Jump to content

Canadian Junior Oil co's & Drillers - Disappearing fast


Recommended Posts

Canadian Junior Oil co's & Drillers - Disappearing fast

 

A Majority Of Canada's Junior Oil And Gas Companies Have Disappeared
Updated 06/05/2017
X

CALGARY — 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.

o-ALBERTA-OIL-SANDS-570.jpg?16

Alberta's Athabasca river running through the oilsands.

 

"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.

 

Some companies go under, others exit public trading

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.

o-ALBERTA-OIL-REFINERY-570.jpg?16

The Suncor refinery in Edmonton.

 

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.''

 

=====

Top 10 Ca Oilcos : https://en.wikipedia.org/wiki/Canadian_petroleum_companies

Top CA Drillers -- : http://poim.ca/canadian-oil-gas-companies/

Link to comment
Share on other sites

DRILLERS

 

Mark Salkeld, chief executive of the industry group, said drillers, frackers and other oilfield service companies remain “cautious” about whether oil and gas producers will continue with their spending plans for the rest of 2017 while oil prices skirt the US$50 mark.

“Cost-cutting, confidence in oil prices, technology, that’s what’s helped us stay active,” Salkeld said.

Despite the optimism, drilling activity is expected to be far short of levels reached in pre-recession 2014, when 11,200 wells were drilled. Citing opposition to mega-energy projects and ongoing challenges to send Canadian oil and gas to overseas markets, Salkeld said a return to an era similar to the pre-recession boom may be out of reach.

Calgary-based Precision Drilling Corp. reported this week that 51 of its rigs were operating, outpacing last year’s activity levels but still short of earlier expectations.

During the three months ended June 30, Canada’s largest driller had an average of 29 rigs active in the country, well above year-ago levels of 13 active rigs.

The second quarter generally marks a seasonal slowdown in oil and gas drilling in Canada, when softer ground can prevent movement of heavy equipment into remote areas.

==

> more: Aug. 2, 2017: http://www.stormholdenergy.ca/code-of-ethics/oil-gas-focus/

 

US: in the Energy Investing 101 series: Big Oil : Offshore Rig Companies :

Link to comment
Share on other sites

Canadian Junior Oil co's & Drillers - Disappearing fast

 

A Majority Of Canada's Junior Oil And Gas Companies Have Disappeared

Updated 06/05/2017

 

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

 

Some companies go under, others exit public trading

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

 

"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.''

 

 

Efficient markets, Survival of the fittest.

Link to comment
Share on other sites

Top Canadian Drilling Companies

 

COMPANY NAME------ : Price : PE : Yield : WEBSITE

1 SU.t / Suncor Energy : C$42.20 : 25.8 : 3.04% : www.suncor.com

YfMjqw3.gif

 

2 PD.t / Precision Drilling: C$3.23 : -n/a : -- n/a - : www.precisiondrilling.com

TvZ38rd.gif

 

3 ESI.t/ Ensign Energy : C$06.58 : -n/a : 7.29% : http://www.ensignenergy.com

Z32sw6Q.gif

 

4 TDG.t Trinidad Drilling: C$01.66 : -n/a : - n/a - : www.trinidaddrilling.com

hVQBoLL.gif

 

5 Private/ Savanna Energy Services Corp. www.savannaenergy.com

6 NBR / Nabors Canada www.nabors.com

7 cnooc / Nexen Inc. www.nexeninc.com

 

8 AKT.b / AKITA Drilling : C$07.18 : -n/a : 4.74% : www.akita-drilling.com

YQwPuQG.gif

 

9 priv.? / Calmena Energy Services Inc www.calmena.com

10 TDG.t / CanElson Drilling Inc www.canelsondrilling.com (merged into TDG.t ?)

==

> the remainder of the 25 top co's: http://poim.ca/canadian-oil-gas-companies/

Link to comment
Share on other sites

COMPANY NAME------ : Price : PE : Yield : WEBSITE

 

11 ???? / Groundforce GeoDrilling Solutions Inc www.groundforcedrilling.com

12 SLB / Xtreme Drilling and Coil Services Corp www.xtremecoil.com

13 priv.? / Jomax Drilling www.jomax.ca

 

14 CWC.t / CWC Well Svc. : C$0.205 : -n/a : 4.88% www.cawsc.com

iaC6jPp.gif

 

15 PTEN / Patterson-UTI Drilling : C$00.00 : 00.0 : 0.00% : www.patenergy.com

T0qx5nx.gif

 

16 Komat Drilling Ltd www.komatdrilling.com

14 CWC.t / CWC Well Svc. : C$00.00 : 00.0 : 0.00%

17 Beaver Drilling Ltd www.beaverdrilling.com

18 Bonanza Drilling Inc www.bonanzadrilling.ca

19 Ironhand Drilling Inc www.ironhanddrilling.com

20 Horizon Drilling Inc www.horizon-drilling.com

21 Gridiron Drilling Services Inc www.gridiron.ca

22 Partner Drilling Ltd www.explorationdrilling.net

23 Calibre Drilling Ltd www.calibredrilling.com

24 Chinook Directional Services www.chinookdrilling.ca

25 Predator Drilling Inc www.predatordrilling.com

Link to comment
Share on other sites

  • 2 weeks later...

