Archive for Energy

The EIA Is Grossly Overestimating U.S. Shale

By OilPrice.com

The prevailing wisdom that sees explosive and long-term potential for U.S. shale may rest on some faulty and overly-optimistic assumptions, according to a new report.

Forecasts from the U.S. Energy Information Administration (EIA), along with those from its Paris-based counterpart, the International Energy

Agency (IEA), are often cited as the gold standard for energy outlooks. Businesses and governments often refer to these forecasts for long-term investments and policy planning.

In that context, it is important to know if the figures are accurate, to the extent that anyone can accurately forecast precise figures decades into the future.

A new report from the Post Carbon Institute asserts that the EIA’s reference case for production forecasts through 2050 “are extremely optimistic for the most part, and therefore highly unlikely to be realized.”

The U.S. has more than doubled oil production over the past decade, and at roughly 12.5 million barrels per day (mb/d), the U.S is the largest producer in the world. That is largely the result of a massive scaling-up of output in places like the Bakken, the Permian and the Eagle Ford. Conventional wisdom suggests the output will steadily rise for years to come.

It is worth reiterating that after an initial burst of production, shale wells decline rapidly, often 75 to 90 percent within just a few years. Growing output requires constant drilling. Also, the quality of shale reserves vary widely, with the “sweet spots” typically comprising only 20 percent or less of an overall shale play, J. David Hughes writes in the Post Carbon Institute report.

After oil prices collapsed in 2014, shale companies rushed to take advantage of the sweet spots. That allowed the industry to focus on the most profitable wells first, cut costs and scale up production. But it also pushed off a problem for another day. “Sweet spots will inevitably become saturated with wells, and drilling outside of sweet spots will require higher rates of drilling and capital investment to maintain production, along with higher commodity prices to justify them,” Hughes says in his PCI report.

In addition, this form of “high-grading” does allow for rapid extraction, but it doesn’t necessarily mean that more oil is ultimately going to be recovered when all is said and done.

The same might be true for all of the highly-touted productivity gains, Hughes says. The industry has boosted productivity by drilling longer laterals, intensifying the use of water and frac sand, as well as increasing the number of fracking stages. These productivity improvements are “undeniable,” Hughes writes.

However, the “limits of technology and exploiting sweet spots are becoming evident, however, as in some plays new wells are exhibiting lower productivities,” Hughes says. “More aggressive technology, coupled with longer horizontal laterals, allows each well to drain more reservoir area, but reduces the number of drilling locations and therefore does not necessarily increase the total recovery from a play—it just allows the resource to be recovered more quickly.”

Already, some shale plays have seen production plateau while others are in decline.

In short, Hughes says that of the 13 major shale plays analyzed in the PCI report, the EIA has “extremely optimistic” outlooks for nine of them. Of the remaining four, three of them are “highly optimistic,” and only one – the Woodford Play in Oklahoma – is ranked as “moderately optimistic.”

He notes that in some instances, the EIA’s forecasts are so optimistic that the production volumes exceed the agency’s own estimates for proven reserves plus unproven reserves. The EIA also assumes that every last drop of proven reserves is produced, along with a high percentage of unproven reserves by 2050.

“Although the ‘shale revolution’ has provided a reprieve from what just 15 years ago was thought to be a terminal decline in oil and gas production in the U.S.,” Hughes writes, “this reprieve is temporary, and the U.S. would be well advised to plan for much-reduced shale oil and gas production in the long term.”

Regardless of the geology, climate policy and waning investor interest will likely result in a lot of oil being left in the ground. Hughes says that the EIA’s figures are optimistic, even without considering any mandates to cut greenhouse gas emissions. “If U.S. energy policy actually reflected the need to mitigate climate change…the EIA’s forecasts for tight oil and shale gas production through 2050 make even less sense.”

Link to article: https://oilprice.com/Energy/Crude-Oil/The-EIA-Is-Grossly-Overestimating-US-Shale.html

By Nick Cunningham of Oilprice.com

 

 

Blue Sky Uranium Raises C$0.87M and Continues Exploration of Ivana Deposit; Newly Elected Argentine President Perceived as Positive for Mining

The Energy Report

Source: The Critical Investor for Streetwise Reports   11/10/2019

The Critical Investor looks into the uranium explorer’s work in Argentina and the political situation in the country with the recent election of a new president.

1. Introduction

It has been a quiet year so far for Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC), as the uranium oxide spot prices dropped off again after a run-up in H2 2018, rising almost 50%, only to pull back another 20% or so from these heights as can be seen at this chart, which can be found on the website of Cameco:

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Nonetheless, as one of the premier low cost development plays in the uranium space, Blue Sky managed to continue working on its Amarillo Grande project in the Rio Negro province in Argentina, and recently raised fresh cash. This time it managed to get C$0.87M from the markets, earlier in July it closed a C$0.68M private placement. This is impressive, as uranium sentiment is not positive, and investors are not sure what to think of the newly elected president Fernandez in Argentina. He isn’t all that bad according to various sources, more on this later.

As most exploration and drilling is very near surface, these new funds enable Blue Sky to continue working on its flagship Ivana project, which in turn could likely improve economics further. As a reminder, at a relatively (industry wide) low base case uranium oxide (U3O8) price of US$50/lb U3O8, the after-tax NPV8 is US$135.2 million and the IRR is 29.3%. These are very decent numbers as most competitors use US$60–65/lb U3O8 for their base cases. Initial capex is US$128.05 million, and the all-in sustaining costs (AISC) net of vanadium credits is US18.27/lb U3O8. This AISC is amongst the lowest in the industry. However, keep in mind that the entire project is not economic at this time as the long term (or also called contract) uranium oxide price is US$32/lb U3O8, as is any project worldwide except the ISR operations in Kazakhstan and Arrow of NexGen Energy, but it sits at the front of low cost projects and operations, and as such might be one of the uranium projects with the biggest leverage to the uranium price. Let’s have a look at the current state of affairs for Blue Sky Uranium.

All presented tables are my own material, unless stated otherwise.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise.

2. Financings

As mentioned, the company recently closed a private placement (PP), to be precise on October 23. Blue Sky raised aggregate gross proceeds of $868,999.95 through the non-brokered private placement, by the issuance of 5,793,333 units at a subscription price of $0.15 per unit. Each unit consisted of one common share and one transferrable common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share at $0.25 per share for two years from the date of issue.

I always like a non-brokered PP, as in this case management didn’t have to use the brokers, which in turn not always mobilize the most committed shareholders. Usually management taps into its own group of personally known investors, which almost guarantees longer term holders, and no warrant flippers. The subscription price of C$0.15 is also a decent premium compared to the closing price of C$0.11 that day:

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Share price; 1 year time frame

I could say something about the full warrant as existing shareholders probably preferred to see a half warrant or no warrant at all, but we have to be realistic here; Blue Sky did well at such a premium at this subdued sentiment. At least the warrant period is limited to two years, but there was no accelerated expiry clause for the warrants, as we will see at the July private placement which comes up next. The proceeds of the financing will be used for exploration programs on the projects in Argentina and for general working capital. This financing is subject to regulatory approval, and keep in mind that there is a four month hold period expiring on February 23, 2020.

So far about the October financing, Blue Sky Uranium also did a raise in July as mentioned. In this, again, non-brokered private placement, 4,528,182 units at C$0.15 were issued in two tranches, and aggregate gross proceeds of $679,227 were received by the company. Each unit consisted of one common share and again one full warrant. Each warrant will entitle the holder thereof to purchase one additional common share at $0.25 per share for three years from the date of issue. So far this is in line with the latest financing, although the exercise period is one year longer which is good.

