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Canadian Junior Oil co's & Drillers - Disappearing fast

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Canadian Junior Oil co's & Drillers - Disappearing fast

 

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

 

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

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

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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 :

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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.

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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

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

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

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

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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

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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/

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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

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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

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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/

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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

 

Suncor have been so resilient in the face of the slump.

 

Checked their recent news releases and can see why they remain a “steady Eddie” stock.

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Yeah but...

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

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