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Energy Summary for Dec. 6, 2016

2016-12-06 18:52 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery lost four cents to $50.91 on the New York Merc, while Brent for February lost 39 cents to $53.94 (all figures in this para U.S.). Western Canadian Select traded at a discount of $15.45 to WTI ($35.46), unchanged. Natural gas for January added four cents to $3.63. The TSX energy index lost a fraction to close at 222.00.

Alberta oil producer Cardinal Energy Ltd. (CJ) added 18 cents to $10.05 on 560,900 shares, climbing back over the $10 mark, which it had crossed briefly last Thursday in the wake of OPEC's production-cutting agreement and Ottawa's pipeline approvals. It then edged down a bit, but it is still up nicely from its mid-January low of around $5.50. It has kept itself busy over this period by drilling at Bantry and preparing to drill for the first time at Slave Lake/Mitsue. Bantry has been a core area for Cardinal since 2013, as has a separate area called Wainwright. Together they are currently producing 11,300 barrels of oil equivalent a day. In October of last year, Cardinal entered a third core area, Slave Lake/Mitsue, by acquiring assets from Penn West Petroleum Ltd. (PWT: $2.43) for $142.5-million. The assets were producing 3,300 barrels a day at the time, but Cardinal has since managed to boost that figure to 3,600 through recompletions and other work on existing wells. Now it will look to boost the figure even further by drilling new wells. Public data show that Cardinal, which took out licences for two horizontal wells at Mitsue earlier this year, spudded one of them on Dec. 4 -- its first horizontal well in this area. The odds are good that Cardinal will be able to provide results in the new year. In the nearer term, investors are awaiting results from previously drilled wells at Bantry, specifically three that were drilled in the third quarter. Two of them targeted new pools east of the main block. Cardinal may have more to say about them when it releases its 2017 guidance, expected any day now. It has already said it would like to aim for a single- or double-digit increase in production (depending on oil prices) while maintaining its 3.5-cent monthly dividend, which yields 4.2 per cent.

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