This document provides an analysis of the oil and gas sector dated October 2, 2016. It was authored by Paul Young, an expert with over 26 years of business and financial experience. The document reviews commodity price indexes, oil and natural gas pricing trends, oil rig counts, US refinery capacity, Canadian oil and gas transmission infrastructure, recent news articles, and government policies impacting the sector. Key data sources reviewed include the Scotiabank commodity price index, BMO oil and natural gas pricing, Baker Hughes oil rig counts, US Energy Information Administration refinery capacity data, and Statistics Canada transmission infrastructure statistics.

1. Oil and Gas Sector
Analysis –October 2,
2016
BY: PAUL YOUNG, CPA, CGA

2. Paul Young, CPA, CGA - Bio
 26+ years business experience
 15+ years in Corporate Financial Planning and Analysis
 11+ years in Financial Performance Management Solutions
 8+ years in Academia (Public Finance, Advance Management Systems,
Advance Accounting
 26+ years (Risk Management and Internal Controls
 15+ years (Activity-based Costing)

3. Agenda
 Commodity Price Index
 Commodity Prices
 Oil Rigs
 US Refinery Capacity
 Canada Oil and Gas Transmission
 In the news
 Government Policies

4. Commodity Index
 Source: Scotiabank

5. Oil and Natural Gas Pricing
 Source - BMO

6. Oil Rigs
 Source: Baker Hughes

7. United States Refinery Capacity
 Source: https://www.eia.gov

8. Canada Oil and Gas Transmission
 Source: Stats Canada

9. Canada Oil and Gas Transmission
 Source: Stats Canada

10. In the news
 LNG Project – BC Natural Gas pipeline approved – Source - http://www.cbc.ca/news/canada/british-
columbia/mayors-ubcm-pipelines-1.3784955 or http://vancouversun.com/news/local-news/feds-flying-to-
vancouver-for-historic-lng-decision-expected-to-ok-megaproject
 Analysts have increased their price targets for Canadian producers with market valuations of up to C$2 billion ($1.5
billion) more than equivalent U.S. peers. Canadian companies are expected to gain 21 percent over the next 12
months, compared with 13 percent for U.S. competitors, according to data compiled by Bloomberg. That valuation
gap has made Canadian companies including Bonterra Energy Corp., Torc Oil & Gas Ltd. and Vermilion Energy Inc.
attractive buys relative to U.S. peers, said Swanzy Quarshie, a money manager at Sentry Investments in Toronto.
Source - http://calgaryherald.com/business/energy/canadas-small-cap-energy-stocks-set-to-outpace-u-s-in-
catch-up
 OPEC The 15th International Energy Forum, held in Algiers earlier this week, saw OPEC members decide to cut
production by about 800,000 barrels per day. The cut will not be consistent across all member states but is
significant nonetheless, being the first in eight years.The move is meant to stabilise global oil prices. -
http://www.aljazeera.com/programmes/countingthecost/2016/10/opec-stagnant-price-oil-161001084546193.html
 Canada Federal Government Carbon Tax –“To increase its price on carbon in line with the Pan Canadian
Framework.” That’s the name of the national carbon-tax scheme the Trudeau government is trying to drag the
provinces into agreeing with — although McKenna has suggested she’ll force any dissenters to comply anyway.
Source - http://business.financialpost.com/fp-comment/kevin-libin-with-the-trudeau-liberals-every-policy-comes-
back-to-carbon-taxes

11. Government Policies
 LNG - http://www.slideshare.net/paulyoungcga/policy-liquefied-natural-
gas-lng-canada
 Carbon Tax/Pricing - http://www.slideshare.net/paulyoungcga/climate-
change-policies-cap-and-trade-emissions-carbon-tax-carbon-pricing-
canada