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Energy Summary for Dec. 3, 2014

2014-12-03 19:15 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery added 50 cents to $67.38 on the New York Merc, while Brent for January lost 62 cents to $69.92, closing below $70 for the first time since May, 2010 (all figures in this para U.S.). Western Canadian Select traded at a discount of $16.15 to WTI ($51.23), up from a discount of $16.85. Natural gas for January lost 6.9 cents to $3.80. The TSX energy index added 2.87 points to close at 230.75.

Athabasca Oil Corp. (ATH) added 15 cents to $2.58 on 9.17 million shares, after chopping its 2015 spending plans by around 40 per cent. The company said in September that it expected to spend $450-million to $500-million in 2015, leading to a year-end production rate of 15,000 to 20,000 barrels a day. This was not the official budget, but just a forecast. Today, Athabasca released its board-approved 2015 budget of $266-million and a year-end 2015 target of 10,000 to 14,000 barrels a day. It says this new, fully financed budget will protect its balance sheet amid falling oil prices. (The company has not hedged any of its production in 2015.) The reduced budget mainly affects the Alberta Montney and Duvernay light oil division. Athabasca originally thought it would spend around $350-million on these plays in 2015 to boost year-end production to a range of 12,000 to 14,000 barrels a day. Instead, it will spend $167-million to bring year-end production to a range of 7,000 to 8,000 barrels a day. That is the theory, at least. Light oil spending will likely get a boost if the results from this winter's program are decent. Athabasca has plenty of money for an increase, having recently sold its Dover project interest to PetroChina for $1.18-billion, comprising $600-million on closing in August, $300-million due this March, $150-million due this August and $134-million due in 2016. The staggered payments give the company plenty of room to increase spending if it wants. It plans to complete the winter program and then examine its budget for the rest of the year.

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