Another addition neutralizing this is the accelerated expiry of the warrants. If the volume weighted average price for the company’s shares is $0.50 or greater for a period of five consecutive trading days, then the company may deliver a notice to the warrant holder that the warrants must be exercised within twenty days from the date of delivery of such notice, otherwise the warrants will expire at 4:30 p.m. (Vancouver time) on the twenty-first day after the date of delivery of the notice.

As can be seen in the price chart above, this round was done at no premium, full warrant, three year warrant exercise period combined with an accelerated expiry at C$0.50. I am not a fan of accelerated expiries, especially in juniors and even more especially in uranium juniors, as the upside potential is truly explosive as we have seen during other spikes in the uranium price, and this is the reason most investors are willing to invest in uranium in the first place in my view. Notwithstanding this, Blue Sky did well to raise this in a very difficult market at no discount, so it could continue with its exploration program for 2019, consisting of IP surveys and auger drilling. Blue Sky expects to have sufficient funds to last well into Q2 2020, but expects to raise more in order to fund RC drilling in 2020. But before I delve into exploration, let’s rehash developments for uranium itself.

3. Uranium

I’m not going to repeat the entire paragraph from my first article on Blue Sky Uranium, but will mention and update the most important items. Consensus is nowadays, that necessary pricing to bring a lot of Western production online could involve US$50/lb U3O8 levels, and maybe even higher, for various reasons. It is rumored by experts that for example Cameco’s McArthur River mine, the largest and highest grade single deposit uranium mine in the world, needs a complex, difficult and expensive expansion to mine the next phase, and this is only economic at US$50/lb. It is even suggested that it would be cheaper to buy and build Arrow, the Tier I deposit of NexGen Energy, and this seems valid on the longer term as Arrow appears to be much more profitable than McArthur River or Key Lake at the moment. But of course, as a development project with long permitting periods as a uranium mine, it can’t be switched on just like that. In the meantime, Cameco fulfills its delivery duties by buying in the spot market, buying which could reach as much as 20 million pounds U3O8 this year.

It is not the only one doing this, as for example traders, banks and hedge funds are buying uranium oxides left and right in order to speculate on future price increases. A new fund, Yellow Cake PLC, has an offtake agreement in place with KazAtomProm, which accounted for the buying of 8.1M lb U3O8 at the discounted price of US$21.01/lb U3O8 in 2018, and gives Yellow Cake the possibility, not the obligation, to buy large quantities for the next nine years, to the tune of US$100 million each year.

Prices of uranium are always, just like gold, subject of widespread sentiments and not the result of a healthy supply/demand mechanism, although the uranium markets are well known by the number of utilities (the nuclear power plants) in production, under construction, etc. Something that isn’t very well understood, however, but obviously key to demand, is the stockpiling by utilities, usually by fulfilling their long term contracts, like the Japanese appeared to be doing during the shutdown since 2011. Because of this, for a while the markets expected a huge stockpile to come on the market sooner or later, when it would be clear Japan would dismantle its nuclear reactors. This development didn’t pan out as we know now, and it is expected that Japanese utilities will enter the LT markets in a few years after they restarted. It is also expected that not all Japanese reactors will be restarted, so in my view there should be a lots and lots of Japanese stockpiles available for restarting utilities.

It is widely agreed upon that the growing net number of reactors will eventually generate increased demand, which would in turn create shortages based on current supply levels. However, this can take a few years to materialize.

Uranium oxide supply isn’t switched on in a short period of time, and an increase in demand by utilities can’t be met by the mining industry in time, and this is the catalyst all uranium investors are waiting for. It will probably take at least one year to have McArthur River and Rabbit Lake back online again, and the same or even longer goes for existing or new ISR operations of KazAtomProm. It recently said it could add 7M lb U3O8 of production annually by investing US$100 million many times over, but ISR is slow to ramp up, it takes about 18 months after the wells are in place. On a side note, it remains to be seen if these companies really can ramp up efficiently in this time frame, as we have seen that for example existing and producing lithium assets are ramping up to higher production rates much slower than anticipated. Whether this has technical reasons, pricing reasons or else remains to be seen, but I can’t rule out such developments with uranium either.

Besides this, there is spare capacity waiting in Australia (Olympic Dam [BHP], which will likely be expanded as soon as uranium contract prices improve meaningfully, and the Honeymoon Mine [Uranium One], which was closed in 2013 due to low prices, will be reopened again in that case) and possibly Kazakhstan, currently globally the largest producer. In Namibia there is the Langer Heinrich (Paladin Energy) mine waiting for better times, but it will be clear that new production capacity will take a lot of time. Besides this, the Chinese-owned Husab Mine is coming online this year.

But all these mines and projects have one thing in common: it takes time, to the tune of 1.5–2 years, before nameplate production is reached. And when the spot market has dried up because of all the buying by Cameco, etc., and utilities start buying, there is no time. Much has been made of the potential sale of current stockpiles of utilities, but most of these stockpiles are government owned and will not go back to the markets again. On an important side note: the ramping up production of Kazakhstan since 2005 at very cheap prices has effectively put most U.S. producers out of business. A large part of this Kazakh production went to China, which has massive stockpiles, accounting for more than half of total stockpiles worldwide.

According to the World Nuclear Association, global demand is expected to rise to 180M lb U3O8 in 2025, supply will be an estimated 140M lb U3O8 at the time, including restarted McArthur River, Key Lake and Kazatomprom mines. Six years is a long time of course, in the meantime the industry had to deal with another issue, the Section 232 Petition. The well-known proposal by Ur-Energy and Energy Fuels involving a 25% quota on domestic uranium was shot down by the U.S. government. President Trump denied his Secretary of Commerce the possibility of going forward with the proposal, as he seemed to deem current developments as too insignificant to take action:

“Currently, the country imports about 93% of its commercial uranium, compared to 85.8% in 2009,” Trump wrote. “The Secretary found that this figure is because of increased production by foreign state-owned enterprises, which have distorted global prices and made it more difficult for domestic mines to compete.

“At this time, I do not concur with the Secretary’s finding that uranium imports threaten to impair the national security of the United States as defined under section 232 of the Act. Although I agree that the Secretary’s findings raise significant concerns regarding the impact of uranium imports on the national security with respect to domestic mining, I find that a fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain is necessary at this time.”

This outcome was more or less expected, as opposed to the miners supporting the proposal stood the very powerful utilities sector, which didn’t like potentially higher uranium prices as a result of eventual quota. But I must say, to see the proposal making it all the way to the Secretary of Commerce, putting it on the desk of Trump, was impressive in itself as I didn’t see much viability in it. Canada and Australia account for almost 60% of U.S. uranium supply, and Kazakhstan delivers another 11%, so I don’t see a large dependence on countries like China or Russia. I had to revise my views on the position of Kazakhstan, which I viewed as relatively independent of Russia, because of being a NATO partner country

This might be true in a direct way, but indirectly the Kazatomprom facilities were built by Russia and served the Russian nuclear program for decades, and Russia still has enormous financial/business influence in the country with large investments, so although the Kazakh president might not be the best friend of Putin, I don’t expect him to act independently from Russia in this regard. Therefore, all actions by Kazatomprom must be seen in this light, and I believe now that they will do everything to gain world dominance in uranium production. They might have used the Chinese rare earth strategy, the parallels are remarkable.

What is the situation in Argentina these days regarding nuclear energy?

