In today’s Energy Letter, I want to provide readers with a general overview of the situation in Alberta. In this week’s Energy Strategist I will specifically discuss two companies that I visited on this trip — Cenovus Energy (NYSE: CVE, TSE:CVE) and Canadian Natural Resources (NYSE: CNQ, TSE: CNQ). In next week’s Energy Letter I will discuss some of the logistical issues involved in getting the oil sands crude to market.
Canada produced 3.9 million barrels per day (bpd) in 2012, making it the fifth largest oil producer in the world. Canada is also the fifth largest global natural gas producer at 15 billion cubic feet (Bcf) per day.
Alberta has a population of 4 million people, and is Canada’s primary oil- and gas-producing province. Alberta’s economy is highly dependent on oil and gas. It’s situated next to its more liberal neighbor British Columbia, which is a bit like having Texas border California.
Alberta accounted for 2.5 million bpd of Canada’s oil production, and 10 Bcf/day of Canada’s gas production last year. Alberta’s share of Canada’s oil production is expected to grow substantially over time. The province supplied 22 percent of US crude oil imports in 2012, a larger contribution than from any country other than its own.
Canada has the third-largest oil reserves in the world — more than Iran or Iraq. Of the 173 billion barrels of Canadian reserves, 169 billion barrels are from oil sands, which are a mixture of sand, clay, water and bitumen — a very heavy oil.
Of the world’s oil reserves, 80 percent are state-owned or c! ontrolled. Only 20 percent of global reserves are accessible to independent oil and gas companies, and half of those are in Canada’s oil sands.
Alberta’s oil production has been growing by about 170,000 bpd each year, and a production increase of about 1.8 million bpd is forecast by 2022. There is some shale gas and tight oil in the central and southern part of the province, away from where oil sands are located. There have not been any forecasts made on future tight oil production in the province, as it is still at a pre-commercial stage.
Alberta’s goal is to be in the top quartile for conditions favorable for investing in the oil and gas industry, and to grow oil sands from its current market share of 2.1 percent of global oil consumption. Canada’s oil sands saw $25 billion (Canadian) of investment in 2012, versus $20 billion for conventional oil and gas. Historically most of the investment has originated from Canada, the US and Europe, but investments from Asia have increased substantially in recent years. Foreign countries with investments in Alberta’s oil sands include China, Japan, Korea, Thailand, Norway, France, UK and the Netherlands.
If Alberta were a US state it would be the third largest by area, just barely behind Texas. The oil sands deposits are spread across an area slightly larger than New York state. Of the nearly 55,000 square miles of oil sands formation, 1,853 square miles have been identified as being close enough to the surface for mining. To date, 276 square miles have been disturbed by surface mining, and 27 square miles are under active reclamation.
Source: Government of Alberta
Most of the oil sands production thus far has come from surface mining, and this is the technique that has attracted the most environmental criticism. Surface mining is feasible when the oil sands are relatively close to the surface. In order to produce oil sands from surface mines, any harvestable timber is sold and the overburden — whi! ch consis! ts of 30 to 40 meters of peat, clay and sand — is removed and set aside for future reclamation. The oil sands are then removed from the open pit and placed in dump trucks capable of carrying loads of 400 short tons. The trucks themselves weigh 250 tons, so a fully-loaded truck weighs 1.3 million pounds.
Truck unloading oil sands at Horizon oil sands site. Source: Canadian Natural Resources
The trucks transport the ore to a processing facility where it is dropped into a crusher, mixed with hot water, and then piped to the plant. The mixture is put into large separation vessels where the bitumen is removed in the top layer, and the bottom layer of sand and some residual bitumen is sent to the infamous tailings ponds where it will eventually be buried, before the land above the tailings pond is reclaimed. The recovery rate for bitumen from surface mines is over 90 percent.
