
JUNE 2, 2017 09:34 AM
mark salkeld
Mark Salkeld   Photo By Brian Zinchuk

Calgary– The number of oil wells drilled is a leading indicator of the industry’s health as a whole, and on April 27, the Petroleum Services Association of Canada (PSAC) forecast a big improvement in the oil sector’s prognosis.

PSAC released its in its second update to the 2017 Canadian drilling activity forecast, one that now sees a 60 per cent uptick in expected activity.

The revised forecast of the number of wells drilled (rig released) across Canada for 2017 has shot up to 6,680 wells. This represents an increase of 2,505 wells and a 60 per cent increase from PSAC’s original 2017 drilling activity forecast released in early November 2016 of 4,175 wells rig released. PSAC based its updated 2017 forecast on average natural gas prices of $3.00 CDN/mcf (AECO), crude oil prices of US$52.50/barrel (WTI) and the Canada-US exchange rate averaging $0.74.

On a provincial basis for 2017, the revised forecast for Saskatchewan now sits at 2,670 wells compared to 1,940 wells in the original forecast, and Manitoba is forecasted to see 221 wells or a jump of 171 in well count for 2017. PSAC now estimates 3,320 wells to be drilled in Alberta, up from 1,900 wells in the original forecast. Approximately 60 per cent more wells are also expected to be drilled in British Columbia, with PSAC’s revised forecast now at 449 wells for the province up from 280 in the original forecast.

On April 28, PSAC president and CEO Mark Salkeld spoke to Pipeline News about the expected increase. He said, “When we did our original forecast back in November, we were still in the grasp of ‘lower for longer.’ We were only just kind of coming around to US$50 oil and realizing it might be here for a bit. We were reluctant to get too excited, so, based on the data we had for the first three quarters of 2016, that was where we were at – 4,000 (wells).

“Then we got the data for the fourth quarter of 2016, and there was a good uptick in that fourth quarter. Saskatchewan is just rocking it; Crescent Point, and their cookie cutter wells and stuff like that. So we thought we’d give it a 24 per cent increase and then we got our first quarter stuff in, and holy cow!

“What we saw was a couple of things driving it. There was confidence in US$50 oil. There were definite cost reductions on the part of the service sector, because they had no choice. Producers like Crescent Point and whatever sent form letters saying, ‘Reduce your cost by 30, 40, 50 per cent.

“The other thing was, because there wasn’t this high level of drilling activity, producers are looking to build their inventories again. It’s kind of an ideal situation where costs were down, they were reasonably confident in their prices, and they needed to get some production to service,” Salkeld said.

“In my mind, Crescent Point was the star player in all of this. They just developed that formula for easy to drill and complete wells, and to get production to surface quickly for good return. They went ahead with it.”

Their forecast does not look at specific company’s announced forecasts of their own work, but rather the broad spectrum.

Some companies are moving money out of the oilsands into the conventional side.

“The single biggest factor in all of this is the cost of services was reduced, significantly.”

Asked if that translates to service companies working for nothing and going broke along the way, he replied, “That’s exactly right. That’s been my soapbox rant over the last couple of years. The cost savings for producers have not been sustainable. We’ve seen companies go broke. We’ve seen consolidations, we’ve seen mergers and acquisitions, and that’s just expanding. We’ve got fewer service companies, but the ones that survived are bigger, some of them, but there’s lots gone.”

He noted that PSAC has lost about 100 members. Salkeld estimates that about a third have been through mergers and acquisitions, another third have chosen to prioritize their spending on something other than membership dues (like paying their staff and preparing equipment for work), and the last third are simply gone out of businesses.

“There are labour pressures. We started to see it right at the end of winter, here,” he noted. Some companies are now hiring green hands, having exhausted the labour pool.

“They put the people to work they kept on payroll, first off. They put the people to work, their ex-employees, laid off employees, they went back to work. And now they’re hiring. They’re hiring green, but there’s also a bit of scalping going on, encouraging crews from the competition to come across,” Salkeld said.

He saw it the most in fracking and cementing, which are holding job fairs. “They’ve got ads out, trying to hire like crazy.”

He noted those areas are seeing demand with respect to getting wells completed, and that those segments are starting to see a bit of a rate increase.

As for when oilfield services companies can start raising their rates, Salkeld noted some oil producers are willing to wait, or to tell an outfit that wants more an hour to go away and they’ll find someone they’re comfortable with.

“The rate increase, across the board, is going to take a couple years, I would say. The in-demand, critically-needed services are going to get something,” he said. That includes top-rated companies with squeaky-clean safety records.

“We’ve still got member-companies operating at cost, or at a loss, or waiting. The waiting period is when there’s enough critical mass, when there’s enough producers out there firing up rigs and crews to get commitments to have production going and wells spudded to qualify for permits, but we’re not there now.

“We’ll coast along this spring and summer, and we’ll start to see some pressures build up in the fourth quarter. The pressures will be labour and equipment recertifications. There’s lots of iron, rigs and frac spreads that are parked. The rigs need Level 4 (recertifications), the pumps and all the high-pressure equipment needs recertification. It all costs money.