Argentina has three nuclear reactors generating about 5% of its electricity. Its current annual consumption is approximately 300 tonnes U3O8 (or 660,000 lb U3O8). The country’s first commercial nuclear power reactor began operating in 1974 and collectively the three plants produce 1667 MWe. The current reactors include a CANDU 6 and a Siemens design; the next two planned reactors are to be built by China National Nuclear Corporation. Additionally, five research reactors are operated by the National Commission of Atomic Energy (CNEA) and others.

Two further research reactors are under construction. The CAREM-25 nuclear reactor, which has been developed by CNEA with INVAP and others, since 1984, is a modular 100 MWt simplified pressurized water reactor designed to be used for electricity generation (27 MWe gross, 25 MWe net) or as a research reactor or for water desalination. The prototype will be followed by a larger version, possibly 200 MWe with potential to upscale to 300 MWe. Sites in Argentina and internationally are being considered for the CAREM-25. Argentina requires 100% importation of its uranium supply. As shown in Figure 19-1 below, sourced from the Mining and Energy Industry of Argentina, the 2015 price paid for uranium was more than double the international market price for uranium.

It doesn’t look like this situation will be solved anytime soon in Argentina, and provides an excellent environment for Blue Sky and the Grosso Group to negotiate with the government on long term contracts. Talking about Argentina, let’s have a quick look at the result of the elections.

4. New President for Argentina

On October 27, left wing politician Alberto Fernandez was elected as president of Argentina, and right beside him stood the one and only Christina Fernandez de Kirchner, coming in as the new vice president of the country. Foreign capital can’t be too happy about this development, and as anticipated, a turn in the federal government is almost certainly after the pro-business course of current and outgoing president Macri. The only problem for Macri was that he couldn’t turn around the economy of Argentina, and actually aggravated the situation.

This upcoming political change has already represented uncertainties for the Argentine economy and the Argentine peso has suffered a significant depreciation in the last two months, and it may continue for a while until new government is established. This kind of uncertainty however also represents a reduction in costs due to the depreciation, as long as this depreciation outscores inflation. This reduction could also compensate the anticipated increase in country risk to a certain degree. Nobody is waiting for another YPF nationalization debacle as Kirchner pulled off in 2012, but not all is lost as it is anticipated that Fernandez is more moderate.

According to this Mining.com article, during his campaign, Fernandez met with representatives from 24 mining companies with projects in the country and told them he considered mining an opportunity, rather than a problem. He also promised to revisit the country’s controversial glacier protection law, and said that his technical team, led by economist Guillermo Nielsen, is working on a regime to guarantee clear rules for 10 years within the natural resources sector. A large pipeline of projects is waiting for development, to the tune of US$29 billion. Fernandez seems to have developed an economic agenda which includes a 10 year growth plan for the mining industry, led by the lithium sector. This is somewhat of a surprise to me as lithium is very speculative and the relevant lithium projects aren’t anywhere close to a large part of this US$29 billion pipeline, but who knows.

Other articles (in Spanish) tuned in on how Fernandez recognizes the importance of mining and its exports, but also mentioning for example the province of San Juan as a guiding example, as this province always looked after the interests of local communities surrounding mining projects. Furthermore, Fernandez is looking to initiate a Minister of Mines as he sees mining as key in revitalizing the economy, a position to be filled by the current Minister of Mining at San Juan Province, Alberto Hensel.

Other plans to stimulate exports by mining are series of tax breaks and other fiscal stimuli, as Hensel did when he was in charge as provincial minister. Hensel also acknowledged that Argentina changed mining regulations and fiscal regimes far too often, resulting in foreign capital fleeing the country. He wants to change this. So it seems although Peronist and protectionist by nature, the new government seems to understand they have to do things differently this time, very different. Let’s wait and see.

At provincial level, the Governor of Rio Negro was already elected few months ago and the actual governing party will continue for another four years. Therefore, the provincial supports to the sector is not expected to be modified. In fact, elected Governor has strongly mentioned the support to non-conventional O&G production and mining development.

On a closing note for politics before I switch to an update of exploration programs: Blue Sky Uranium also has numerous projects in the Chubut province. Situated directly south of Rio Negro, Chubut hosts several uranium deposits; however, none are currently in production and the provincial government has enacted restrictions against open-pit mining. The company’s projects in this area, Sierra Colonia, Tierras Coloradas, Regalo and Cerro Parva, comprising more than 150,000 hectares of 100% controlled mining properties, are shelved now because of this. Chubut is known as one of two anti-mining provinces that didn’t sign the new Macri normalization policy, which aimed at having a universal mining policy for every province in Argentina. Chances are that the new government can make changes in this regard.

5. Exploration Programs

The exploration program continues on past recognized exploration targets located along a 25km-long corridor northwards of Ivana deposit, named Ivana North and Ivana Central, in order to increase the existing Inferred resource of 22.7M lbs U3O8 as much as possible:

The strategy includes expansion of the known resources at Ivana deposit, and find more deposits near surface similar to Ivana deposit following the geological regional 145km trap, or redox front, where examples worldwide (as at Kazakhstan) composed of several deposits (4 of the top 10 mines are at the same district in Kazakhstan, and Cameco estimated the regional resource potential in 250 Mlb @ 500ppm U3O8). The exploration efforts were focused at Ivana Central until now, and included auger drilling and IP-survey. This target was developed based on re-assessment of the diamond drill cores drilled back in 2013 in JV with Areva. This assessment identified geological and geochemical signatures indicating the potential presence of multiple blind mineralized horizons similar to the primary mineralization at Ivana deposit, where the shallower horizon is potentially located at 30m in depth. According to management, the aim of the auger drilling is to catch subtle radiometric or geochemical anomalies confirming the presence of a blind system and its potential location. Initial auger holes helped, combined with previous exploration results, to locate a 6km-long IP testing survey, designed to detect the presence of pyrite or organic matter that may be interpreted as the trap for uranium, carried by oxidized waters in the past and generated an accumulative economic deposit. The original test was extended to 7.65km:

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As a result, the IP detected two chargeability anomalies (pyrite and organic matter are chargeable), one to the west that may be interpreted as the expected horizon at 30m in depth, and another to the east located deeper probably at 40–50m from surface. Both anomalies are open, and new IP-survey lines are expected to be completed in November.

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The Ivana North area was first recognized back in 2010 as results of the airborne radiometric survey and follow up exploration prospecting. The initial sampling works done at Ivana North had already detected the presence of uranium/vanadium mineralization similar to the mineralization later recognized where the Ivana deposit is located today, at 20km to the south. The target area covering 10x6km radiometric and follow up sampling anomalies is planned to be covered by geophysics and auger drilling in order to adjust later RC drilling program. The works in this area are expected to be launched in the next weeks with the first IP-testing survey line followed by auger drilling.

Once completed both programs, the company expects to launch a 4,500m RC drilling program in different phases at both targets. This program is expected to be initiated at the beginning of 2020, and the company is looking to raise more money to fund it, more or less following the budget estimates in the latest resource report:

The goal is to demonstrate that Blue Sky could actually control an entire uranium/vanadium district, with potential to comprise multiple deposits with significant upside potential for tonnage and economics.