Aerial view of the Horizon oil sands facility. Source: Canadian Natural Resources
Hot China Companies To Buy For 2014: New Oriental Education & Technology Group Inc.(EDU)
New Oriental Education & Technology Group Inc. provides private educational services primarily in the People?s Republic of China. It offers a range of educational programs, services, and products consisting primarily of English and other foreign language training; test preparation courses for admissions and assessment tests; primary and secondary school education; development and distribution of educational content; software and other technology; and online education. The company?s language training courses primarily consist of various types of English language training courses, and other foreign languages, including German, Japanese, French, Korean, and Spanish. It offers test preparation courses for language and entrance exams used by educational institutions in the United States, the People?s Republic of China, and commonwealth countries. The company also operates primary and secondary schools in Yangzhou. In addition, New Oriental Education & Technology Group Inc. deve lops and edits content for educational materials for language training and test preparation, such as books, software, CD-ROMs, magazines, and other periodicals. It distributes these materials through various distribution channels consisting of own classrooms and bookstores, as well as third-party distributors. Further, the company offers various online education programs on its Web site, koolearn.com. Additionally, it provides consulting services to help students through the application and admission process for overseas educational institutions, as well as post-secondary educational programs to help students seek career opportunities; and operates two pre-schools. The company offers educational services under the ?New Oriental? brand name. As of May 31, 2010, it offered education programs, services, and products through a network of 48 schools, 319 learning centers, and 25 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People?s Republic of China.
Advisors' Opinion:- [By Belinda Cao]
New Oriental Education & Technology Group Inc. (EDU), China�� largest private educational company, fell 11 percent last week to a one-month low of $16.07. Oppenheimer & Co. analyst Ella Ji said April 2 that students may avoid large gatherings because of the flu, impacting New Oriental.
- [By Seth Jayson]
New Oriental Education & Technology Group (NYSE: EDU ) reported earnings on April 24. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Feb. 28 (Q3), New Oriental Education & Technology Group met expectations on revenues and beat expectations on earnings per share.
Hot China Companies To Buy For 2014: Xueda Education Group(XUE)
Xueda Education Group provides tutoring services for primary and secondary school students in the People?s Republic of China with a focus on offering personalized tutoring services. Its services include consultation and assessment, formulation of a customized study plan, personalized tutoring, and delivery of supporting services. The company also provides course offerings that cover various academic subjects taught in primary and secondary schools, such as mathematics, English, physics, Chinese, and chemistry; and self-designed courses beyond the standard curriculum in certain subjects, as well as in subjects not taught at public primary and secondary schools. As of December 31, 2010, its tutoring service network comprised 207 learning centers and approximately 9,650 full-time service professionals, serving customers located in 53 economically developed cities across 27 of China?s 31 provinces and municipalities. The company was founded in 2001 and is headquartered in Beij ing, the People?s Republic of China.
Hot High Tech Companies To Own In Right Now: Euro/Yen(EJ)
E-House (China) Holdings Limited, through its subsidiaries, operates as a real estate services company in China. It provides primary real estate agency services, secondary real estate brokerage services, real estate information and consulting services, real estate advertising services, real estate promotional event services, real estate online services, and real estate investment fund management services. The company offers primary real estate agency services to real estate developers. Its secondary real estate brokerage services include offering advisory services on choices of properties; accompanying potential buyers on house viewing trips; drafting purchase contracts; negotiating price and other terms; and providing preliminary proof of title, as well as coordinating with the notary, the bank, and the title transfer agency. The company also provides real estate information services comprising data subscription services and data integration services; and real estate cons ulting services, including land acquisition consulting, development consulting, marketing consulting, and comprehensive solution consulting. In addition, it offers real estate advertising services consisting of advertising design and sales in print and other media; and real estate promotional event services, including securing venues, hiring caters and other various service providers, formulating event themes, and inviting speakers and guests for real estate promotional events. Further, the company provides real estate online services, including real estate news, information, property data, and access to online communities to real estate consumers and participants through local Web sites; and involves in real estate investment fund management activities that consist of investments in China?s real estate sector. E-House (China) Holdings Limited was founded in 2000 and is headquartered in Shanghai, the People?s Republic of China.
Advisors' Opinion:- [By Seth Jayson]
E-House (China) Holdings (NYSE: EJ ) reported earnings on May 16. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q1), E-House (China) Holdings crushed expectations on revenues and beat expectations on earnings per share. - [By Belinda Cao]
E-House China Holdings Ltd. (EJ), a real estate brokerage, gained 9.2 percent to $9.70, extending it advance to a third week. Its American depositary receipts retreated 3.1 percent Sept. 20 from the highest level since May 2011.
- [By Roberto Pedone]
One under-$10 name that's quickly pushing within range of triggering a big breakout trade is E-House China (EJ), which is engaged in providing real estate agency and brokerage services in the primary and secondary markets and real estate consulting and information services in the People's Republic of China. This stock is off to a monster start in 2013, with shares up sharply by 131%.