“When all the available equipment has gone to work, and all the equipment against the fence has gone to work after some money is spent on it, that’s when the producers that need the services more and the services companies will get away with rate increased.”

All told, Salkeld said, “It’s good!” about finally having some good news, but he added there’s cautious optimism. This country still needs access to markets other than the United States, and that requires pipelines to tidewater. If the United States brings in a border adjustment tax on energy products, that will put even greater pressure on getting those export pipelines completed.

PSAC will be part of the Saskatchewan Oil and Gas Show again, held June 7-8 this year. “We’re coming down full force to host the barnstorming breakfast,” he said.

They will also have roundtable discussions with members.

Minister responds

In response to the revised forecast, Energy and Resources Minister Dustin Duncan said in a release on April 28, “This announcement is a clear sign of renewed operations in Saskatchewan, in part because of our province’s stable and competitive operating environment.

“After an extended period of cost management and reductions, this industry is showing us once again the kind of resiliency and efficiency that makes it one of our most dynamic economic sectors and a major contributor to Saskatchewan’s economic growth.”
© Copyright 2017 Pipeline News

– See more at: http://www.pipelinenews.ca/features/drilling-exploration/drilling-expected-to-come-back-with-a-vengeance-1.20321374#sthash.sOCM4xGM.dpuf

 

 

Junior oil and gas players go missing, not seen recovering any time soon

Junior oil and gas players go missing, not seen recovering any time soon

By The Canadian Press

June 5, 2017, 7:19 a.m.

Canada’s publicly traded junior oil and gas sector has shrunk to a shadow of its former self and isn’t seen recovering any time soon, hit by the combination of soft energy prices, disinterested investors and higher-cost projects that favour large companies.

The trend marks a significant shift for an industry in which these smaller players traditionally played an outsized role in discovering and developing new oil and gas pools, often becoming takeover targets that helped grow the reserves of their bigger rivals.

At the end of March there were just 25 publicly listed junior companies producing between 500 and 10,000 barrels of oil equivalent per day, well down from 94 in late 2007, according to Iradesso Communications.

The sector lost 17 publicly traded juniors in the past 30 months as benchmark U.S. oil prices fell from over US$100 to about half as much.

Try out the Daily Oil Bulletin’s data dashboards to visualize critical oil and gas information quickly and easily (e.g., reserves, spuds, oil and gas prices), and access the exclusive Canadian Oilsands Navigator.

“The kind of plays we’re doing now, the capital required for them is so huge,” said Brian McLachlan, CEO of junior Yoho Resources.

“You’d have to raise so much money as a tiny company to get in the game and, if you don’t have a really great currency, you’re just spinning your wheels.”

Yoho and two other small public companies—Trilogy Energy and Celtic Exploration—famously pooled resources in 2010 to drill one of the first Alberta Duvernay shale oil and gas wells using horizontal drilling and multi-stage hydraulic fracturing, the technology behind the boom in U.S. oil and gas production.

The productivity of the resulting well drew attention that helped Alberta boost proceeds from the auction of drilling rights to a record $3.5 billion in 2011.

But last fall Yoho departed public markets, selling itself for $31.5 million to private equity firm One Stone Energy Partners of New York.

“We took it private because there wasn’t a heck of a lot of support for a public company our size,” said McLachlan.

Veteran energy industry executives and observers said that experience is not uncommon.

Acumen Capital analyst Trevor Reynolds said the recent oil price crisis sent some debt-laden juniors into bankruptcy or forced sales. But many others, dismayed by share price erosion, have dumped their public listings in favour of private equity backing.

He noted a typical single Duvernay well costs $13 million to $14 million to drill and complete, an amount that could tie up a small firm’s entire annual exploration budget. Larger players have cut the average cost of a Duvernay well to $10 million or less by using manufacturing processes to drill and complete several wells at the same time, sometimes from a single well pad.

The going private trend shows no signs of slowing, according to ARC Financial Corp CEO Lauchlan Currie. ARC is one of Calgary’s largest private equity firms with $5.3 billion raised through eight funds.

“The public markets have moved upmarket to the larger companies, given the risk and lack of liquidity (of juniors),” he said.

Currie said ARC has backed eight new small producer or oilfield services companies in the past two years. He added it’s a good time to invest as share prices are low, oilfield services costs are coming down, and the exchange rate allows companies to pay costs in cheap Canadian dollars and sell their products in strong American dollars.

Aspenleaf Energy, backed by ARC and the Ontario Teachers’ Pension Plan, bought publicly traded junior Arcan Resources in June 2015 and is looking to grow from current production of about 4,000 barrels per day of light oil by buying more assets and companies.

“The general thinking now is you need to have a market cap in excess of a billion dollars (to survive),” said CEO Bryan Gould. “Typically, that means production of more than 10,000 barrels per day.”

