Archive for Calgary
In the Good Friday edition of the Globe and Mail, the Report on Business section had an article on Total SA and it’s sale and writedown of its portion of the now suspended Voyageur Upgrader project.
Attached to the story was an interesting graphic on the five operating upgraders in Alberta.
Technical full load output is 1.1 million barrels per day. (bpd)
Total actual output is estimated at 900,000 barrels per day.
Total Oilsands production was 1.8 million bpd in 2012 and is expected to be over 2 million bpd in 2013.
On the other side – Alberta currently has only three refineries.
The Strathcona refinery
Daily capacity – 187,000 bpd
The Scotford refinery
Daily capacity – 100,000 bpd
The Suncor Edmonton refinery
Daily capacity – 135,000 bpd
Current total is 422,000 bpd.
A fourth refinery will be the North West Redwater project, phase one will be 50,000 bpd. All three phases are 50,000 bpd each.
Alberta needs both, more upgraders and more refineries. I would support government “creativity” in helping make this happen.
When everything works, life is great. When it doesn’t, things get rather frustrating.
I’ve been having trouble for the last week. I believe it started with an update of the W3 Total Cache.
Tonight, I decided to try deleting the W3 Total Cache,
…and life seems to be good, very good again.
As I have stated previously, I like high yields and it’s a bonus if they pay monthly.
Based on a stock price of $2.35, the annual yield would be 9.8%. On Tuesday, Renegade closed at $2.17.
An article in Tuesday’s Financial Post discusses Renegade and a few other companies moving towards paying monthly dividends.
Canadian junior oil and gas companies seem to be reinventing their business plans in order to once again gain access to capital after three producers last week announced they will switch to an income-and-growth model not unlike the former income trusts that dominate the larger-sized intermediate exploration and production companies.
Pinecrest Energy Inc. and Spartan Oil Corp. announced their intent to merge and institute a dividend of approximately 8%, while Whitecap Resources Inc. announced plans to implement a monthly dividend early next year that will yield about 7%.
The announcements come after two others — Twin Butte Energy Ltd. in 2011 and Renegade Petroleum Ltd. earlier this year — also converted into yield-and-growth companies.
A great starting point is to look at a company’s payout ratio, which represents its ability to pay a dividend over the longer term. This is done by taking the planned dividend payment and capital expenditures and dividing by estimated cash flow.
Anything more than 100% means the company will be using debt to pay its dividend to investors. Interestingly, the intermediates on average have had payout ratios above 100% since the federal government’s decision to tax income trusts back in 2006.
We also recommend looking at a company’s balance sheet strength, capital efficiencies, production decline rates, netbacks and hedging activity.
The greater the decline rate and the weaker the capital efficiency, the more money required to maintain production rates, cash flow and, subsequently, the dividend. In addition, the stronger the netback (lower cost structure and higher priced commodities), the easier it is to generate free cash flow and sustain the dividend.
A strong balance sheet also affords a company time to meet its objectives without having to immediately cut its dividend. Finally, commodity hedging is important to minimize the risk of diminished cash flow from a correction in oil and/or natural gas prices.
In conclusion, we think this could end up being a win-win scenario for the sector, because junior producers may now have the option of either growing into dividend companies and raising capital as part of that plan, or selling out to an existing dividend-paying junior producer.
Twin Butte Energy closed Tuesday at $2.80 and a yield of 6.86%
Whitecap closed Tuesday at $8.48. The yield will be around 7%.
Pinecrest closed Tuesday at $1.66. The announcement had a yield of around 8.3% based on a $1.87 stock price.
Just as a I started writing this post, I saw that Pinecrest was downgraded a bit by an analyst.
CIBC World Markets Inc. analyst Adam Gill downgraded his rating of Pinecrest Energy Inc. (CVE: PRY) to “sector performer” from “sector outperformer” and cut his price target to $2 from $2.75.
As was announced last week, Pinecrest and Spartan will merge to form a dividend-paying corporation, Gill noted. The company is expected to keep production flat in 2013 and plans to pay an annual dividend of $0.155 per Pinecrest share, or an 8.7 percent yield for the next applicable 12 months (8.0 percent for 2013).
Overall, the analyst believes that the dividend model makes sense in this sideways commodity price environment, but believes that there are a few issues that make Pinecrest’s model a little more risky than he would like, notably the very high corporate decline rate.
Based on Gill’s estimate, he believes that in order to keep production flat around 9,250 Boe/d, the company will need to invest $165 million (versus management expectations of $130 million), leading to a total payout ratio of 149 percent. This is due to his higher assumed decline and capital efficiency assumptions.
In conjunction with the analyst’s higher-than-group average payout ratio and the steep decline, his net asset value decreases. Lower growth is the main driver of his price target reduction.
Even before this news, I was thinking that Renegade, Twin Butte and Whitecap would be my first choices for consideration.
Calgary’s West LRT line opens on December 12, 2012.
Here’s a preview ride from 69th Street Station to Sunalta Station on the edge of downtown.
West LRT has a bit of everything – featuring a minimal number of level crossings, it’s elevated, underground and open trench.
A snowy lead-in to Remembrance Day and playoff football for both the Calgary Dinos Saturday, winning 38-14 over the Regina Rams and for the Calgary Stampeders Sunday defeating the Saskatchewan Roughriders 36-30.
Back in 2000, Calgary had the Udderly Art extravaganza. The Legacy Pasture is located on the +15 level of the Centennial Parkade downtown on the north side of 9th Avenue between 5th and 6th Streets.
A new Agriculture building is set to open at the Stampede Grounds in 2014. It might be a nice idea to have another Udderly Art event to match this building opening in 2014.
Agriculture, the heart of the Calgary Stampede, will be year-round in just a couple of years at the Agrium Western Event Centre.
At a sod-turning celebration in Stampede Park Sunday morning, (July 8th, 2012) officials announced construction on the facility is set to begin.
The $42.6 million centre, planned to open in 2014, is a partnership with federal and provincial government with each committing up to $25 million, as well as private partnerships.
At 150,000 sq. ft., the centre will be the largest of its kind in Canada, and is being touted as one of the most significant infrastructure projects in Stampede History.
Chocolate Whiskey Truffle Cake from Decadent Desserts.
The texture of a Belgium truffle with ground hazelnuts and a shot of whiskey. And it’s flourless
Probably the biggest weather threats in Calgary are big wind storms and big hail storms.
Another hail storm swept through Calgary Sunday night. It seems to have been a NW – SE arc and luckily for me here in the SE, we were down to the smaller sized hail.
We do get the opportunity for some incredible photographs though.
July in Calgary has featured a lot of hot weather which leads to a hot house and saps my energy.
July has also featured a fair bit of time playing the Gods & Kings expansion of Civilization V.
Boudicca, the leader of the Celts has become a favourite of mine.