The CEO of Whitecap Assets Inc. says his firm is working to broaden its capability to seize, retailer and use carbon dioxide to boost oil restoration despite Ottawa’s determination to exclude such initiatives from proposed funding tax credit in its latest price range.
The federal price range final week known as for a session interval to decide on remaining design of the proposed tax credit score which might encourage main emitters in Canada to keep away from releasing carbon dioxide into the ambiance the place it’s a think about world warming.
“We have been disenchanted with the federal government’s neglect of the advantages of those initiatives to all Canadians,” mentioned Grant Fagerheim on Thursday throughout a convention name to debate the corporate’s first-quarter outcomes.
“Nonetheless, this doesn’t preclude us from collaborating in different value-enhancing actions that our present CCUS (carbon seize, use and storage) initiatives can present, reminiscent of (the sale of) carbon credit and decreasing or eliminating the price of CO2 used at Weyburn, Sask., and Joffre, Alta.”
Choices mentioned with massive emitters
Whitecap’s Weyburn venture is chargeable for about half of the 4 million tonnes of carbon dioxide sequestered annually in Canada. It injects it into an oilfield to boost manufacturing, piping it in from a plant in North Dakota, and says it is potential to double that quantity.
It says the a lot smaller Joffre CCUS venture in central Alberta, acquired with the takeover of NAL Assets Ltd. earlier this yr, could possibly be greater than doubled to retailer about 45,000 tonnes of carbon dioxide per yr from 21,500 tonnes in 2020. Its carbon dioxide supply is a close-by petrochemical plant.
Fagerheim mentioned Whitecap’s new power staff is discussing choices with massive emitters, reminiscent of cement and metal producers and refiners, to assist seize their carbon dioxide, whereas additionally taking a look at inside initiatives reminiscent of hydrogen manufacturing, which might end in additional volumes of carbon dioxide to be saved.
“All initiatives, current emitters, are at present making an attempt to raised perceive what credit score capability goes to be created by the federal authorities in addition to the provincial governments in each Alberta and Saskatchewan,” he mentioned.
“Whether or not it is on new hydrogen initiatives, which is able to create much more CO2, or different initiatives that exist at this specific time, the trail ahead goes to be by carbon seize. And subsequently it may be very substantial (for Whitecap).”
‘A clear tech story’
Analysts mentioned Whitecap’s carbon initiatives make it a singular participant within the oilpatch. Analyst Christopher Jones of Haywood Securities mentioned in a report it is an “fascinating differentiating issue” for the corporate.
Analyst Chris MacCulloch of Desjardins mentioned Whitecap is strategically positioned to emerge as a worldwide chief throughout the CCUS house.
“This could assist drive profitable enterprise growth alternatives that ought to ultimately assist reposition WCP as a clear tech story whereas nonetheless producing important free money circulate,” MacCulloch mentioned.
Calgary-based Whitecap reported document manufacturing of 95,828 barrels of oil equal per day within the first quarter, up 30 per cent over 73,452 boe/d in the identical interval of 2020, or three per cent per share.
Throughout the three months ended March 31, it accomplished the acquisition of NAL and TORC Oil & Fuel Ltd. in return for shares.
In early April, it struck a $300-million cash-and-shares deal to purchase personal Kicking Horse Oil & Fuel Ltd., for 34.5 million Whitecap widespread shares and $56 million in money.
Whitecap earned first-quarter web earnings of $19.6 million, in contrast with a web lack of $2.1 billion in the identical interval of 2020 when it recorded a $2.9-billion non-cash writedown within the worth of its property as a result of low oil costs.
It mentioned Thursday its common realized crude oil value within the latest quarter was $65.11 per barrel, versus $47.48 a yr in the past, whereas pure fuel liquids costs have been $35.50 per barrel, up from $12.30, and pure fuel offered for $3.34 per thousand cubic ft, up from $2.18.