© 2017 The Canadian Press

 

Enbridge eyes pipeline expansion after merger with Spectra Energy

Enbridge eyes pipeline expansion after merger with Spectra Energy

JEFF LEWIS

CALGARY — The Globe and Mail

Published Sunday, Jun. 04, 2017 4:06PM EDT

Last updated Sunday, Jun. 04, 2017 9:47PM EDT

 

Enbridge Inc. is mulling expansion of a major export pipeline, in the first sign of how the company plans to use its scale after a $37-billion merger with Spectra Energy Corp.

Chief executive officer Al Monaco said in an interview that the company is assessing a range of opportunities as it looks to integrate Spectra’s sprawling network of pipelines and processing infrastructure into its own operations. They include a possible expansion of the newly acquired Express pipeline from Alberta to Wyoming.

The potential for pipeline growth comes as oil sands production once again nears the upper limits of existing capacity, a situation analysts say will ultimately weigh on prices for the extra-heavy crude as producers pay more to ship barrels by train.

Enbridge currently transports the bulk of Alberta crude to U.S. markets along its 2.2-million-barrel-per-day mainline network, on which deliveries regularly get curtailed ‎during periods when demand to ship oil exceeds available space.

Though there are no firm plans to do so, Mr. Monaco said it’s possible the company could expand Express, which runs more than 1,250 kilometres from Hardisty, Alta., to Casper, Wyo., and has capacity of 280,000 barrels.

“We’re looking at that at the moment,” he said at the company’s Calgary headquarters. “Now that we’ve closed the deal, the first priority has been: Okay, how can we see how one and one equals more than two?

“We’ve got a major conduit with our mainline system. We’ve got another conduit now into the [Midwest] market. There may be some opportunities to optimize between the two, and so we’re thinking about ways that we can do that.”

Enbridge expects to offer more detail about integration and future growth opportunities at an investor day scheduled for Thursday in Toronto.

It is studying options as plans for new pipelines get bogged down by legal and political wrangling, with environmentalists and First Nations saying such projects will undercut efforts to reduce carbon emissions from Alberta’s energy sector.

Projects facing resistance include Enbridge’s Line 3 replacement, which the company has said won’t start up until 2019. The $7.5-billion project, approved last year by Prime Minister Justin Trudeau, would add 370,000 barrels per day of new capacity between Alberta and Superior, Wisc.

But it faces legal challenges from the Manitoba Métis Federation and the Association of Manitoba Chiefs, who are seeking to overturn federal approvals for the Canadian portion of the route. The project also needs final clearances from regulators in Minnesota.

Similarly, rival Kinder Morgan Inc.’s plan to nearly triple the flow of crude between Edmonton and the Pacific coast on its Trans Mountain pipeline has encountered new roadblocks.

The Houston-based company insists the $7.4-billion expansion will start up by 2020. But B.C.’s Green Party and New Democratic Party have pledged to kill it once they wrest power from the weakened Liberals, although it remains unclear exactly how.

Despite the political manoeuvring, Mr. Monaco said B.C. remains a promising region for natural-gas growth.

Enbridge now has a bigger footprint in the key Montney exploration zone, where producers have been hampered by weak prices and pipeline constraints, stoking demand for new services.

The company is currently testing shipper interest for a possible expansion of the B.C.-to-Chicago Alliance pipeline system, in which it owns a 50-per-cent stake. Mr. Monaco also said major liquefied natural-gas projects will eventually be built on the northern coast, even though proponents have put off investments.

“I think everybody focuses on short-term natural-gas prices, but the reality is the cost of finding and developing natural gas in B.C. and Alberta is very, very low,” he said, making global LNG exports more appealing.

“There’s so much gas being produced into the Alberta market. Producers, I think, have come to the conclusion that it needs to go elsewhere.”

 

 

 

Sask. mining rescue crews showcase emergency response skills

Sask. mining rescue crews showcase emergency response skills

By Rebekah Lesko

Global News

June 4, 2017

SMA mine rescue 2017

Mining rescue crews from across the province showcased their skills at the Saskatchewan Mine Rescue Skills Competition.

Mining crews from across Saskatchewan came to Saskatoon to show off their emergency response skills.

Teams from potash, coal, uranium and gold mines showcased their rescue skills in simulated scenarios.

If anyone knows how important emergency response training is, it’s Rod Greve.

Greve worked at the Lanigan potash mine for over 40 years and said they are there to help their fellow miners should the need ever arise.

“They want someone to be trained. It’s a highly dedicated group of people from all the mines that get together here,” said GREVE, who is a judge at the 49th annual Saskatchewan Mine Rescue Skills Competition.

“This training improves our community, our teams, our co-workers, everyone benefits from it.”

From fire, to first aid, the competition tests miner’s skills for future emergencies, skills that are even more important in remote regions.

“We need to have to have our own emergency response teams available because resources aren’t available like medical aid or ambulances and fire trucks, we don’t have the communities right next to us,” Camille Pouteaux, a Cameco Key Lake team member, said.

“Having the ability to offer rescue services at the sites are very important.”

 

 

 

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