U.S. Deepwater Offshore Oil Industry Trainwreck Approaching

 

TRANSOCEAN-Ultra-Deepwater-Rigs-Utilizat

The U.S. Deepwater Offshore Oil Industry is a trainwreck in the making. The low oil price continues to sack an industry which was booming just a few short years ago. The days of spending billions of dollars to find and produce some of the most technically challenging deep-water oil deposits may be coming to an end sooner then the market realizes.

Drilling activity in the Gulf of Mexico hit a peak in 2013 when the price of oil was over $100 a barrel. However, the current number of rigs drilling in the Gulf of Mexico has fallen to only 37% of what it was in 2013. This is undoubtedly bad news for an industry that fetches upward of $600,000 a day for leasing these massive ultra-deepwater rigs.

One of the largest offshore drilling rig companies in the world is Transocean, headquartered in Switzerland. They lease ultra-deepwater rigs all over the globe. When the industry was still strong in 2014, nearly half of Transocean’s fleet of 27 ultra-deepwater rigs were leased in the Gulf of Mexico. Even though Transocean was quite busy that year, its ultra-deepwater rig utilization was 89% during the first half of 2014, down from an impressive 95% in 1H 2013.

The term utilization represents the total number of working rigs in the fleet. So, in 2013, Transocean had 95% of its rigs busy drilling oil wells. But if we look at the following chart, we can see the disaster that has taken place at Transocean since the oil price fell by more than 50%:

https://srsroccoreport.com/u-s-deep-water-offshore-oil-industry-trainwreck-approaching/

Link to comment
Share on other sites

  • 5 weeks later...

Yeah but...

$45 looks like a pretty good level to Buy SU.t puts.

Link to comment
Share on other sites

  • 11 months later...

Eric Nuttall's Top Picks: Nov. 16, 2018

Canadian Oil Picks ... update : w/SGY :

AtKKuwm.gif

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners
Focus: Energy stocks

MARKET OUTLOOK

In the past month, sentiment in the energy market has taken a U-turn which has resulted in the price of oil collapsing by over $20 per barrel, enduring the longest streak of sequential down-days in history (12 days). Echoes of “$100 oil in 2019” still rang when new narratives of “demand destruction due to trade wars” and “ineffective Iranian trade sanctions” began to take hold. Even one CNBC market commentator has proclaimed that oil could fall to as low as $40. The rate of change in sentiment has been truly incredible: how did the market swing from universal bullishness to the current level of bearishness in just over a month? How could the financial demand for oil fall so sharply while the physical demand continued to grow, remaining at its highest level in history? How could stocks basically flatline with oil rallying by 25 per cent from January to October and then get smashed by 30 to 50 per cent when oil fell?

From our observation, two major events led to the collapse in the oil price over the past month:

  1. Ongoing trade war escalations by Trump increased fears of slowing global growth and with it concerns that oil demand growth was about to fall.
  2. The U.S. issued Iranian import waivers to eight countries and this was perceived as a softening in Trump’s stance towards Iran. OPEC+Russia have already increased production by about 1.5 million barrels per day from the May 2018 lows, largely in anticipation of steep Iranian export declines. What happens if Iranian exports don’t fall as much as expected?

There’s also likely been forced unwinding by a U.S.-based commodity trading fund of a short-natural-gas/long-WTI trade and a notable increase in crude futures selling by financial houses that had hedged producers’ output. These factors have exacerbated the oil price fall, perhaps explaining as much as $10 of the $20 decline in crude. While fundamentals definitely loosened over the past several months, they can’t explain a $20 decline. Our sources tell us that Saudi Arabia now feels completely bamboozled by Trump and will champion a larger-than-expected production cut (1.4 million barrels per day or more) at the next OPEC meeting on Dec. 6. OPEC has recently said they will do “whatever it takes” to restore balance and we believe them. Our view that oil is in a multi-year bull market is unchanged. We believe WTI will average about $70 per barrel in 2019 and that it could trade to $100 more in 2020 based on the exhaustion of OPEC spare capacity and non-OPEC/U.S. production entering into a multi-year decline due to chronic underinvestment on long-lead projects.

On Canada, we believe that the combination of shut-ins (over 120,000 barrels per day), crude-by-rail ramping to 455,000 barrels per day by Q3/19, and Line 3 coming online by the end of 2019 will lead to WCS differentials falling to rail economics ($20 to $25 per barrel) by Q3/19. While Canadian light oil midcaps will struggle to attract investment versus Permian peers, Canadian heavy oil companies whose cash flow can double or triple based on a compressing WCS differential will attract fund flows and experience outsized returns.

(Previous):

Eric Nuttall webinar September 24 2018

Eric discusses why oil is in a multi-year bull market and likely to trade at $80+/bbl in 2019 and over $100/bbl in 2020+.

His Picks

Athabasca Oil / ATH.t ... All-Data : All-Log : 5-yr :

HrMNekq.gif

Baytex Energy / BTE.t ... All-Data :

SEEeATe.gif

Cardinal Energy / CJ.t ... All-Data :

FdMUlJE.gif

Cenovus Energy / CVE.t ... All-Data :

vwyg7L3.gif

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...