This summer has been about as predictable as Donald Trump’s Tweets. Be it wildfires in Western Canada, hurricanes in the Gulf, earthquakes in Mexico or talk of nuclear war with North Korea, this summer has been full of unpredictable events. The oil and gas markets have not been spared by this string of unforeseen circumstances, creating volatility in prices. World oil prices have risen by about 15% over the past quarter, bolstered by higher demand forecasts, increasing tensions between [Read more]
GLJ Petroleum’s July 2017 Price Forecast
The biggest news in the energy industry over the past few months has revolved around the OPEC (and non-OPEC) production cuts. Whether the May 25th agreement to extend existing supply cuts into 2018 will impact the market on a macro scale is yet to be seen. Many analysts share the opinion that these cuts aren’t enough, but in a broad sense there probably hasn’t been enough time to tell if they will move the market in a meaningful way. The reality is that these market changes can’t be expected to [Read more]
GLJ Petroleum’s January 2017 Price Forecast
The last quarter in 2016 was a good one for energy prices. On September 30th, the February 2017 WTI and Henry Hub contracts settled at 49.49 USD/bbl and 3.30 USD/MMBtu, respectively. On December 30th, they settled at 53.72 USD/bbl and 3.72 USD/MMBtu. That’s 9% and 13% higher on the quarter, respectively, with gas prices boosted by this year’s winter weather. Looking back at the whole year, the WTI prompt month price is 45% higher than at the end of 2015 and the Henry Hub prompt price is up [Read more]
GLJ Petroleum’s October 1, 2016 Price Forecast
In the biggest news the oil market has seen in a while, OPEC just announced their agreement to cut the group’s crude oil output to 32.5 to 33 million barrels per day. Some are arguing about the specific terminology, saying it’s really only an “agreement to agree” or “an understanding that an agreement needs to be reached” and that the details remain to be seen. Nonetheless, OPEC’s most powerful member, Saudi Arabia, has offered to reduce its production, which is a sign they may be willing to [Read more]
GLJ Petroleum’s July 1, 2016 Price Forecast
In the second quarter of 2016, a substantial recovery in crude prices has taken place, with both Brent and WTI prices rising from the mid-30s to the high 40s. It’s difficult to attribute this streak to any single reason, but we can certainly identify some of the contributing factors. First, US Dollar weakness has boosted nearly all commodity prices worldwide, including energy prices. While it has recovered from its early-May low, the US Dollar has fallen about 4 percent against a basket of [Read more]
Alberta’s Surface Mineable Oil Sands Projects: Recovery Factors That Are Far From Conventional
Fort McMurray has been in the news a lot lately due to the wildfires that ravaged the city and a huge portion of the surrounding area. Prior to that, Fort McMurray would pop up in news articles whenever some celebrity added oil sands development to their environmental crusade and would get up on their soap box without a full understanding of the facts. That being said, it seemed like high time to point out some of the amazing work that is done in oil sands development. For those unfamiliar [Read more]
Understanding the Impact of the Alberta Modernized Royalty Framework
With the announcement of Alberta’s Modernized Royalty Framework (“MRF”) details on April 21, we are now in a position to assess the impact on corporate portfolios and individual play types. Overall, the royalty calculation is simplified, but with increased commodity price dependency relative to the existing Alberta Royalty Framework (ARF). The simplicity stems principally from the replacement of various incentives (New Well Royalty Relief, New Gas Deep Drilling) with a single cumulative [Read more]
Despite many obstacles ahead, the worst crude prices are now likely behind us
The first quarter of 2016 has seen weak and volatile commodity prices. Both crude oil and natural gas carved new lows in North America and globally. Recently, though, the beginning of spring has brought some positive market movement and other hints that, although there are still many obstacles ahead, the worst crude prices are now likely behind us. Last week, the most overall US domestic rig count dropped to an all-time low since data tracking began in 1949, signaling that even the producers [Read more]
How do the Recent NI 51-101 Amendments Affect Reserves Reporting? A Qualified Reserves Evaluator’s Perspective
On December 4, 2014, the Canadian Securities Administrators published Amendments to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities and those amendments became effective July 1, 2015. This blog is the second in a series that will describe the significant changes as seen through the eyes of a qualified reserves evaluator (QRE). Read the first one here. Part 2: Disclosure by Product Type The Amendments result in new, revised or deleted product types which impact [Read more]
The modified royalty framework: what we know and don’t know
On January 29, 2016, the Alberta Government announced publicly that it would adopt the recommendations of the Royalty Review Advisory Panel, presented in the Alberta at a Crossroads, Royalty Review Advisory Panel Report. The panel’s task was to “identify opportunities to optimize Alberta’s royalty framework” with a focus on optimizing the returns to Albertans while maintaining industry competitiveness, encouraging diversification and innovation in our province and supporting responsible resource [Read more]