Husky Energy Inc. cumulative redeemable preferred T.HSE.PR.B

WCS

[mrbb]

hope this insert image work

[mrbb]

good news though, weeds are legal to buy and smoke come monday, overcoming Canada's main impediment to progress, according to justine truedough 

[mrbb]

this will take care of low WCS prices, just very high brent prices :)   https://business.financialpost.com/commodities/energy/oil-could-hit-200-or-even-double-that-figure-saudi-threatens-to-retaliate-against-any-sanctions-over-khashoggi-disappearance

[lowe0]

Please see below which shows that for most heavy oil producers higher WTI prices will make things worse because Alberta heavy will still be landlocked. For the heavy oil producers in NE Alberta this situation is much worse than any previous WTI price drops. This is due to the condensate that is required to be added to bitumen to reduce the viscosity of the blend to make it shippable down the

[oilandgasmick]

Excellent post. This supports what was said on this thread last week. The value of the bitumen is now negative when you factor in the high cost per barrel of condensate input and then look at the price of WCS.  In turn this means a massive writedown of reserves for a number of bitumen shovelers because by defintion reserves are "that oil which is economically recoverable" and a

[mrbb]

not totally correct.  The wide WCS differential is NOT due to high condensate price, it is due to lack of takeaway pipeline capacity. There are plenty of condensate in north american market. In fact condensate and wti suffer their own differntial to brent.  May i remind you that not long ago wti worth more than brent, until the shale oil boom took hold. 

[mrbb]

sorry to tell you that oil geo economic political impact of high oil price is much more complex than your simple math.   (1) Saudi threaten with cutback to drive oil to $200. Lets assume wti 180$ case. condensate cost =30% x 180 =  54$ using your example of 50$ differential 180-50-54 =  $76 WCS I know $200 brent is fantasy for now but the math say 76$ WCS is higher than $20 WCS

[mrbb]

the wide WCS differential is due to lack of pipeline capacity causing backlog, not due to high condensate prices.  In fact, condensate price at edmonton as of oct 12 friday close is 60.4 USD while WTI closed at 71.34 USD.  Therefore, it is wrong to apply full wti prices to condensate.

[lowe0]

You are correct that the net revenue that producers get for the blend product is based on both the differential and the cost of the condensate. The consdensate price is driven by sipply and demand. More recently the condensate price is clsoe to 90% of WTI but there were times not that long ago where condensate was 130% of WTI. You are correct that more condensate will be available  with LNG

[mrbb]

in the normal past condensate were selling ~90% of wti because there is not much other market for it beside as a diluent. That 130% of wti price of condensate is just a blip, where producer rushes to fill in the available pipeline space for dilbit. My math was just for fun on a $200 case. I doubt Saudi want a oil war since they are no longer the sole price driver. No matter how hard meg

[MigraineCall]

Sub 11 prices mean MEG is merely near exact correlation following the HSE share price, which has dropped since the offer was made. The value of the offer is a combination of 11 cash, and HSE shares. MEG share price is now tied to the fortunes of HSE for the next while.

[oilandgasmick]

Like it or not, we can't replace Saudi barrels with WCS due to the differing content (usages)and the fact that its so difficult to get our product to world markets. This situation could provoke a world wide economic crisis. This was all fairly predictable because the new boy-king in Saudi is more agressive and blood-thirsty than any Saudi ruler in the past. Just ask the children of Yemen who