Many American oil and gas investors are probably familiar with the major large and small cap players in the Bakken formation in North Dakota and Montana, but few American investors are probably familiar with the active players further to the north in the oil and gas rich Canadian provinces of Saskatchewan and Alberta with small cap stocks like Alexander Energy Ltd (CVE: ALX), Renegade Petroleum Ltd (CVE: RPL) and Centor Energy Inc (OTCBB: CNTO) along with large cap Suncor Energy Inc (NYSE: SU) being among those pumping out their share of noteworthy news lately. I should point out that Canada’s oil reserves are ranked #3 after to Venezuela and Saudi Arabia with over 95% of these reserves being the controversial oil sands of Alberta while the neighboring province of Saskatchewan (which the Bakken formation actually stretches into) along with offshore areas of Newfoundland also containing substantial production and reserves. Moreover and excluding the oil sands, Alberta would have 39% of Canada’s remaining conventional oil reserves, followed by offshore Newfoundland with 28% and Saskatchewan with 27%.
Keeping all that in mind, here is a look at some news being pumped out by some small cap Saskatchewan or Alberta oil and gas stocks along with some important industry news:
- Record Year in the Saskatchewan Oil Patches. The Saskatchewan government said that last year was a record-setting year for the province’s oil patch as oil production hit a new record of 177.9 million barrels or 487,400 barrels per day last year – up from a previous record of 172.9 million barrels or 472,500 barrels per day set in 2012. In addition, Saskatchewan set a new record for drilling activity, with 2,433 horizontal oil wells drilled last year which surpassed the previous record of 2,036 horizontal oil wells drilled in 2012 with the Lloydminster and Kindersley-Kerrobert areas accounting for almost two-thirds of all 2013 drilling.
- Are the Environmental Health Risks of Oil Sands Underestimated? A new study by the University of Toronto’s environmental chemistry research group has supposedly found that the environmental health risks of oil sands has been underestimated. The group used computer models to study emissions estimates from environmental reports to predict chemical concentrations from direct oil sands industrial activity (e.g. mining, processing and vehicle traffic) and found the levels were lower than actually measured levels of chemicals in the air recorded in other scientific studies. The researchers then modified the computer model to factor in estimates of evaporation from oil sands tailing ponds with the results suggesting emissions may be two to three times higher than the estimates recorded in project environmental reviews – giving more fuel to oil sand critics.
- Suncor Energy Swings Into Profit Thanks to Oil Sands Projects in Northern Alberta. At the beginning of the week, large cap Suncor Energy (which is also Canada’s largest integrated oil company) said fourth quarter net income came in at C$443 million verses a net loss of C$574 million. However and despite record oil sands production, results missed expectations (largely due to a third-party natural gas pipeline outage at its oil sands operations in northern Alberta that cut production 15,000 barrels a day) and the company cut its outlook for production this year due to lower projected output overseas. Suncor Energy is down around 8.3% over the past year and up 51.5% over the past five years.
- Alexander Energy Completes an Asset Acquisition. Calgary based and TSX Venture Exchange listed small cap Alexander Energy has completed the acquisition of certain assets located in southeast Saskatchewan that was already announced on December 18, 2013. The assets were acquired for $32.5 million with an effective date of December 1, 2013 while Alexander Energy itself now has positive working capital of approximately $61 million and a predominately light oil production base of approximately 950 boe/d. More importantly, Alexander Energy has numerous growth opportunities across central Alberta and southeast Saskatchewan. For investors though, Alexander Energy is up some 233% over the past year and up 250% over the past five years.
- Renegade Petroleum Settles a Messy Proxy Fight and Could Be For Sale. At the beginning of last week, small cap Renegade Petroleum announced a decisive victory over hedge fund FrontFour Capital Group LLC who withdrew their requisition for a special meeting of shareholders that had been scheduled for January 28, 2014 to meet their demands. According to the Calgary Herald, the hedge fund is based in Connecticut but managed by Zachary George, the son of former Suncor Energy Inc. CEO Rick George, whose Novo Investment Group supported the dissident proxy battle. Renegade Petroleum has since set a 2014 budget that analysts say is conservative and could be setting the company up for a possible corporate sale. Renegade Petroleum is down 62.4% over the past year and down 11% over the past five years.
- Centor Energy Inc. Focused on world class oil shale resources in Pasquia Hills, Saskatchewan, small cap Centor Energy has just announced that has executed a $1.25 million loan agreement with a private lender Fortuitus Investments, Inc that will be used to complete the pending acquisition of the 55% working interest in the Pasquia Hills Oil Shale Project scheduled for February 16, 2014 as well as to complete a feasibility study to determine economic criteria for commerciality and refine an operational plan to extract the oil shale resource. As noted in a recent shareholder update, Centor Energy is close to closing a deal on a 55% interest in two leases (SHA0011 and SHA0013) comprising of 21,658 acres and potentially over 1.1 billion barrels of recoverable oil while Hatch Ltd., a leading global engineering consulting firm, has commenced an independent feasibility study to determine the economic criteria for commerciality. Centor Energy is up 120% over the past year.
Source: Smallcap Network