As a reminder, if Blue Sky Uranium indeed manages to delineate an estimated 100M lb U3O8 and a useful amount of V2O5, it isn’t unrealistic in that case to double or even triple production capacity and double LOM. In this case some economies of scale could kick in, and despite the expected lower average grade and increased capex, the post-tax NPV8 should be able to come in at least around US$300–350M, with the IRR roughly estimated at 27–28% as well, maybe higher depending on the amount of higher grade ore they could delineate in the future. The company is proceeding with the expansion of the current resource and setting up work programs for the upcoming Pre Feasibility Study (PFS), and for this it is not allowed to include Inferred resources, so the entire resource needs to be converted first. Fortunately, the continuity of mineralization seems to be excellent according to management. Actual spacing of the drilling pattern allows to convert most of the resources into indicated resources. They were not converted yet by the QP because the metallurgical results were received after the resource estimation. The budget presented above includes the drilling costs to convert all actual resources into indicated (4000m).

6. Conclusion

Blue Sky Uranium managed to raise another C$0.87 million after raising C$0.68 million back in July, which is impressive in a subdued market for uranium, and mining in general except gold producers. It enabled the company to proceed with IP surveys and auger drilling, defining drill targets for a new RC drill campaign early next year. At the same time, Alberto Fernandez was elected as the new president for Argentina, and fortunately, despite his left wing Peron style protectionist/socialist background, he seems to be quite pro-mining. He not only recognized the importance and potential of the mining industry for revitalizing the economy, but is also planning on having a new Ministry of Mines, for which his Prime Minister candidate already has proven plans based on fiscal stimulation in mind. So although Kirchner is back as a vice president this time, it seems Fernandez is much more realistic with regard to mining than Macri and Kirchner combined. Very surprising. Let’s hope it all pans out well for Blue Sky Uranium.

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website http://www.criticalinvestor.eu to get an email notice of my new articles soon after they are published.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

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Disclaimer:

The author is not a registered investment advisor, and has a long position in this stock. Blue Sky Uranium is a sponsoring company. All facts are to be checked by the reader. For more information go to www.blueskyuranium.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

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( Companies Mentioned: BSK:TSX.V; BKUCF:OTC,
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Crude Going Down Again

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Early in another November week, the oil market is going down againб but it is evident that investors just can’t decide on a more promising direction on a global scale. Currently, Brent is trading at 61.81 USD.

The statistics published by Baker Hughes last Friday showed that the Oil Rig Count in the USA reached the lowest level over the previous 31 months: the indicator lost 8 units and now equals to 684. The total number of rigs lost 7 units, down to 817 overall. As a result, the actual reading is close to April of 2017. Since the beginning of 2019, the indicator has dropped 23%, but without influencing the total oil extraction as it has added 8% over the same period.

The latest numbers showed that the daily oil output in the USA stopped at 12.6M. The EIA Crude Oil Stocks Change is increasing (+8M barrels over a week by November 8th).

All fine and dandy, and the reason for oil stocks growth can be easily explained by seasonality, but market players are anxious as they continue following the trade conflict between the USA and China. Earlier, US President Donald Trump said that he wasn’t ready yet to consider the possibility of completely removing import tariffs on Chinese goods introduced in the past.

As we can see in the H4 chart, Brent is forming the fifth structure of Flag correctional pattern. Today, the pair may fall to break 61.83 and then continue trading downwards with the target at 60.60 to complete the correction. After that, the instrument may form a reversal pattern for one more ascending structure towards 64.40. However, the “correction” scenario may no longer be valid if the price grows to break 63.00. in this case, the market may resume trading inside the uptrend to reach 64.40б at least. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving downwards to reach 0. Breaking it may boost the downtrend.

In the H1 chart, Brent is consolidating around 62.10. Possibly, today the pair may form a new descending structure towards 61.83 and then start another growth to reach 62.43. After that, the instrument may fall to reach 61.21, thus forming a wider consolidation range between 62.43 and 61.21. If later the pair breaks this range to the downside, the instrument may continue falling towards 60.60; if to the upside – cancel the correction. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving below 50. Practically, the indicator suggests that the instrument is moving in the middle of the fifth correctional structure. The indicator is expected to start another decline to enter the “oversold area” below 20.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

 

The 10 Highest Paying Jobs In Oil & Gas

By OilPrice.com

Make no mistake: Oil and gas companies may be doing some serious cost-cutting and slimming-and-trimming to stay competitive after the shale boom binge, but when it comes to employment, it’s still one of the best industries to hit up for a job.

Jobs are booming, just as much as U.S. oil and gas production is.

US oil production has increased from 11.7 million bpd at the start of 2019 to 12.6 million by the end of October, according to the Energy Information Administration (EIA). Natural gas production has risen as well, to 99.1 Bcf/d at the end of October—95 Bcf/d of which is from dry natural gas—up from 91.3 Bcf/d this time last year for total US natural gas production.

Those gains have translated into more oil and gas industry jobs.

US Oil and Gas Employment

The United States Traditional Energy and Energy Efficiency Sectors in 2018 employed 6.7 million Americans in 2018, according to the US Energy and Employment Report 2019, with nearly 1.5 million directly employed by the oil and gas industry, and another 1.2 million workers employed by the power generation sector, which includes all types of power generation, including oil and gas.

 

Employment in the oil and gas extraction and support services, specifically, was at its highest level in 2018 since the fall of 2014—the next most recent high.

And those jobs? None too shabby if you’re interested.

America’s energy independence push has resulted in a new high for US oil and gas workers. In fact, the energy and utility sectors have the highest median salary of any industry in the S&P 500.

Who’s Who in Energy

If you’re looking to make some cash in the oil and gas industry, you won’t have to look far. The oil industry is having a heck of a time recruiting a skilled workforce, and ExxonMobil, Phillips66, and Anadarko—all Texas based—have been more than willing to pony up the cash.

ExxonMobil’s median pay, according to a Wall Street Journal analysis, came in at $171,375. Phillips66’s median pay was $196,407, according to a Wall Street Journal survey.

Compared to America’s overall median wage for advanced degree holders of $77,324, that’s downright generous. But what oil and gas jobs are the best?

Top Paying Oil and Gas Jobs

Pay isn’t everything, but it sure is something. And if you can’t woo employees with good corporate citizenship or your climate friendliness, you had better pony up the cash. So what jobs are oil and gas companies sinking the most money into in its quest to acquire good talent?

The list of annual salaries below, developed from the Global Talent Energy Index, is based on employees with six years of experience in the oil and gas industry:

#10 Production Engineer $125,600. Production engineers mostly carry petroleum engineering degrees and are responsible for designing and selection well equipment to get it to the production stage post-drilling. They also monitor the well while it is flowing to make sure the well is efficient and still commercially viable.

#9 Project Engineer $126,846. Project Engineers ensure that the design, construction and major maintenance projects are safely completed, and completed within budget. They review progress reports and proposed construction changes, as well as monitoring and communication project progress to stakeholders.

#8 HSE Manager $126,874. Health, Safety, and Environmental managers develop and implement organizational safety programs. They review and keep updated HSE policies, as well as conduct risk assessments and create precautionary measures. Requirements include a BA in occupational health, safety management or environmental science.

#7 Mechanical Engineer $127,828. Mechanical engineers support plant equipment, and design, develop, install, and maintain equipment that is used for processing oil and gas, with a focus on safety, reliability, quality, and sustainability.

#6 Geophysicist $128,965. A geophysicist studies the physical aspects of the earth in order to determine what lies beneath the surface of the earth.

#5 Drilling Engineer $129,944. This position manages rig staff and is responsible for assessing and maintaining wells, ensuring safety measures are implementing, and is generally responsible for the financial and technical operations of drilling for oil or gas.

#4 Reservoir Engineer $137,156. Reservoir Engineers draw on geology and fluid mechanics knowledge to find petroleum in underground reservoirs. They also assess the amount of petroleum reserves underground. Typically they have a degree in petroleum engineering.

