I’ve owned Petrobank (PBEGF), a TSE oil junior, at $50, sold it as the market tanked, and over the past few months I’ve been buying it again in greater quantity in the teens.  It’s now just over $20.  I’ve been impressed with management’s apparent ability to successfully execute a standard “exploration and production” strategy as exemplified by its Bakken and it’s Columbian programs.  Beyond that, I’m fascinated with the huge speculative upside potential of the technologies it has developed for harvesting heavy oil more economically and environmentally.  

The stock may not …

[Read more →]

As the Globe and Mail reported today, the Alberta government has issued its first ever restriction on the amount of water that oil sands producers can withdraw from the Athabasca River.   I don’t know the extent to which this could limit production by the four companies that are impacted, which includes Canadian Oil Sands Trust (COSWF).  But it seems like a straw in the wind.   Such limits represent a risk to most oil sands producers and to the potential future rate of flow of oil from the oil sands.  …

[Read more →]

Suncor Energy CEO Predicts Failure of Some U.S. Oil Refiners By Joe Carroll Oct. 23 (Bloomberg) — Some U.S. refiners may be forced to shut plants and go out of business in coming months as declining demand aggravates narrowing fuel-production margins, said Suncor Energy Inc. Chief Executive Officer Rick George. U.S. oil refiners will also sell facilities, George said today during a conference call with investors and analysts. “There will be some real fire sales,” said George, who leads the world’s second-largest oil-sands …

[Read more →]

  Oil sands projects slashed as credit crisis hits Alberta NORVAL SCOTT From Friday’s Globe and Mail October 23, 2008 at 7:46 PM EDT CALGARY — — The full force of the global financial crisis has finally hit the oil sands, delaying two of Canada’s largest energy projects and tempering Alberta’s economic boom. Suncor Energy Inc. [SU-T] said Thursday that it is slashing its expected spending in 2009 by one-third because of uncertainty over oil prices and credit availability. Part of the reduction …

[Read more →]

A Financial Post article, below, reports that tightening credit conditions will force some Canadian companies to defer expansion plans, particularly in the oil sands.  There has been an expectation that the oil sands will add some 2 mb/d of capacity by 2015.   It appears such growth will be scaled back.  If oil prices go lower and stay low for a while the combined effect of that with credit restrictions may well result in the deferral of a number of megaprojects around the world.  The impact of such deferrals would …

[Read more →]

I recently discussed the reasoning behind my owning shares of PetroBank (PBEGF).   In a recent edition of Value Investor Insight, Passport Capital’s Laurance Narbut explicated the case more thoroughly.   The Long Case for Canada’s Petrobank by: Value Investor Insight posted on: September 29, 2008 | about stocks: PBEGF.PK   Why is Canada’s Petrobank [PBG:CN] one of your favorite energy bets? Laurance Narbut: The company is based in Calgary and has three primary areas of operation. The first is in the Bakken …

[Read more →]

I own shares of PetroBank (PBEGF) for two reasons.  First the company has been doing a credible job of buying and exploiting conventional oil and gas resources.  In Q2 it reported diluted EPS of $1.92 ($C) vs. $0.26 based on 23.9k boe production vs. 6.9k in Canada and Colombia.  Just based on those results, the companies $45 price per share seems well supported.  But the main reason I own the stock is that the company has developed two related new technologies for exploiting deep deposits of heavy oil and bitumen …

[Read more →]

I’m a rich environmentalist who thinks the green movement often goes too far.  So I’m happy to see that advocates for the poor are starting to put their oars in the water to limit the influence of the environmental lobby.  Clearly higher oil prices hurt the poor disproportionately.  Now the poor are fighting policies that may raise oil prices. Take ANWR as an example.  If there are any environmentalists who actually go to northern Alaska to enjoy the natural beauty, you can bet they are wealthy.  People living in the …

[Read more →]

Pipeline company Enbridge has announced significant progress toward linking Asian markets to Canadian oil sands producers.  A report from the Globe and Mail reproduced in part below states that financing for the pipeline is coming from both the oil producers and potential Asian buyers.  This is significant because market for Canadian oil sands producers have been limited to Canada or the U.S.  Some U.S. environmental lobbyists are pushing Congress to limit purchases of oil sands products by U.S. government entities which could  potentially reducing …

[Read more →]

A report in the Globe and Mail recently described how one of the environmental “problems” often cited by critics of oil sands has become a useful export for Suncor (SU), one of the largest oil sands producers.  The byproduct is coke, which has been stacked  like new mountains for some eventual low-value use like landfill.   Now it is being exported to China for real money.  

Let’s hope the Chinese can figure out a way to burn it while controlling the carbon dioxide emissions.  (Fat chance, I suppose.)  Well, at least this …

[Read more →]

The July 7, 2008 Oil and Gas Journal features several pieces on the Canadian oil sands.   I’m not going to attempt to summarize it all; much is technical information regarding the various ways to treat bitumen which is what you get out of oil sands before starting to refine it.   Interested persons can get a copy on line or by mail.

Let me simply summarize a few points that are relevant to  investors. 

  First, total Canadian oil sands production is expected to grow from the current 1.32 mb/d to 3.23 mb/d …

[Read more →]

Just a quick note that there are two potentially game changing technologies for extracting liquids from deep oil sands where mining is not appropriate.  The incumbent method, SAGD - steam assisted gravity drainage.  As the name describes it calls for burying two parallel pipes, heating a liquid in the top one which then heats the sand below it, which liquifies the bitumen in the sands which then drips into the lower pipe from which it is brought to the surface.   That requires a lot of natural gas for heating …

[Read more →]

I would direct you to the end of this fascinating interview with the CEO of Canadian Oil Sands Trust, the EIS portfolio’s largest single position.  In it he makes astoundingly positive assertions about both water use and land reclamation. Q&A with Marcel Coutu of Syncrude Q&A with Marcel Coutu of Syncrude by Peter McKenzie-Brown Syncrude’s Chairman of the Board delves into operations, the environment and the demise of oil around the world. This article appears in the July 2008 issue of Oilsands Review. Canadian Oil …

[Read more →]

The S.E.C. appears to be ready to issue long overdue changes to their regulations regarding the reporting of oil and gas reserves.  One of the major impacts will probably be the ability of oil sands to be counted as reserves, which would make such properties substantially more feasible for publicly traded major oil companies to acquire. SEC proposes new oil and gas reporting rules Fri Jun 27, 2008 10:36am BST WASHINGTON (Reuters) - Changes in the rules on how energy companies report their reserves, proposed by the U.S. Securities and …

[Read more →]

Canadian Oil Sand Trust (COS.WF) report of Q1 results demonstrates the power of higher oil prices to leverage its cash flow.  Based on an average WTI price of $97.82, up from $58.23 in 1Q07 (+68%), operating cash flow rocketed ahead 119%, to C$0.98 vs. C$0.42 per share despite plant outages that caused unit sales to fall by 9%.  

The company’s decision to boost its quarterly dividend by 33% to C$1.00 per share demonstrates its confidence in the continuation of strong cash flow.  Since the company cannot control the price of …

[Read more →]