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CNRL curtailing production from new natural gas wells as low prices persist

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CALGARY – Canada’s largest oil and gas producer is postponing the start of production from some of its planned new natural gas wells due to persistent low prices.

Canadian Natural Resources Ltd. said Thursday about 20 of its remaining planned 2024 natural gas wells will be drilled this year, but the company will curtail production from them until prices improve.

“I can’t give you an exact price, but it has to be better than what it is now,” said CNRL president Scott Stauth on a conference call with analysts, adding he expects prices could rebound enough to bring the wells online by late 2024 or early 2025.

Low natural gas prices, the result of too much supply in the market, are hurting producers all over North America. Companies are shutting in production or delaying and cancelling projects.

This week, U.S. natural gas futures hit a new 12-week low, in spite of hot summer conditions, which usually bode well for natural gas because warm weather boosts the need for electricity-driven air conditioning.

Part of the reason for the current glut in supply is that North American oil output is increasing. Major oil producers are pumping out more oil in the face of strong demand and healthy prices, and producing natural gas as a byproduct of that process.

On Thursday, Stauth said CNRL has shifted some of its natural gas development focus this year to higher-return multilateral heavy oil wells.

The startup of the Trans Mountain pipeline expansion in May has boosted prices for Canadian heavy oil producers, which prior to the pipeline’s opening took a significant discount on their product compared to U.S. competitors simply due to a lack of export capacity.

CNRL holds the largest heavy oil land base in Canada.

“The impact on the energy industry has been and will continue to be positive,” Stauth said of Trans Mountain’s completion.

CNRL’s earnings were up in the second quarter in part because of higher oil sales and prices.

The company said its earnings were $1.72 billion for the quarter ending June 30, up from $1.46 billion for the same quarter last year.

Earnings worked out to 80 cents per diluted share, up from 66 cents last year.

Adjusted net earnings from operations were $1.89 billion, up from $1.26 billion last year.

The company said production volumes in the quarter were 1.29 million barrels of oil equivalent per day, up eight per cent from the same quarter last year.

That came in slightly ahead of analysts’ expectations of $1.27 million barrels of oil equivalent per day.

In July, CNRL said it produced the one billionth barrel of bitumen from its Horizon oilsands facility since operations began there in 2009.

The company has said it believes the output at Horizon could be increased by 195,000 barrels per day of synthetic crude oil, a 76-per-cent hike from the mine’s current capacity of approximately 255,000 barrels per day.

But Stauth said Thursday that plan is dependent on a number of conditions, including government support for the oilsands industry’s proposed Pathways Alliance carbon capture and storage project.

He said the Pathways group remains in talks with both provincial and federal governments in an effort to find a funding model that would allow the proposed $16.5-billion carbon transportation network to go ahead.

This report by The Canadian Press was first published Aug. 1, 2024.

Companies in this story: (TSX:CNQ)

The Canadian Press. All rights reserved.

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University of Waterloo stabber should face lengthy sentence: Crown

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KITCHENER, Ont. – Prosecutors are arguing a man who stabbed a professor and two students in a University of Waterloo gender studies class last year should face a lengthy sentence because of the attack’s lasting impact on campus safety and security.

Federal prosecutor Althea Francis says a sentence in the upper range is appropriate not only because Geovanny Villalba-Aleman wanted to send a message about his views but also because he sought to make those with different beliefs feel unsafe.

The Crown has said it is seeking a sentence of 16 years for Villalba-Aleman, who pleaded guilty to four charges in the June 2023 campus attack.

The sentencing hearing for Villalba-Aleman began Monday and is expected to continue all week.

Federal prosecutors argued Tuesday that Villalba-Aleman’s statement to police, and a manifesto that was found on his phone, show his actions were motivated by ideology and meant to intimidate a segment of the population.

Villalba-Aleman pleaded guilty to two counts of aggravated assault, one count of assault with a weapon and one count of assault causing bodily harm.

A video of his statement to police was shown in court earlier in the sentencing hearing.

In the video, Villalba-Aleman told police he felt colleges and universities were imposing ideology and restricting academic freedom, and he wanted the attack to serve as a “wake-up call.”

This report by The Canadian Press was first published Oct. 23, 2024.

The Canadian Press. All rights reserved.



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Nova Scotia premier announces one point cut to HST, to 14 per cent, starting April 1

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HALIFAX – Nova Scotia Premier Tim Houston has announced a one percentage point cut to the harmonized sales tax starting April 1.

Houston made the announcement today as speculation mounts about a snap election call in the coming days.

The premier says the cut to the provincial portion of the tax would reduce it from 15 per cent to 14 per cent.

Houston says his government is making the move because people need more help with the cost of living.

A one percentage point reduction to the HST is expected to cost about $260.8 million next fiscal year.

The department says the HST brings in $2.7 billion or 17.1 per cent of provincial revenues, second only to personal income taxes.

This report by The Canadian Press was first published Oct. 23, 2024.

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A look at what people are saying about the Bank of Canada’s rate decision

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OTTAWA – The Bank of Canada cut its key policy interest rate by 50 basis points on Wednesday to bring it to 3.75 per cent. Here’s what people are saying about the decision:

“High inflation and interest rates have been a heavy burden for Canadians. With inflation now back to target and interest rates continuing to come down, families, businesses and communities should feel some relief.” — Tiff Macklem, Bank of Canada governor.

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“Activity in Canada’s housing market has been sluggish in many regions due to higher borrowing costs, but today’s more aggressive cut to lending rates could cause the tide to turn quickly. For those with variable rate mortgages – who will benefit from the rate drop immediately – or those with fast-approaching loan renewals, today’s announcement is welcome news indeed.” — Phil Soper, president and CEO of Royal LePage.

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“This won’t be the end of rate cuts. Even with the succession of policy cuts since June, rates are still way too high given the state of the economy. To bring rates into better balance, we have another 150 bps in cuts pencilled in through 2025. So while the pace of cuts going forward is now highly uncertain, the direction for rates is firmly downwards.” — James Orlando, director and senior economist at TD Bank.

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“The size of the December rate cut will depend on upcoming job and inflation data, but a 25 basis point cut remains our baseline.” — Tu Nguyen, economist with assurance, tax and consultancy firm RSM Canada.

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“Today’s outsized rate cut is mostly a response to the heavy-duty decline in headline inflation in the past few months. However, the underlying forecast and the Bank’s mild tone suggest that the future default moves will be 25 bp steps, unless growth and/or inflation surprise again to the downside.” — Douglas Porter, chief economist at Bank of Montreal.

This report by The Canadian Press was first published Oct. 23, 2024.

The Canadian Press. All rights reserved.



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