Alberta light oil producers have been decimated over the last few years, and especially so in the last nine months following the “blow up” in the Canadian light oil differential in Q4/2018 to over $30 a barrel. (Edmonton Light oil discount – Source: Alberta Oil Magazine) This extreme widening in the differential has added to the woes of an industry still reeling from the impact of the 2014 oil collapse and has prompted Alberta’s government to take the rare step of imposing mandatory production caps in order to align the province oil production with limited pipeline export capacity. (Source: National Energy Board) Alberta’s intervention was successful in narrowing the differential(for both heavy and light oil) back to its historical range. However, and against the expectation of many investors, Canadian E&Ps valuations failed to rebound in conjunction with the narrowing differential. (iShares S&P TSX Capped Energy Index – Source: Google […]