#3 Construction Manager $145,000. CMs are responsible for delivering construction in compliance with HSE requirements and the schedule. They work closely with the project manager in leading teams to manage and control construction projects.

#2 Drilling Supervisor $148,476. Drilling supervisors are in charge of the drill operations and make sure drilling is completed on time. Unlike most of the other top jobs in the oil and gas industry, drilling supervisors often do not need a bachelor’s degree. However, years of experience are usually required. Some employers prefer degrees in drilling technology or mechanical engineering.

#1 Project Manager $157,795. The top paying job in the oil and gas industry is the Project Manager, and it’s no wonder. The PM is tasked with ensuring that an entire project from start to finish is on track, in budget, to specifications, and within safety guidelines. The PM also ensures that communication is flowing between groups. Essentially, the PM is the glue that holds an entire operation together—and companies are willing to pay for the best.

 

Top Paying Petrochemicals Jobs

The petrochemicals industry doesn’t get as much love as the oil and gas industry, but it is said to be the oil and gas industry’s future. Like the traditional oil and gas industry, petrochemicals are a booming business, although the salaries are not quite as high.

The top paying job in petrochemicals is that of the Process Engineer, which pays on average for a six-year veteran $123,400 per year. Quality Assurance Manager comes in at #2, which pays $122,190 per year. Other top jobs in the petrochemicals sector are Construction Manager (#3) at $117,856 per year, Mechanical Engineer (#4) at $111,630, and Chemical Engineer (#5) $98,636.

Top Paying Jobs in Renewables Sector

The renewables sector has something the other energy-related jobs don’t: they are appealing to the millennial generation. And as such, they tend to have an easier time with talent acquisition of doe-eyed job seekers looking to be excellent citizens.

And it’s good that they feel good about their jobs, because on average, they’re going to make less money.

The top paying job in the renewables sector is Construction Manager, at $118,730. The number two slot is held by the HSE Manager at $102,997, followed by Mechanical Engineer at $92,822.

Top Paying Jobs in the Nuclear Sector

We hear a lot about oil and gas here in the United States, but the US is also the world’s largest producer of nuclear power, according to the World Nuclear Association, producing more than 30% of the world’s total nuclear generation of electricity.

About 20% of the United States’ total electrical output comes from nuclear power, and despite a near 30-year slump for new builds, two new nuclear facilities are now in the works. In total, the US has 98 functioning nuclear power reactors spread across 30 states.

But the nuclear sector may find it difficult to attract new talent. The reputation the segment has, the technical nature of the work required, and the fact that the skills needed are specific to just nuclear are all working against the industry.

But there are great opportunities here, with the current nuclear workforce over the age of 55 representing a third of all workers in this sector, leaving the door open for the next generation—if they are interested.

So how do jobs in this segment measure up? Somewhere near the bottom of the pile, it would seem, but salaries are on the rise.

The top paying job in the nuclear sector is that of the Construction Manager at $118,565. Coming in second is the Nuclear Engineer, at $108,250 per year, with Electric Engineer in fourth place at $103,160.

Going forward, IHS predicts that by 2025, just the unconventional oil and natural gas value chain and energy-related chemicals activity will support 3.9 million jobs.

The United States accounted for 98% of all global oil production growth in 2018, and the EIA is expecting crude oil production in the US to reach 13.2 million barrels per day next year. Add to that the fact that the US is expected to retain its spot as the number one oil consumer of the world, US job growth for the oil and gas sector is expected to see more gains going forward.

Link to article: https://oilprice.com/Energy/Energy-General/The-10-Highest-Paying-Jobs-In-Oil-Gas.html

By Julianne Geiger for Oilprice.com

For Skyharbour Resources, the Answers May Lie in the Basement

The Energy Report

Source: Streetwise Reports   11/07/2019

The company is moving ahead with uranium exploration in the high-grade Athabasca Basin amid a changing supply and demand paradigm.

Uranium development company Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB) holds six projects in the Athabasca Basin in northern Saskatchewan, home of the highest grade depository of uranium in the world.

The company has been actively exploring and drilling the flagship Moore Lake project over the last several years and is planning an upcoming program that holds the potential to be a key catalyst in the near term. It acquired the project from the company’s largest shareholder and strategic partner, Denison Mines. Denison CEO David Cates sits on Skyharbour’s board.

For its other five projects, Skyharbour employs prospect generation, bringing in partner companies to advance and fund exploration. Currently Skyharbour has deals on two projects. Orano, France’s largest uranium mining and nuclear company, is spending up to $8 million to earn up to a 70% interest on the Preston project. That project is located next to Fission Uranium and Nexgen’s high-grade properties. Plans for a 2020 exploration program are expected to be announced shortly. “Orano has been pretty aggressive with the exploration carrying out several drill and work programs over the past few years. They are a large company with a long history in the Athabasca Basin making them a great strategic partner to have,” Skyharbour CEO Jordan Trimble told Streetwise Reports.

Skyharbour’s other partner is Azincourt Energy, which is smaller, and in a 2017 deal, the company can earn in 70% of the East Preston project by spending $3.5 million. Azincourt recently announced a 2,500-meter drill program slated to start later this year or early next year. “Azincourt has conducted a lot of reconnaissance work over the last few years to get these targets. So it’s an important program for both them and us,” Trimble stated.

At Skyharbour’s flagship, high-grade Moore Lake project, the company plans on initiating a 2,500-meter drill program early in the new year. “This could very well be our most important drill program on the project and the reason for that is we are now primarily testing basement-hosted targets that have been refined by new geophysical techniques,” Trimble said. “When you look at most of the major discoveries that have been made recently in the Athabasca Basin—Denison, NexGen, Fission—these are all high-grade uranium deposits that are hosted in the underlying basement rocks.”

Historically, a lot of the drilling and exploration was focused in the overlying Athabasca sandstone or at the unconformity, the unconformity being the border between the sandstone and the basement rock. But now the basement rocks are showing some of the highest uranium grades.

“What’s exciting about Moore Lake and the upcoming drill program is there was very little historical drilling and work done testing the basement targets, which host the feeder zones. This is the source of the high-grade mineralization, up to 21% U3O8, that we have at our Maverick zone, which is hosted in the sandstone and at the unconformity,” Trimble said.

One of the new techniques Skyharbour has employed is geophysics using drones, which gives the company more pinpoint accuracy of its specific targets. Not only is it less expensive than flying fixed wing airplanes or helicopters, it gives better images because drones can fly closer to the tree line and provides tighter line spacing. “We are looking for cross-cutting structures that have broken up the main corridor and have allowed the fluids to come up,” Trimble stated.

“Thanks to the geophysics, and further geological analysis, we now have a much more accurate idea of the zones we want to drill into,” Trimble noted. The company has three targets, with the main one being the basement rock to the east of the Maverick zone, to follow up on one of the last holes the company drilled in the previous program, which intercepted high-grade mineralization.

“We think this drill hole just nicked the top of a much larger, higher-grade zone, so we are going to drill down plunge,” Trimble explained.

Another target is further to the northeast on the same corridor where geophysics have identified another cross cutting structure. The third target is in the Otter Grid, which is a completely separate corridor where Skyharbour discovered uranium mineralization earlier in the year.

Skyharbour is led by an experienced team. President and CEO Jordan Trimble is an entrepreneur in the resource industry, having worked with several companies, including Bayfield Ventures, which was acquired by New Gold in 2014. Jim Pettit, the company’s chairman, was the CEO of Bayfield and has over 30 years of experience in the resource sector. Director Richard Kusmirski, the head geologist, has over 40 years of exploration experience in North America and overseas, and directed Cameco’s uranium exploration projects in the Athabasca Basin as exploration manager. Director David Cates serves as the president and CEO of Denison Mines and Uranium Participation Corp.

