While Saskatchewan’s oil and gas sector stands to benefit from a recent surge in global oil prices, drivers are feeling the pain at the pump.
Patrick De Haan, head of petroleum analysis at GasBuddy, said Canadian fuel prices are currently at or near record-highs as pandemic supply and demand begins to level out.
In Regina Wednesday, most stations offered regular fuel at around $1.47 per litre. On the east and west coasts, it was nearly $1.70 per litre.
“It’s going to be a particularly painful year, especially in the spring and early part of summer,” De Haan said.
De Haan pointed to several factors including a significant decline in oil inventory, current geopolitical tensions involving Russia and Iran, and disruptions caused by the COVID-19 pandemic.
He estimates Canadians could end up spending an average of $65 to $85 to fill a passenger vehicle, and $80 to $100 for an SUV, in 2022.
“I do think as we progress into 2022 … we’ll probably see lower prices. Simply because the high prices we’re expecting will incentivize oil companies to increase production wherever possible,” he said.
Patrick De Haan, head of petroleum analysis at GasBuddy, said Monday and Tuesday are often the best days to fuel up, price-wise, as energy markets begin to become active for the week. (CBC News)
Oil boom to bounce back?
Last Thursday, the North American benchmark price for oil surged to more than $90 US a barrel — its highest level since 2014.
On Feb. 1, Saskatchewan received its highest Crown oil and gas public offering result of 2021-22, generating more than $6.14 million in revenue for the province.
“These public offerings are a good bellwether of the state of the sector, and we haven’t been anywhere near the $6-million figure since June of 2019,” said Bronwyn Eyre, minister of energy and resources for Saskatchewan.
The province made nearly $15 million selling leases during the 2021-22 fiscal year — an increase of 131 per cent over the previous fiscal year.
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A 194.5-hectare lease in the Estevan area went to Midale Petroleums Ltd., with a bonus bid of more than $528,000. A bonus bid is in addition to the rental and royalty per hectare.
Mayor of Estevan Roy Ludwig said the city has been hurting since 2014, when a price collapse caused widespread bankruptcy and layoffs in the energy sector.
“You could call it the oil boom. We had no places available, no hotel rooms, nothing to rent. We had people sleeping in their cars, tenting in their backyards,” Ludwig said.
“It was a little insane that way. But we went from just going flat out, to basically idle.”
According to the 2021 Census, Estevan is the small urban centre with the second-fastest declining population growth rate, down six per cent from 2016 to 2021. The current population is around 11,500 people.
Now is a perfect time to welcome our workers back in the oil industry. The price of housing is reasonable. We’ve got lots to rent, lots of available space.– Roy Ludwig, mayor of Estevan
Ludwig said with the rising price of oil and the recent lease sales, he’s more optimistic about economic — and population — growth in the area.
“It’s nice to see the prices starting to rebound. We’re very excited about that. For us, that means jobs and economic activity,” he said.
“Now is a perfect time to welcome our workers back in the oil industry. The price of housing is reasonable. We’ve got lots to rent, lots of available space.”
The town of Lampman has around 735 people and is located roughly 48 kilometres northeast of Estevan in the rural municipality of Browning. Two leases southeast of the town were awarded to Millennium Land at $7,814.00 per hectare.
Greg Wallin, an administrative consultant with the RM, said the large oil field in the area started in the 1950s.
“In an old oil field, that’s always a concern that you have, that it’s a dying oil field and not an expanding one,” Wallin said. “It’s good to hear that [oil and gas] rights are going, so that it will continue.”
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Adam Stewart, manager of mineral land services with Millennium Land, said the company put in the bids on behalf of a client or clients, which will be made public at a later date.
Saskatchewan’s opposition finance critic, Trent Wotherspoon, said it’s good to see the conditions turn in favour of the hard-hit oil and gas sector — as long as revenues are used wisely.
“We need to make sure that those dollars are invested in our future, in economic diversification and strength for the long-term,” he said.
“And, importantly, to make life more affordable, because certainly Saskatchewan people are facing serious cost of living increases.”
The first Saskatchewan Crown oil and gas rights sale of the 2022-23 fiscal year is scheduled for April 5. It will include 207 leases covering more than 26,600 hectares and one exploration licence covering 812 hectares.
In November 2021, the Canadian Association of Energy Contractors (CAOEC) told the Canadian Press it expected increased drilling activity in 2022 to create 35,000 new jobs in Western Canada, an increase of 7,200 jobs year-over-year.
The CAOEC added it expects 6,457 oil and gas wells to be drilled in 2022, a more than 25 per cent increase from 2021.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
