Canada’s biggest energy companies are quietly boosting their natural gas holdings, with EnCana and Canadian Natural Resources snapping up properties at a time when the commodity
EnCana, focusing on unconventional gas plays after spinning out its heavy oil holdings last year, revealed on Friday that it built a sizable 250,000 acre holding in an area of Michigan known as the Collingwood shale play. A promising, 9,500 foot-deep exploration well has been drilled. BMO Nesbitt Burns analyst Randy Ollenberger said in a report on Friday that EnCana’s average acquisition cost of $150 an acre is well below the price that rivals have paid on eastern U.S. shale plays.
Over at Canadian Natural Resources - a company commonly known by its stock symbol, CNQ - investors found out late Thursday that their company dropped a total of $1-billion in the past three months to buy a raft of natural gas properties near its existing holdings in B.C. and Alberta.
The news came with the release of quarterly earnings, and in CNQ’s conference call with analysts - covered by Reuters - company president Steve Laut said: “We believe gas prices will come back to reasonable levels. It might take two or three years before that happens.”
Natural gas is changing hands for $4 (U.S.) per million BTUs, a third of the price it fetched two years ago, ahead of the recession.
The relatively low price for natural gas is spurring property sales to the oil patch’s biggest players, as oil patch experts say many junior energy plays borrowed money to buy and develop properties over the past five years. Weak gas prices means those debts cannot be services, so lenders are either forcing sales by existing owners, or taking over properties and selling them off.
One of the lenders pushing natural gas-heavy junior companies to pay back loans is government-owned ATB Financial - better known as the Alberta Treasury Branch. Financing energy companies is a priority for the agency, and it built its entire loan portfolio during the recession.
ATB Financial’s most recent financial report showed the agency had $24-billion of loans outstanding at the end of 2009, up 8 per cent from the previous year. ATB Financial raised its loan loss provisions in the most recent quarter by $6.3-million to $20.2-million.
http://www.theglobeandmail.com/globe-investor/markets/streetwise/big-oil-boosts-gas-holdings/article1560656/
EnCana, focusing on unconventional gas plays after spinning out its heavy oil holdings last year, revealed on Friday that it built a sizable 250,000 acre holding in an area of Michigan known as the Collingwood shale play. A promising, 9,500 foot-deep exploration well has been drilled. BMO Nesbitt Burns analyst Randy Ollenberger said in a report on Friday that EnCana’s average acquisition cost of $150 an acre is well below the price that rivals have paid on eastern U.S. shale plays.
Over at Canadian Natural Resources - a company commonly known by its stock symbol, CNQ - investors found out late Thursday that their company dropped a total of $1-billion in the past three months to buy a raft of natural gas properties near its existing holdings in B.C. and Alberta.
The news came with the release of quarterly earnings, and in CNQ’s conference call with analysts - covered by Reuters - company president Steve Laut said: “We believe gas prices will come back to reasonable levels. It might take two or three years before that happens.”
Natural gas is changing hands for $4 (U.S.) per million BTUs, a third of the price it fetched two years ago, ahead of the recession.
The relatively low price for natural gas is spurring property sales to the oil patch’s biggest players, as oil patch experts say many junior energy plays borrowed money to buy and develop properties over the past five years. Weak gas prices means those debts cannot be services, so lenders are either forcing sales by existing owners, or taking over properties and selling them off.
One of the lenders pushing natural gas-heavy junior companies to pay back loans is government-owned ATB Financial - better known as the Alberta Treasury Branch. Financing energy companies is a priority for the agency, and it built its entire loan portfolio during the recession.
ATB Financial’s most recent financial report showed the agency had $24-billion of loans outstanding at the end of 2009, up 8 per cent from the previous year. ATB Financial raised its loan loss provisions in the most recent quarter by $6.3-million to $20.2-million.
http://www.theglobeandmail.com/globe-investor/markets/streetwise/big-oil-boosts-gas-holdings/article1560656/
No comments:
Post a Comment