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Sector Update: Energy; Suncor, Partners Commit $165 Mln to Fund Construction of Water Technology Development Center, CNOOC Signs Contract with Eni

Energy shares were advancing in afternoon trading. The S&P/TSX Energy index was up 0.4%.

Suncor Energy (SU.TO): +0.5%

Dejour Energy (DEJ.TO): +6.7%

CNOOC (CNU.TO): flat

Transglobe (TGL.TO): +3.8%

Oando Energy (OER.TO): +34.7%

In corporate news, CNOOC said its parent company, China National Offshore Oil, has signed a production sharing contract covering Block 50/34 in South China Sea with Eni China. As agreed, Eni will conduct 3D seismic survey and drill exploration well within a 6.5-year period, while CNOOC will obtain the right to participate in up to 51% working interest in any commercial discoveries in the block.

Meanwhile, Suncor Energy and five industry partners Thursday night announced an estimated C$165 million funding commitment to sanction the construction of a dedicated Water Technology Development Centre (WTDC). The WTDC, to be located at Suncor's Firebag facility, will be used to test water treatment and further develop recycling technologies. A statement said the goal of the WTDC is to "shorten the timeframe needed to develop and commercialize new technologies, as well as significantly enhance existing technologies."

Finally, Dejour Energy Thursday announced a deal to acquire all but a tiny sliver of the remaining ownership interest in the 8,000-acre Woodrush project for about $1.94 million of its stock. Under terms of the deal, DEJ will acquire an additional 24% stake in the three Woodrush oil wells and six natural gas wells in exchange for 9.6 million DEJ shares, boosting its overall ownership position to 99%. Also included in the acquisition was a so-called sour gas processing facility. The transaction is expected to close July 3, pending approval from the Toronto Stock Exchange. The acquired wells produced an average of 70 barrels of oil equivalent per day, with roughly 70% of the production coming in the form of crude oil. The company said Q2 daily production likely grew to around 480 barrels.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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