Page 4 - NorthAmOil Week 06 2021

NorthAmOil COMMENTARY NorthAmOil

Canadian majors announce

losses, write-downs

Three of Canada’s leading oil and gas companies have reported

another challenging quarter and further difficulties are expected,

though crude prices are improving

CANADA THREE of Canada’s four leading oil and gas in Alberta. This was down from a net profit of
companies have, unsurprisingly, reported losses CAD271mn ($214mn) in the fourth quarter of
WHAT: for the fourth quarter of 2020. Quarterly results 2019.
Three of the four leading have been announced by Imperial Oil, Suncor Both Suncor and Cenovus posted considera-
Canadian oil and gas Energy and Cenovus Energy in recent days, with bly smaller losses, at CAD168mn ($133mn) and
companies have posted only Canadian Natural Resources Ltd (CNRL) CAD153mn ($121mn) respectively. Cenovus’
fourth-quarter losses. yet to post its results out of the top four Canadian loss marked a turnaround from a fourth-quar-
producers. ter profit of CAD113mn ($89mn) in 2019, but
WHY: The results illustrate that while market for Suncor, the latest result was an improve-
Market conditions conditions have improved from the second ment compared with a net loss of CAD2.34bn
improved towards the quarter of 2020, when much of the world was ($1.85bn) a year ago.
end of 2020, but not in lockdown in response to the coronavirus Sequentially, Imperial swung to a loss from a
enough for these firms to (COVID-19) pandemic and oil prices were narrow profit of CAD3mn ($2.4mn) in the third
turn a profit. in freefall, there is still some way to go. This is quarter of 2020. Suncor’s loss widened from a
in line with the trends that can be seen across net loss of CAD12mn ($9.5mn) in the third
WHAT NEXT: quarterly results for US oil and gas producers. quarter, while Cenovus saw its loss shrink from
The cancellation of Now, crude prices are strengthening, with a net loss of CAD194mn ($153mn).
Keystone XL came as a Brent rising above $60 per barrel this week Both Suncor and Cenovus also reported
blow to these firms, but for the first time since the pandemic started. impairment charges, though these were not
rising oil prices will be Other obstacles still remain, though, including as large as the one Imperial was hit by. Suncor
welcomed. for Canadian producers. said its loss included a CAD423mn ($334mn)
after-tax asset impairment charge related to the
Losses White Rose and West White Rose projects and
The losses posted by Imperial, Suncor and a CAD142mn ($112mn) transportation provi-
Cenovus varied in their severity. Imperial sion related to the recently cancelled Keystone
reported the largest loss for the fourth quarter, XL oil pipeline. These impairments were offset
at CAD1.146bn ($904mn), though this included by a CAD539mn ($425mn) foreign exchange
a CAD1.171bn ($924mn) impairment charge gain on US dollar-denominated debt.
on certain abandoned unconventional assets Cenovus also took a hit from the cancellation

P4 www. NEWSBASE .com Week 06 11•February•2021