Skyharbour is well structured with 64 million shares outstanding and several large, notable shareholders in addition to management and insiders include Denison Mines, the KCR Fund, Sachem Cove and OTP Fund Management.

Skyharbour is conducting exploration against the backdrop of the Section 232 ruling, which was brought by U.S. uranium producers that asked for quotas or other protections for the U.S. uranium mining industry. In July, President Trump declined to impose any trade measures, but set up a Nuclear Fuel Working Group to examine the current state of nuclear fuel production in the U.S. The Working Group is due to present its report by mid-November, but the U.S. government has no obligation to enact any of its recommendations.

“The Section 232 investigation and ruling process has created a lot of uncertainty in the uranium market,” Trimble stated. “There are several U.S. nuclear utility companies that have been putting off contracting until this Section 232 and Working Group overhang is cleared up. Many of the current long-term contracts are at higher prices of $40 to $70/lb of uranium so there is an impasse right now between the producers and buyers given the current low spot price of $24/lb. Uranium miners won’t sign long-term contracts at today’s low, uneconomic prices, and utility companies are reluctant to sign contracts at higher prices right now. But I expect that will change.”

“With the highly anticipated decision of the Section 232 investigation, and the price of uranium in the spot market rising from the low $20s to $29/lb, shares of uranium companies rose. But when no action was taken, and the spot price pulled back, share prices have fallen,” Trimble explained.

“The 232 decision was perceived by investors who had come into the market over the last year and a half as a negative outcome, and the price of most uranium stocks have pulled back. But something to note is that the actual outcome for non-U.S. companies in the long run is positive, because it means we aren’t going to have millions of pounds of forced production coming out of the U.S. over the next five to seven years,” Trimble stated.

Furthermore, many uranium producers have cut supply because they cannot produce profitably at current uranium prices. Cameco has shuttered its McArthur River Mine and is buying large quantities of uranium in the spot market.

“Cameco needing to buy uranium in the spot market to make up for lost supply at McArthur is one of the most prominent potential catalysts in the near term,” Trimble said. “Cameco’s purchases in 2018 helped propel the spot price higher and I expect to see similar price action in the coming months.”

A deficit is forming in uranium’s supply-demand equation. “There’s over 192 million pounds of demand with only about 136 million pounds of primary mine supply, so we’re eating away at secondary supply very quickly right now,” Trimble stated.

The World Nuclear Association, at its September symposium in London, released its bi-annual report that had some bullish takeaways for uranium miners. For the first time since Fukushima, the report projected notable increasing demand across all three of its upper, mid and lower cases.

“With climate change as such hot topic issue globally, it’s important to realize that nuclear energy is complementary with renewable energy sources and will play a very important role in solving this problem going forward. It’s the only source of baseload, CO2 emission-free, low-cost, reliable electricity. It’s not intermittent electrical generation like wind and solar,” Trimble stated.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Skyharbour Resources. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Skyharbour Resources, a company mentioned in this article.

( Companies Mentioned: SYH:TSX.V; SYHBF:OTCQB,
)

WTI Crude Oil Speculators upped their bullish bets for 4th week

November 9th – By CountingPips.comReceive our weekly COT Reports by Email

WTI Crude Oil Non-Commercial Speculator Positions:

Large energy speculators raised their bullish net positions in the WTI Crude Oil futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of WTI Crude Oil futures, traded by large speculators and hedge funds, totaled a net position of 406,140 contracts in the data reported through Tuesday November 5th. This was a weekly change of 22,793 net contracts from the previous week which had a total of 383,347 net contracts.

The week’s net position was the result of the gross bullish position (longs) rising by 12,784 contracts (to a weekly total of 565,026 contracts) while the gross bearish position (shorts) dropped by -10,009 contracts for the week (to a total of 158,886 contracts).

Crude oil speculative positions gained for a fourth straight week and have now risen by +51,055 contracts over that four week period. The current bullish level is now back over the +400,000 net contract threshold for the first time in six weeks. Overall, the crude position has remained in bullish territory for a total of 548 weeks, dating back to May 5th of 2009.

WTI Crude Oil Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -405,946 contracts on the week. This was a weekly shortfall of -21,769 contracts from the total net of -384,177 contracts reported the previous week.

WTI Crude Oil Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the WTI Crude Oil Futures (Front Month) closed at approximately $57.23 which was an increase of $1.69 from the previous close of $55.54, according to unofficial market data.

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

Article By CountingPips.comReceive our weekly COT Reports by Email

For Skyharbour Resources, the Answers May Lie in the Basement

The Energy Report

Source: Streetwise Reports   11/07/2019

The company is moving ahead with uranium exploration in the high-grade Athabasca Basin amid a changing supply and demand paradigm.

Uranium development company Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB) holds six projects in the Athabasca Basin in northern Saskatchewan, home of the highest grade depository of uranium in the world.

The company has been actively exploring and drilling the flagship Moore Lake project over the last several years and is planning an upcoming program that holds the potential to be a key catalyst in the near term. It acquired the project from the company’s largest shareholder and strategic partner, Denison Mines. Denison CEO David Cates sits on Skyharbour’s board.

For its other five projects, Skyharbour employs prospect generation, bringing in partner companies to advance and fund exploration. Currently Skyharbour has deals on two projects. Orano, France’s largest uranium mining and nuclear company, is spending up to $8 million to earn up to a 70% interest on the Preston project. That project is located next to Fission Uranium and Nexgen’s high-grade properties. Plans for a 2020 exploration program are expected to be announced shortly. “Orano has been pretty aggressive with the exploration carrying out several drill and work programs over the past few years. They are a large company with a long history in the Athabasca Basin making them a great strategic partner to have,” Skyharbour CEO Jordan Trimble told Streetwise Reports.

Skyharbour’s other partner is Azincourt Energy, which is smaller, and in a 2017 deal, the company can earn in 70% of the East Preston project by spending $3.5 million. Azincourt recently announced a 2,500-meter drill program slated to start later this year or early next year. “Azincourt has conducted a lot of reconnaissance work over the last few years to get these targets. So it’s an important program for both them and us,” Trimble stated.

At Skyharbour’s flagship, high-grade Moore Lake project, the company plans on initiating a 2,500-meter drill program early in the new year. “This could very well be our most important drill program on the project and the reason for that is we are now primarily testing basement-hosted targets that have been refined by new geophysical techniques,” Trimble said. “When you look at most of the major discoveries that have been made recently in the Athabasca Basin—Denison, NexGen, Fission—these are all high-grade uranium deposits that are hosted in the underlying basement rocks.”

Historically, a lot of the drilling and exploration was focused in the overlying Athabasca sandstone or at the unconformity, the unconformity being the border between the sandstone and the basement rock. But now the basement rocks are showing some of the highest uranium grades.

“What’s exciting about Moore Lake and the upcoming drill program is there was very little historical drilling and work done testing the basement targets, which host the feeder zones. This is the source of the high-grade mineralization, up to 21% U3O8, that we have at our Maverick zone, which is hosted in the sandstone and at the unconformity,” Trimble said.

One of the new techniques Skyharbour has employed is geophysics using drones, which gives the company more pinpoint accuracy of its specific targets. Not only is it less expensive than flying fixed wing airplanes or helicopters, it gives better images because drones can fly closer to the tree line and provides tighter line spacing. “We are looking for cross-cutting structures that have broken up the main corridor and have allowed the fluids to come up,” Trimble stated.