If you take a look at the chart for E-House China, you'll notice that this stock has been trending sideways and consolidating for the last month and change, with shares moving between $8.35 on the downside and $10.24 on the upside. Shares of EJ are starting to spike sharply higher today right above that $8.35 low, and this stock is now quickly moving within range of triggering a big breakout trade above the upper-end of its recent range.
Traders should now look for long-biased trades in EJ if it manages to break out above some near-term overhead resistance levels at $9.74 to $10.19 a share, and then once it clears its 52-week high at $10.24 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.11 million shares. If that breakout triggers soon, then EJ will set up to enter new 52-week-high territory above $10.24, which is bullish technical price action. Some possible upside targets off that breakout are $13 to $15 a share.
Traders can look to buy EJ off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $8.35 a share, or around its 50-day moving average at $7.96 a share. One can also buy EJ off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
Hot China Companies To Buy For 2014: Perfect World Co. Ltd.(PWRD)
Perfect World Co., Ltd., through its subsidiaries, engages in the research, development, operation, and licensing of online games primarily in the People?s Republic of China, the United States, and the Rest of Asia. It develops online games based on its game engines and game development platforms. The company?s 3D massively multiplayer online role playing games (MMORPGs) include Perfect World, an adventure and fantasy game with traditional Chinese settings; Legend of Martial Arts, an adventure story of Chinese swordsmen set in an ancient kingdom; and Perfect World II, which is set in a similar content and graphic background as Perfect World. It also offers Zhu Xian that is based on martial arts focused adventure set in a fantasy world; Chi Bi, a war story developed based on ancient Chinese history known as the Three Kingdoms; Hot Dance Party, a 3D online casual game; Pocketpet Journey West, a 3D MMORPG based on the classical novel of Chinese literature, Journey to the West ; Battle of the Immortals, a mysterious adventure, which enables game players to travel between eastern and western cultures, and adventures in historic sites and turf wars; and Fantasy Zhu Xian, a 2D turn-based MMORPG based on the Internet fantasy novel Zhu Xian. It also involves in the production and distribution of films, as well as television advertising activities. The company was founded in 2004 and is based in Beijing, the People?s Republic of China.
Advisors' Opinion:- [By Sean Williams]
What: Shares of Perfect World (NASDAQ: PWRD ) , a China-based online video game developer, soared as much as 13% after the company reported better-than-expected first-quarter results.
Hot China Companies To Buy For 2014: Qihoo 360 Technology Co. Ltd.(QIHU)
Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products in the People's Republic of China. Its principal products include 360 Safe Guard, an Internet security product for Internet security and system optimization; 360 Anti-Virus, an anti-virus application to protect users? computers against trojan horses, viruses, worms, adware, and other forms of malware; and 360 Mobile Safe, a security program for the Google Android, Apple iOS, and Nokia Symbian smartphone operating systems. The company?s platform products comprise 360 Safe Browser, a Web browser; 360 Personal Start-up Page, a default homepage of 360 Safe Browser and a key access point to popular and preferred information and applications; 360 Application Store, a key access point to securely obtain and manage software and applications; and 360 Safebox, a solution that protects users against thefts of personal account information. It also provides online advertising services, including online marketi ng services and search referral services; and Internet value-added services comprising the operation of Web games developed by third-parties, remote technical support, and cloud-based services. The company was formerly known as Qihoo Technology Company Limited and changed its name to Qihoo 360 Technology Co. Ltd. in December 2010. Qihoo 360 Technology Co. was founded in 2005 and is based in Beijing, the People?s Republic of China.
Advisors' Opinion:- [By Dan Carroll]
Solar wasn't the only Chinese sector to break into the green this week and defy manufacturing's gloomy outlook. Search engine firm Qihoo (NYSE: QIHU ) picked up more than 3.3% on Friday alone after the company reportedly increased�its Chinese market share to 15%. Qihoo's grown rapidly, although with size could come slower growth in the future, especially as the firm goes up against Chinese search heavyweight Baidu (NASDAQ: BIDU ) for market share. Baidu still holds the Chinese market in a vice, even as the firm's market share slipped below 70%, according to tech�site TechinAsia. The battle for Chinese search clicks should be an interesting and lucrative fight in the future between these two firms, as more and more of China's growing middle class expands online.
No comments:
Post a Comment