RE:RE:RE:SIX (6) More DAYS To BUY CVE To COLLECT $ 0.105 Dividend !!! this is what i remember plus what i can gather and connected them from public news release as well.
Husky began producing natural gas at Liwan 3-1 on March 31, 2014, and Liuhua 34-2 on ~December 15, 2014. The agreement signed with CNOOC was at US$11 to US$13 per mcf for five years. After that the gas would be sold at floating market rates. The initial contract covers for gas production from Liwan 3-1 and Liuhua 34-2 gas fields only. I think the CAD/USD exchange rates were 1.1 to 1.2X in those time. The high contract price goes to Husky 100% to help pay off the exploration & development cost before reverting to 49% / 51% split for Husky / CNOOC after payout
As you know, crude oil prices crashed during 2014 from $105/bo in June 2014 to $48/bo in January, 2015. China feel jibbed and was only paying 1/2 the contract price in hope to get contract re-priced. Husky threaten to sue. In the end, the contract price was re-negotiated with CNOOC at between C$12.50 (US$9.54) and C$15 (US$11.45) per mcf in August 2016 but retroactive effective Nov, 2015. Because CAD devaluation, re-negotiated price net n CAD really didn't drop much, if at all. CNOOC management felt good becoz they got the price reduced, Husky felt good because gas revenue didn't reduce much if at all.
Liuhua 29-1 gas field production started in Nov 2020 and contract term had already reached its term so all the gas should be floating price now. Liuhua 29-1 gas field is 75% Husky (now CVE), 25% CNOOC.
Looking back, the contract price was like a bonanza for husky given the low oil prices in those time period and china was shown as unethical, nothing new here. Funny part i find here is had china stop b!tching and instead lock in gas contract for a longer term with husky at those high 'old' contract prices, they would look smart today because when i check the news today:
June 3, 2022 - Bloomberg reported Friday that Northeast Asia spot LNG prices held between $20-$25/mmbtu as China increased Covid-19 testing and monitoring. The Japan/Korea Marker for gas delivered in July held steady at around $24/MMBtu over the past three days after a $2 increase over the Memorial Day weekend. (BTW, 1 mcf = 1.037 MMBtu)
Another source https://www.nasdaq.com/articles/global-lng-asian-lng-prices-stable-on-weak-demand
The average LNG price for May delivery into north-east Asia LNG-AS was estimated at $33.00 per metric million British thermal units (mmBtu), unchanged from the previous week, industry sources said.
The average price for June delivery was estimated at $29.00 per mmBtu, they added.
autofocus111 wrote: mrbb Do you know when the Liwan contracts come up for renewal? I recall back in the HSE days a few years ago they were basically forced into renegotiating lower (but still reasonably high) prices when natgas prices crashed, but forgot what the duration is.