CALGARY, Nov. 13, 2014 /CNW/ - (TSX: TBE) – Twin Butte Energy Ltd. ("Twin Butte" or the "Company") is pleased to provide it's 2015 capital plan and report its financial and operational results for the three months ended September 30, 2014.
Highlights are as follows:
Reinforced the financial sustainability of the Company's dividend with the total payout ratio for the year to date being 96%. The Company's guidance for 2015 demonstrates dividend sustainability at forecast $US80 WTI. Twin Butte has declared $139.4 million ($0.52 per share) in dividends since January 2012 and maintained a cumulative total payout ratio of 92.5% since that time.
Approved a $160 million 2015 capital budget, which based on a $US 80.00 WTI oil price maintains production, grows cash flow by 10%, delivers a $0.192 per share dividend, and holds the total payout ratio to under 100%.
Record third quarter funds flow of $53.7 million, ($0.15 per share) an increase of 54% from third quarter 2013 and an increase of 11% from the second quarter of 2014. Operating cost reductions and higher medium and light oil weighting more than offset reduced realized pricing in the quarter leading to the record funds flow.
Average third quarter production of 20,981 boe/d, an increase of 29% from third quarter 2013, while liquids weighting increased to 90% from 88% over the same periods. Light and medium oil represented 37% of production in the quarter compared to 3% in the third quarter of 2013.
Completed an organic net capital expenditure program of $43.9 million including the drilling of 39 gross (36.7 net) wells at a 97% success rate. The majority of the third quarter capital was focused on horizontal drilling activity with 70% of the wells being drilled in the Company's medium oil Provost area.
Successfully drilled, completed and brought on stream the first of Twin Butte's Provost Sparky multi-frac horizontal wells, at costs below initial expectation and at rates above average competitor wells. This de-risking has established a new long term drilling inventory.
Certain selected financial and operational information for the three and nine months ended September 30, 2014 and 2013 is outlined below and should be read in conjunction with Twin Butte's condensed interim financial statements for the three and nine months ended September 30, 2014 and 2013 and accompanying management's discussion and analysis filed with the Canadian securities regulatory authorities which may be accessed through the SEDAR website (www.sedar.com) and also the Company's website.
Read more at http://www.stockhouse.com/news/press-releases/2014/11/13/twin-butte-energy-announces-sustainable-2015-dividend-model-and-2014-third#ZkDHI011IVXCwEXZ.99
Canadian crude producers are being cushioned from falling global prices by a drop in the loonie and narrower discounts for heavy oil shipped to key U.S. markets.
Brent crude, the global benchmark, has fallen about 15 per cent over the past 30 days, and U.S. West Texas intermediate has also tumbled sharply. But in Canada, the average price in Canadian dollars received by producers was actually slightly higher in the past month than over the previous 4 1/2 years, Toronto-Dominion Bank economist Leslie Preston said in a report Monday.
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The reason is tied to favourable moves in the currency market, along with a reduced discount for Canadian heavy oil against WTI as more Alberta oil finds its way to U.S. refineries in need of heavy crude.
“It is a bit like the cleanest dirty shirt,” Ms. Preston said in an interview. “The reality is we are better off now because we were worse off two years ago, when we were in the worst phase of discounting and the Canadian dollar was at parity.”
The Canadian Association of Petroleum Producers estimates that a 1-cent decline in the Canadian dollar would be equivalent to a $1-per-barrel rise in the oil price. Since the June peak, the benchmark Canadian heavy Western Canada Select has dropped $12 (U.S.) a barrel, but the loonie has fallen 5 cents against the greenback, cancelling out nearly half the crude price drop.
“It has been partially mitigated but it has not offset the total decline that is out there,” CAPP vice-president Greg Stringham said. Heavy oil accounts for nearly 70 per cent of Canada’s exports so far this year, and like all Canadian production, it is priced in relation to the leading U.S. benchmark, WTI.
Oil prices continued to sink Monday. WTI fell to $77.40 (U.S.) a barrel, down $1.25 on the day and off nearly $30 since its peak in June. The leading international benchmark, Brent, fell more than $1 to $82.34, and has fallen $33 since June.
Canadian heavy oil producers have seen their prices improve relative to WTI, thanks to the expansion of rail and pipeline capacity out of Alberta, and the commission of a heavy-oil processing unit at BP PLC’s Whiting refinery in Indiana.
There has been surging demand for Canada’s extra-thick crude on the U.S. Gulf Coast, home to the world’s largest refining complex, said Jackie Forrest, vice-president of energy research at ARC Financial Corp. in Calgary. The region has capacity to soak up as much as 2.7 million barrels a day of heavy oil, Ms. Forrest said.
But consumption has been held back, averaging just 1.8 million b/d so far this year, amid a pullback in deliveries from traditional suppliers in Venezuela and Mexico, and protracted delays building pipelines such as TransCanada Corp.’s Keystone XL.
“So that gap is the opportunity for Canada, because that’s actually refineries that would prefer to take heavy crude that just can’t get it,” Ms. Forrest said. “That’s translated into stronger prices back here in Western Canada as well for heavy crudes compared to light crudes.”
Discounts for Western Canada Select, the key oil sands benchmark, have shrunk to an average of about $19 (U.S.) this year from roughly $24 a year ago, for example.
Prices are expected to more closely track the U.S. benchmark as more production heads south from Alberta through expanded rail networks and new pipeline connections. “There’s still a very big market for Canadian heavy crude in the Gulf Coast despite the growth of tight oil,” she said, referring to the boom in unconventional light oil production in the United States.
Ms. Preston, the TD economist, said lower prices won’t stall Canadian production growth until later this decade because supply coming on stream now was planned several years ago. “We still expect over the next couple of years production to grow year over year by 5 to 6 per cent … but I would expect to see a hit to corporate profits and government revenues over the next couple quarters.”
While some companies have shelved high-cost projects, those decision were taken prior to the slump in prices and had more to do with market access, cost inflation and a renewed emphasis on high-return projects rather than growth for growth’s sake.
The cash crunch is more likely to impede production from unconventional tight oil plays, like Alberta’s Duvernay, where the investment cycle is shorter, than in the long-lead-time, capital-intensive oil sands projects.
Will gold and silver maintain its bearish trend for the remainder of 2014 or will the precious metals find a bottom? Gold has been sliding down on its way to $1,000 while silver has beed bouncing around the $15 level. This has led investors to speculate whether the precious metals market has been establishing a strong base or if the correction is just taking a breather before continuing its downtrend.
There are many conflicting viewpoints on this matter which will be investigated in this article. We will start with a bullish viewpoint from Scott Winship, a portfolio manager of the Investec Global Gold fund who believes that there has been renewed investor interest in gold in recent months. Then we will discuss a bearish technical viewpoint from Peter Brandt who is a retired commodities trader, owner of Factor LLC and author of the book Diary of a Professional Commodities Trader.
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EndlessMountain on YouTube shares his silver chart analysis and reviews various sales charts for the American Silver Eagle. In October, we saw American Eagle sales break records which led the the U.S. Mint running out of 2014-dated coins to sell. This massive surge in demand is due to the recent decline in precious metals prices. The rising US dollar and announcements by the Fed to end Quantitative Easing have been the major drivers of the fall.