“Thanks to the geophysics, and further geological analysis, we now have a much more accurate idea of the zones we want to drill into,” Trimble noted. The company has three targets, with the main one being the basement rock to the east of the Maverick zone, to follow up on one of the last holes the company drilled in the previous program, which intercepted high-grade mineralization.

“We think this drill hole just nicked the top of a much larger, higher-grade zone, so we are going to drill down plunge,” Trimble explained.

Another target is further to the northeast on the same corridor where geophysics have identified another cross cutting structure. The third target is in the Otter Grid, which is a completely separate corridor where Skyharbour discovered uranium mineralization earlier in the year.

Skyharbour is led by an experienced team. President and CEO Jordan Trimble is an entrepreneur in the resource industry, having worked with several companies, including Bayfield Ventures, which was acquired by New Gold in 2014. Jim Pettit, the company’s chairman, was the CEO of Bayfield and has over 30 years of experience in the resource sector. Director Richard Kusmirski, the head geologist, has over 40 years of exploration experience in North America and overseas, and directed Cameco’s uranium exploration projects in the Athabasca Basin as exploration manager. Director David Cates serves as the president and CEO of Denison Mines and Uranium Participation Corp.

Skyharbour is well structured with 64 million shares outstanding and several large, notable shareholders in addition to management and insiders include Denison Mines, the KCR Fund, Sachem Cove and OTP Fund Management.

Skyharbour is conducting exploration against the backdrop of the Section 232 ruling, which was brought by U.S. uranium producers that asked for quotas or other protections for the U.S. uranium mining industry. In July, President Trump declined to impose any trade measures, but set up a Nuclear Fuel Working Group to examine the current state of nuclear fuel production in the U.S. The Working Group is due to present its report by mid-November, but the U.S. government has no obligation to enact any of its recommendations.

“The Section 232 investigation and ruling process has created a lot of uncertainty in the uranium market,” Trimble stated. “There are several U.S. nuclear utility companies that have been putting off contracting until this Section 232 and Working Group overhang is cleared up. Many of the current long-term contracts are at higher prices of $40 to $70/lb of uranium so there is an impasse right now between the producers and buyers given the current low spot price of $24/lb. Uranium miners won’t sign long-term contracts at today’s low, uneconomic prices, and utility companies are reluctant to sign contracts at higher prices right now. But I expect that will change.”

“With the highly anticipated decision of the Section 232 investigation, and the price of uranium in the spot market rising from the low $20s to $29/lb, shares of uranium companies rose. But when no action was taken, and the spot price pulled back, share prices have fallen,” Trimble explained.

“The 232 decision was perceived by investors who had come into the market over the last year and a half as a negative outcome, and the price of most uranium stocks have pulled back. But something to note is that the actual outcome for non-U.S. companies in the long run is positive, because it means we aren’t going to have millions of pounds of forced production coming out of the U.S. over the next five to seven years,” Trimble stated.

Furthermore, many uranium producers have cut supply because they cannot produce profitably at current uranium prices. Cameco has shuttered its McArthur River Mine and is buying large quantities of uranium in the spot market.

“Cameco needing to buy uranium in the spot market to make up for lost supply at McArthur is one of the most prominent potential catalysts in the near term,” Trimble said. “Cameco’s purchases in 2018 helped propel the spot price higher and I expect to see similar price action in the coming months.”

A deficit is forming in uranium’s supply-demand equation. “There’s over 192 million pounds of demand with only about 136 million pounds of primary mine supply, so we’re eating away at secondary supply very quickly right now,” Trimble stated.

The World Nuclear Association, at its September symposium in London, released its bi-annual report that had some bullish takeaways for uranium miners. For the first time since Fukushima, the report projected notable increasing demand across all three of its upper, mid and lower cases.

“With climate change as such hot topic issue globally, it’s important to realize that nuclear energy is complementary with renewable energy sources and will play a very important role in solving this problem going forward. It’s the only source of baseload, CO2 emission-free, low-cost, reliable electricity. It’s not intermittent electrical generation like wind and solar,” Trimble stated.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Skyharbour Resources. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Skyharbour Resources, a company mentioned in this article.

( Companies Mentioned: SYH:TSX.V; SYHBF:OTCQB,
)

Q3/19 Active, 2020 Outlook Positive for Canadian Oil Company

The Energy Report

Source: Streetwise Reports   11/06/2019

The producer’s Q3/19 financial and operating results are reviewed in an iA Securities report.

In an Oct. 31 research note, iA Securities analyst Michael Charlton reported that Whitecap Resources Inc.’s (WCP:TSX) Q3/19 production was a beat and its new joint venture adds potential upside.

In Q3/19, Whitecap produced about 68,255 barrels of oil equivalent per day (68,255 boe/d), which surpassed iA Securities’ estimate and was within guidance, Charlton noted. This resulted from Whitecap spending less capital than expected. The company is on pace to meet its average annual production of 70,000–72,000 boe/d with capital spending at about $400 million.

“The quarter was active as Whitecap drilled 104 (89.9 net) wells, advancing all its core areas and enhancing and expanding its assets to maximize shareholder value, supportive of its long-term dividend and growth model,” Charlton commented.

As for Q3/19 cash flow, it was about $154.3 million, or $0.37 per share, reflecting a sequential decrease of about 12% “but tight (within 1%) to our forecasts,” indicated Charlton. This resulted from, one, lower realized prices of $52.76 per barrel of oil equivalent (boe), down about 10% from Q2/19. Lower netbacks was a second contributor. They dropped by about 15% to $27.92 per boe due to reduced realized prices and slightly higher operating and transportation costs.

Looking forward, Whitecap’s 2020 budget is between $360 and $380 million, annual production guidance is about 71,000–72,000 boe/d and plans are to drill about 150 wells, Charlton pointed out. “With the 2020 capital budget set, Whitecap remains well positioned to post modest production growth and free cash flow, which is anticipated to be split between debt reductions and a return of capital to shareholders,” he wrote.

Finally, Charlton summarized Whitecap’s recent joint venture with a private Montney exploration firm. During the two-year earn-in period, Whitecap will garner up to a 65% working interest in 34 (21.5 net) sections in the oil window of the Montney with about 144 possible drilling locations. After the earn-in, the company will operate about 88% of the lands and have a 65% working interest in those as well as a 50% working interest in the lands it will not operate.

IA Securities has a Strong Buy recommendation and a target price of CA$7.75 per share on Whitecap Resources, whose stock is currently trading at about CA$4.05 per share.

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Disclosures from iA Securities, Whitecap Resources Inc., Research Update, October 31, 2019

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

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The Industrial Alliance Securities Inc. research analyst(s) who cover the issuer discussed, members of the research analyst’s household, research associate(s) or other individual(s) involved directly or indirectly in producing this report: a. have a long position in its common equity securities.

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( Companies Mentioned: WCP:TSX,
)

Where is the Top for Natural Gas?

By TheTechnicalTraders.com

We wrote a very telling research article on October 24th, 2019.  We never published it because we had other articles scheduled to be published over the next few weeks in the queue and because our subscribers get our trade alerts before the general public. At this point, we are sharing that past article as well as some current research for Natural Gas that should be very interesting to you.

Pay very close attention to the original October 24th article, below, and our prediction that the $2.75 to $2.85 level would be a likely target for the upside price rally from the basing level below $2.30.  Currently, Natural Gas is trading at $2.87 – reaching our initial target level.

If our research is correct, strong demand and limited supply globally may push Natural Gas well above the $3.20 to $3.40 level after a very brief pause happens near $3.00.  In fact, Natural Gas may be getting ready to rally past 2018 highs ($4.93) if the situation presents itself for such an incredible price rally.  What would it take for a rally like that to happen?  Much stronger demand for natural gas because of an early, extreme winter and extended global demand.

Price reacts to supply/demand imbalances.  In this case, if the demand far exceeds the supply capacities headed into the end of 2019, we could easily see Natural Gas rally above $4.00 very quickly.  Could it rally even higher and take out the $5.00 level?  Absolutely it could if the proper dynamics continue related to supply and demand globally.

Current Daily Natural Gas Chart

Remember to read the link from October 5th.  We’ve been warning of this move for more than 60+ days and have authored multiple research posts attempting to keep our followers aware of this setup.  This trade setup was telegraphed for us many months ago.  All you had to do was follow our research and stay aware of the trends as this momentum base setup in October near $2.25.

Natural Gas moved higher by nearly 2% on October 24th as our researchers predicted nearly a month ago.  This incredible momentum base below $2.30 seems to be a very strong support level for Natural Gas.  We believe this next rally may be bigger than the last rally which reached a high near 2.70.  Our Fibonacci price modeling system is suggesting a target price of $2.95 to confirm a new upside price trend.  This means the price would have to rally more than +26.5% from current levels to confirm a potentially much bigger upside price move.  Can you imagine seeing Natural Gas climb to above $4.50 again – like last year?

Near the end of October 2018, Natural Gas began an upside price move that really excited investors.  The first upside price leg began in mid-September, near $2.75 and rallied to a level near $3.35 – a +21.6% upside price move.  After a brief 12 to 15 day pause, another price rally began in early November 2018 near $3.23 and continued very aggressively over the next 11+ days to rally up to $4.93 – a +57% rally.

We issued a natural gas trade using UGAZ to members and this week we locked in 38.7% profit on a portion of our position and there is still a lot of upside potential left.

Is the same type of price advance could be setting up for an early November price rally from the $2.30 level to somewhere above $3.50?  This would result in a +50% price rally from recent lows without using any leverage which would be just amazing.

October 5, 2019: NATURAL GAS RELOADS FOR ANOTHER PRICE RALLY

Previous Natural Gas Forecast Daily Chart

Our proprietary Fibonacci price modeling system is suggesting the $2.95 price level is critical for any further upside price action to continue above $3.00.  The price must cross above the $2.95 level on a strong closing price basis before we could consider any higher price levels to become valid.  Our researchers believe that suggests the $2.75 to $2.85 level becomes a very real upside price target for skilled traders to pull some profits and protect any open long positions.

Previous Natural Gas Forecast Weekly Chart

This Weekly Natural Gas chart highlights our Fibonacci price modeling system’s results and the Bullish Trigger Level near $2.95 (The GREEN LINE).  Pay very close attention to how quickly Natural Gas moved higher in November 2018.  If another move happens like that in 2019, we could be setting up for a big gap higher followed by about 10 to 15+ days of incredible upside price action.

Currently, the price of Natural Gas has crossed the Daily Fibonacci price modeling system’s Bullish Price Trigger level near $2.29.  This suggests that we are now in a confirmed bullish trend as long as the price stays above the $2.26 level on a closing price basis.  We would expect a continued moderate price rally from these levels to move price away from the momentum base level over time – before any breakout upside price move may begin.

This could become one of the best trades, besides Silver and Gold, headed into the end of 2019.  Get ready for some big volatility in Natural Gas as winter weather takes over much of North America.

November will be the month of breakouts and breakdowns and should spark some trades. I feel the safe havens like bonds and metals will be turning a corner and starting to firm up and head higher but they may not start a big rally for several weeks or months.

October was a boring month for most major asset classes completing their consolidation phase. Natural gas was the big mover in October and subscribers and I took full advantage of the bottom and breakout for a 15-22% gain and its till on fire and trading higher by another 3% this week already.

If you like to catch assets starting new trends and trade 1x, 2x and 3x ETF’s the be sure to join my premium trade alert service called the Wealth Building Newsletter.

Happy Trading
Chris Vermeulen

TheTechnicalTraders.com

Crude Higher Despite EIA Inventories Rise

By Orbex

Inventories Surge

Crude oil prices made moves in both directions this week. However, despite another bearish update from the Energy Information Administration, crude is higher on the week as of writing.

In its latest report covering the week ending November 1st, the EIA reported US crude stores higher by just shy of 8 million barrels. This figure was wildly higher than the projected 1.5 million barrel increase forecast in a Reuters poll ahead of the release.

Refinery Runs Lower

The data showed that refinery crude runs were lower by 237k barrels per day. Refinery utilization rates dropped 1.7% to 86% of total capacity.

This decrease in utilization has been one of the big contributing factors to the large surplus in inventories last week.

Gasoline & Distillate Stocks Falls

Elsewhere, the report was not so bearish. Gasoline stocks were lower for a sixth consecutive week, falling 2.8 million barrels over the week. This decline far exceeded analyst expectations of a 1.8 million barrel drop.

Similarly, distillate stockpiles, which include heating oil and diesel, were also lower by 622k barrels. However, this was slightly less than the projected 949k barrel drop.

The overall level of distillate inventories has now dropped to 119.1 million barrels. This is its lowest level since June 2018.

Exports Tanks, Imports Higher

Looking at import/export data next, net US crude imports were higher last week by 336k barrels per day. Meanwhile, exports dropped by a massive 1 million barrels per day to hit 2.4 million barrels per day.

This significant fall in exports, accompanied by a surge in imports, is also a main contributing factor to the surge in inventory levels last week.

Keystone Pipeline Outage to Cause Supply Disruptions

The level of inventory at the Cushing delivery hub in Oklahoma, the largest of its kind in the US, came in higher by 1.7 million barrels last week.

Inventory levels have now risen at the site for five consecutive weeks.

However, looking ahead, this dynamic could shift. The closure of the Keystone pipeline, as well as an oil spill in North Dakota, are set to take impact as of next week.

The Keystone Pipeline accounts for roughly 590k barrels per day, Therefore, a loss of this supply is would have a major impact.

US-China Trade Talks in Focus

Concern for the supply/demand balance in crude continues to be a major factor in determining the outlook for oil prices. The ongoing US-China trade talks hold the potential to fuel a recovery in crude prices.

However, progress has been slow. While commentary has become more supportive recently, a deal is yet to be signed.

If the US and China do sign a preliminary deal this month and talks progress, this could stoke the fires of demand once again in crude.

OPEC Lowers Global Oil Demand Outlook

Despite optimism over the trade talks, in its latest World Oil Outlook, OPEC has once again lowered its demand forecasts. It cited a weaker global economy and a shift towards natural gas as the reason for this.

Over the next four years, OPEC projects that crude demand will decline by around 7% to an average of 32.7 million barrels per day by 2023.

This latest bearish forecast from OPEC is once again fuelling speculation that the group will announce further measures when it meets next in December.

Technical Perspective

The rally in crude prices this week has seen price moving firmly above the 55-level to challenge 57.78, which is so far holding as resistance.

While above 55, focus remains on a further push higher with an eventual break of 57.78 on watch. Crude has been roughly trapped within the 50.85 – 57.78 range for the last six months and a break above 57.78 will put focus on a test of the bearish trend line from year to date highs along with the next structural resistance around 60.35.

If we break back below 55, however, the bottom of the range at 50.85 will become the next focus point.

By Orbex